Business models

Great development platforms make it cheaper to be a startup

By September 18, 2009 3 Comments
PayPal Inc.

Image via Wikipedia

I just got out of a meeting with Paypal where we were talking about their new platform (which will make it cheaper and easier for startups to build payments systems and take money.  High on the list of new features is split payments which allows developers who sell third party products to make a single charge to a consumer and take their cut before passing the rest of the payment on.

By the end of the meeting I was reflecting on the number of powerful platforms now at our disposal.  In addition to Paypal over the last week I have been talking with startups working on top of Salesforce’s, Facebooks app Platform, Facebook Connect, Reuter’s OpenCalais, and Google’s App Engine, and there are many more platforms beyond that.

None of these platforms are new news on their own, but taken together I think they are game changing, or at least have the potential to be so.  It is early days, but once these services are all working effectively (or their successors are) many if not most web startups will be able to focus the lions share of their efforts on front end development.  That is a luxury compared with the situation as recently as a couple of years ago when building the backend was an equal if not more resource consuming task.

It’s Friday afternoon and maybe I’m feeling good because the weekend is near but I’m hopeful that this will have a major impact on the pace of innovation and the economy overall.  I’m regularly surprised with stories of how quickly some cool apps get built and once this starts to happen at enterprise scale it could unleash a major surge in productivity.

Moreover at the startup level building on top of these platforms leverages the massive investment that has gone into them and allows you to leverage their continued investment going forward, meaning you get new features popping up for zero extra effort.

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