Small Business Labs

Facebook as a Platform Company

Facebook announced the release of new developer platform.  This has gotten quite a bit of press.  Internetnews.com has a decent summary, and ZD Net has a nice blog post summarizing some of the other coverage. 

Becoming a platform company is very popular these days in the tech industry.  There are also a wide number of platform companies outside of tech, with most industries now having platform companies that provide products and services to 3rd parties.  For small businesses, platform companies provide access to world class infrastructures at reasonable costs.  They also provide small businesses the opportunity to turn fixed costs into variable costs, and greatly reduce the amount the captial required to start and operate a small business.

We've been looking at platform companies and their impact on small and personal businesses for some time now.  This research will be featured in an upcoming installment of the Intuit/IFTF Small Business Forecast series.

WSJ on PlentyOfFish - 1 Employee, Millions in Revenue

The Wall Street Journal (subscription required, but this article is in the free section) has an article on the free web dating site PlentyOfFish.  Online dating sites are very popular, with  the leading sites doing heavy web and TV advertising and charging subscription fees.  PlentyOfFish is a free site, supported by ads.  The article says that PlentyOfFish has one full time employee/owner, one part-time employee, and generates between $5-10 million in revenue per year. 

According to the article, PlentyOfFish is able to do this because web software has become simple enough for a single person to manage, and there is a robust 3rd party ecosystem of larger companies providing a broad array of services to support small web and ecommerce sites.  The article points specifically to Google, which evidently is PlentyOfFish's primary source of revenue.

Two major trends, both of which are discussed in the article, are providing the opportunity for small and personal web sites to create multi-million dollar businesses.  The first is the growing ease and simplicity of the tools required to build and support relatively complex web and ecommerce sites.  The second is the growth of 3rd party platform companies that help and assist small businesses.  PlentyOfFish is a great example of these two trends coming together and creating interesting - and profitable - small business opportunities.