"Build it and they will come."
Platforms such as Shopify, Salesforce, and Slack eventually grow to the point where integrations become one of the most important ways to grow.
As a result, these platforms launch app exchanges where developers can submit "plugins" that integrate with them.
Think of those "plugins" like "mini-SaaS" software, where you mix the platform's API and your own code to create something useful for the users of those platforms.
Hell yeah. I wrote a whole article where I list several examples out of the 494+ IndieHackers interviews. These are founders that had success getting traffic being listed on platforms like Shopify, the AWS Directory, Slack, Github, the Chrome Web Store and so on.
Some founders launched as a stand-alone SaaS, failed, re-launched as an app plugin and succeeded. One of them is Nelson Joyce, the founder of Tettra ($25,000/MRR), an internal knowledge base tool:
Of course another massive source of trials was the Slack App Directory. After our experience, I highly recommend launching on a platform like Slack, WordPress, or Shopify. There's a whole chunk of functionality that you can essentially "outsource" to the platform. For us, that was authentication, user management, and access to the "work graph". You also get free distribution from the parent platform and a clear target persona you can attract.
Nelson's co-founder, Andy, even wrote an article on how Slack saved their startup and why he thinks launching on a platform has more pros than cons.
The top reason for making an app exchange plugin, according to Andy, are habits:
The way people access a tool is just as important as what the tool does. People are overloaded with information, logins, and interfaces. And here we were, asking them to create a whole new habit.
After Nelson and Andy had this realization, they launched on the Slack App Directory. A year later, it's been "one of the best strategic decisions we've made as a new startup", according to them.
Take Salesforce, for example. They have 23% year-over-year growth and make $6.34 billion in revenue.
As part of their growth strategy, Salesforce invests a lot in integrations:
Salesforce’s Platform and Other unit, which includes the MuleSoft integration software and Tableau data-analytics software, delivered $1.88 billion in revenue, which was up 24%.
When a platform reaches the size of Salesforce or Shopify, integrations becomes one of their main acquisition channels.
This has been the case with Shopify, where "engineering hiring is probably the biggest limiter to Shopify's growth", according to Harley Finkelstein, Shopify's president.
This is one of the primary reasons why Shopify is relying on their third-party app exchange ecosystem and have recently lowered their App Store commissions to 0% for developers who made less than a million in revenue.
The typical merchant on Shopify uses 6 apps. Most platforms don't have official stats, but you could use your friends' circle to get a rough estimation: How many of your friends using Chrome also use extensions, for example?
It's completely understandable to be afraid of third-party platform risk. Especially with platforms like Twiter and Facebook constantly changing and removing features from their APIs and making it harder for developers to make third-party apps.
However, there is one pattern I've noticed... The majority of platforms that screw their developers are B2C. B2B platforms (such as Salesforce, Shopify, and Slack) are far more stable, and I've yet to see a B2B platform abandon their developers in a major way.
The reason for this: I discussed this with Justin Jackson on Clubhouse, and he provided a compelling reason: B2B platforms, unlike B2C platforms, have a plethora of use cases.
For example, the Shopify App store has over 40 categories.
In comparison, Facebook (which does not have an official third-party app exchange) has only 15 "features" as social plugins.
So when developing on a third-party platform, I'd prefer B2B over B2C.
They first start by opening their API and then progress to app exchanges.
Another example is Bubble. The nocode movement is getting major traction in 2021 and platforms like Bubble already have marketplaces for third-party devs.
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What are the pros and cons of building a "mini-SaaS" on an app exchange? Let me know in the comments below.