The Dilemma of Platform Expansion

In this week's writing discussion, we delve into the tendency of platforms to expand their functionalities beyond their core strengths, often resulting in a subpar user experience.

Photo by Rick Mason on Unsplash

One notable example is Elon Musk's ambition to transform Twitter into an "Everything App." This concept, prevalent in various global markets, combines social media with e-commerce, financial transactions, and more. Essentially, it's a strategy to centralize user activities, enabling companies to gather extensive data and create targeted advertising.

While such all-encompassing apps may thrive in countries like China, where government oversight is pervasive, their appeal in the United States seems questionable. The feasibility of developing such an application raises further concerns, especially given the current state of Twitter, which appears to be held together by mere hope.

Twitter originally began as a side project aimed at keeping friends and colleagues updated on lunch plans. Over nearly two decades, it evolved from a simple messaging platform into a multifaceted service. Just prior to Musk’s acquisition, Twitter had already expanded its offerings significantly, incorporating groups, newsletters, and subscriptions. Yet, Musk's vision seems to push for even greater complexity.

This trend isn't isolated to Twitter. Facebook/Meta's acquisition of Instagram and WhatsApp reflects a similar strategy to enhance its platform's appeal and maximize ad revenue. Substack, too, is adapting by introducing features like Chat and Notes to its newsletter service.

As I mentioned last week, the costs associated with mass emailing can be substantial, and executing it effectively is challenging. Substack's initial business model thrived by offering this service at minimal cost, allowing writers to reach their audience directly without exorbitant fees.

However, this original model is proving unprofitable, prompting Substack to introduce an unsolicited social media feed. Adding to the confusion, the platform lacks clear plans for content moderation in this new space.

It's perplexing why Substack doesn't choose to remain focused on newsletters. While profitability concerns are valid, there are alternatives to creating a lackluster Twitter-like platform focused on self-promotion.

The saying "you can't be everything to everyone" resonates strongly in this context. Tech companies often seem unsatisfied with excelling in a singular focus. Whether driven by venture capital pressure or a cultural inclination in Silicon Valley, platforms persist in adding features that disrupt their foundational business models, leading to diluted offerings and often neglecting the elements that originally fueled their success.

I remain hopeful that Substack will find its direction and thrive, although my optimism has waned recently. My decision not to invest in the company has been met with frequent requests for my modest financial support.

The initial investment deadline for Substack was April 20, which was then extended to April 28, and subsequently to May 8, suggesting instability.

The refusal of platforms to embrace their core competencies underscores the notion that their golden age may be over. Why emulate Twitter when there are unique opportunities to innovate? Why attempt to be all-encompassing when focusing on a few key strengths could lead to irresistible offerings? Twitter's failure to adapt has caused it to lose users, and now Substack appears to be following a similar path.

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Chapter 2: The Convergence of Platforms

For more context on platform proliferation and its implications, check out the following video.

In this Fireside Chat, industry experts discuss the growing trend of iGaming platforms and the considerations that come with managing multiple functionalities.

Chapter 3: The Pursuit of Perfection

Another insightful resource on this topic can be found in the next video.

In this talk by Jamil Jadallah at PlatformCon 2024, he explores the pitfalls of focusing solely on platform development and the importance of maintaining a clear vision.