AI is the consensus pick as the next major platform in tech. For good reason.
That said, sometimes under-hyped platforms can be the best place for startups. Why? It’s much easier to stand out on a platform that doesn’t have too much buzz. With the benefit of hindsight, for example, it’s easy to see that the Salesforce platform was under-hyped in its early days. It was a great place to build.
Take Veeva, one of the early startups on the Salesforce platform. When the company started out in 2006, it was named “Verticals onDemand” - because it was assumed they’d need to be in many verticals to find venture-scale TAM. In other words, even a startup that was bullish enough to bet their whole company on Salesforce dramatically underestimated how big the platform would become.
Veeva’s bet on Salesforce paid off spectacularly. Its high visibility in the Salesforce ecosystem drove super efficient customer acquisition. Building their application on Salesforce’s platform also allowed them to keep R&D & infra costs low. This translated into extreme operating leverage - in the year before it IPO’ed, it grew over 100% to $129m in revenue with an EBITDA margin of over 20%!1
Veeva only needed to raise only 7m in VC on the path to going public. Since their 2013 IPO, they’ve consistently been one of the most profitable public SaaS companies and now enjoy a $25b market cap.
Are there any significantly under-hyped platforms today? I wouldn’t count VR, AR, or crypto - they have received way too much buzz to qualify as under-hyped.
Here are a few possibilities:
Snowflake
With a $40b market cap, It’s no secret that Snowflake is one of the great enterprise software businesses of this generation. Snowflake Marketplace is no secret, either. It can help boost distribution for startups that want to sell into Snowflake’s large customer base.
What seems like an underrated opportunity is Snowflake as an application development platform, where “instead of bringing data to the applications, we bring the applications to the data.” This Tweet has great excerpts from a recent interview with Snowflake’s CFO, Mike Scarpelli:
Thus far, I have only seen one startup that’s pursuing the “bring the applications to the data” model on the Snowflake platform. But I think it’s only a matter of time before it becomes much more common across categories like marketing automation, product analytics, and ML. Building on Snowflake now could bring major benefits in customer acquisition efficiency and in R&D leverage - perhaps paralleling the benefits Veeva enjoyed by being early on Salesforce.
Satellites
The success of SpaceX & others in rocket launch has dramatically reduced the costs of launching satellites into space. What can be done with satellites? Plenty. Exhibit A: Starlink, whose huge success as an ISP has enabled SpaceX to be one of the few pre-IPO startups able to raise an up-round.
The platform potential of satellites resides in offering services that rely on cheap global communications and/or global aerial imagery. There are already plenty of startups working in these areas, although perhaps there should be more.
Startups using satellites are poised to bring new levels of automation and intelligence into many late adopter industries such as mining, agriculture, energy, and defense. In particular, I think there’s significant opportunity in helping companies & organizations which operate in remote areas that now can be “lit up” by satellite connectivity. For example, Fleet Space uses its satellite network and remote sensing tech to offer superpowers for mineral exploration companies.
Replit
I recently asked a friend who’s an experienced developer about Replit. He said he knew of a Replit that’s an “edu tool” but figured I must be asking about some other thing named Replit. No - it turns out that what started as an edu tool has enjoyed massive growth and evolution.
For example, Replit Bounties leverages Replit’s 10m+ user base as well as its hosting service & coding platform to create a marketplace for outsourced software development. It’s potentially disruptive to Upwork and other platforms as its integrated model offers major benefits in quality and efficiency. I’ve seen a few startups leveraging Replit Bounties for their own software development needs and I expect to see many more given the program’s strong early results.
What are other candidates for under-hyped platforms?
Please let me know if you have any suggestions!
That’s a Rule of 40 score of over 120 for a company that had major scale. Magnificent!