Snap Inc., the company that brought us the social media app Snapchat, is going public shortly. In the materials for its initial public offering (IPO), Snap described itself as a "camera company." The description caused no small amount of commentary, largely because Snapchat is a social media smartphone app, not a camera.
Snapchat uses cameras, of course - one of the key selling points of Snapchat is the ability to send photos and videos, embellished with drawings and animation. But the use of a camera is different than the production of one. The latter is what "camera company" implies.
Or, does Snap plan to use its leadership skills to become a platform for camera-disseminated applications?
A recent Harvard Business Review article takes this description as a starting point to discuss the differences between platforms and products in an era of digital transformation.
Platforms Can Be Far More Lucrative than Products
Digital transformation allows platforms that make dissemination far easier. And platforms, for many digital businesses, are where both the action - and the money - are.
As the HBR article observes, a company that develops an app can win a place in the Apple app store or Google's Play store. But both these app stores are platforms that can, theoretically, charge every one of the apps on the platform. It can also, theoretically, charge the consumers who use it.
As a result, the platforms can be far more lucrative than developing a product or an app.
Some companies are born as platforms. Uber, for example, is a digital platform connecting people wanting rides with people having them.
Some companies remake themselves as platforms. Google, for example, began life as a product company. Its product was the Google search engine. With the development of Google Maps, Google Docs, Google Voice, and the addition of YouTube, it became a platform.
So is Snap Inc. signaling than it plans to do a Google, branching out from Snapchat to create a camera-based platform? Or is it signaling that it plans to develop camera-related products as virtual reality and augmented reality move more steadily from the realm of technology news to technology products?
Platforms Need a Core Value to Succeed
At this juncture, the reason for the "camera company" description isn't clear. But the HBR article cautions that, if Snap Inc. intends to become a platform, it needs to make sure that its core values remain clear.
Right now, Snapchat has two core values. The first, as mentioned above, is the ability to create images, with embellishment or without, as part of or the message.
The second is that the messages vanish after a few seconds. This both ensures privacy and security and allows for an experimental, real-time feel to the messages.
If companies don't retain their core values, they run the risk or losing customers. An example is MySpace. MySpace started corporate life as a social media app. Like Facebook, its core value was connecting people with friends.
However, it soon moved to focus on music. That concentration interfered with the focus on friends. Developing and new bands flooded the space. It lost its core focus and eventually went out of business.
Snap Inc.'s designation as a camera company provides a useful moment in which to reflect on the differences between products and platforms. In the digital world, platforms are much more valuable.