Chris Copeland is Chief Technology Officer for Bestow, a technology company transforming the centuries-old life insurance industry.
Regardless of your industry, the design of your software platform is a critical decision for your business. Every choice you make regarding customization and scalability can profoundly impact your growth trajectory. Since no one-size-fits-all solution exists in complex domains, platform design is a critical (and often challenging) endeavor.
Before making any decisions on platform design, you must consider the complexity of the problem space, the diverse needs of your customers and the ultimate goal: how many customers the platform will ultimately support.
The Platform Design Spectrum
At the heart of the platform design conundrum lies a spectrum that stretches from rigid, off-the-shelf software to fully customized solutions. Understanding where your project fits on this spectrum is essential, as this positioning dictates many technical choices.
On the left side of the spectrum, we find high-volume software products akin to the apps we download to our smartphones. These solutions offer minimal customization, catering to a broad audience at moderate prices. They excel in terms of volume but lack the finesse of tailored experiences.
Conversely, the right side of the spectrum is occupied by highly customized solutions. These are often developed by in-house engineering teams or by consulting firms. While these solutions command premium prices, they cater only to a single customer’s needs. This approach offers unparalleled customization but can be cost-prohibitive and challenging to scale.
Tradeoffs In Platform Design
Choosing where to position your platform on this spectrum involves making critical tradeoffs. You can achieve high sales volume on the left side, but margins may remain modest. You can command top-dollar prices on the right side, but your customer base remains limited, and your costs grow linearly. These tradeoffs are not solely related to the initial build phase; they extend into your software’s ongoing maintenance and evolution.
Plain software, found on the left side of the spectrum, is easier to maintain and improve over time. The standardized nature of these solutions simplifies updates and enhancements. In contrast, custom software on the right side becomes increasingly complex as different versions diverge. Each unique customer requirement compounds the intricacy of maintaining and upgrading the software.
At Bestow, we’ve carefully considered our position on the platform design spectrum. Our strategy leans toward the middle, aiming to balance customization and scalability. We recognize that customization is essential to meet the diverse needs of our customers. However, our customers also value the speed at which we deliver new solutions and then iterate and improve them once in the market. This agility directly results from solid core platform features that are leveraged across customers.
This strategic positioning allows us to cater to a broader audience while accommodating individual preferences significantly. It’s a delicate dance, but an approach like this can help you provide valuable solutions to many clients.
Long-Term Considerations
Beyond the initial build, it’s crucial to think about the long-term sustainability of your platform. With its standardized structure, plain software is inherently more straightforward to maintain and upgrade. The uniformity of the codebase makes it easier to push updates and introduce new features seamlessly.
In contrast, while tailored to specific needs, custom software often explodes in complexity as customizations multiply. Each unique version requires individualized attention, leading to a significant resource drain over time. It’s imperative to factor in the long-term maintenance costs when deciding how much customization to incorporate into your platform.
Meeting Surging Demand
Assume you’ve found your sweet spot on the platform design spectrum—a balance that caters to your target audience and business goals. But what if you have significant demand at a lower price point? Would those new prospective customers buy your product without customization? This is an opportunity to segment your product and customer base.
Consider launching a version of your product further left on the spectrum to meet this need.
Typical segments include those serving the small and medium-sized business (SMB) market or offering a self-service level. These adjustments allow you to capitalize on additional opportunities without compromising your core strategy. It’s all about building for the mass market while staying true to your initial vision.
Finding What Works For You
Success hinges on identifying your unique position on the customization-scalability spectrum and aligning it with your business goals. It’s a journey filled with tradeoffs, but with careful planning and a willingness to adapt, you can find the sweet spot that leads to growth and prosperity.
Platform design is both an art and a science, requiring a deep understanding of your market and placing a strategic bet on where you can be most successful. The landscape is dynamic and you must maintain your product-market fit and strategy while staying agile and responsive to customer needs.
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