What is platform risk and what can creators do about it?

Platform risk is definitely one of those business terms that are important for creators to know. It means an unsafe situation for not only them, but frankly, anyone starting their business. Read on to learn what platform risk is, what are its common cases in a creator business, and what actual steps you can take to manage it.

• What is platform risk?
• Examples of platform risk
• Everyday cases of platform risk for creators
• (When) Do you need to worry about platform risk?
• How can you manage platform risk?

What is platform risk?

Platform risk is when you (mainly or exclusively) rely on a third-party platform to build your brand and audience, and grow your sales. 

• Your Instagram reach is down because of a recent algorithm update and that’s the only platform you use for your business? That’s platform risk. 
• Twitter or now X, has been acquired; now everything is a mess there with all the policy shifts and loosened content moderation rules to name a few, making you think you should abandon it, but you used that channel to send traffic to your webshop? That’s platform risk.
• You spread your word mostly on Substack which turned out to be profiting from newsletters run by all kinds of extremists, which resulted in people subscribing because, understandably, they didn’t want to support such a platform? Plus, you’re, understandably, not happy about it either and thinking about leaving? But where to? That’s a platform risk.

The risk is there because you don’t own the specific channel and many things can happen to it that result in you losing access to it or you needing to make the decision to say goodbye to it. This also means losing the channel where you promote yourself and your brand, and the platform where you built up your audience and customer base who buy from you.

Platform risk is all about your heavy dependence on one platform that can come with all sorts of costs for you, from marketing to sales consequences that can seriously limit the performance of your brand and business.

In some cases, the bad (or unfortunate) guy is the platform itself, in others, bad guys appear on the platform and make your life miserable. Ouch, either way. Let’s see some examples.

Examples of platform risk

Let’s see the most common examples of platform risk below. 

Common types of platform risk

• Financial risk: the platform changes its prices so that you cannot afford to use it anymore
• Market risk: you design something for a specific platform that doesn’t have a big market limiting your opportunities from day one
• Discontinuation risk: the platform shuts its doors and suddenly you need to move
• Audience concentration risk: you build your audience on one platform only and you lose access to them if something happens to the platform or your account (the latter could be hacked even if you have a lower follower count – yes, you don’t have to be a celebrity to get hacked these days)
• Algorithm risk: the platform’s algorithm changes, resulting in lower reach for your content and limiting your sales opportunities

In this topic, you’ll likely encounter the terms platform existence and platform moderation risk, as well. I’ll cover them below.

Platform existence risk

Platform existence risk is when a platform shuts down, leaving you without that channel you used before (temporarily or permanently), or it can get banned in your country (similarly to what is going on with TikTok in the US), so it’s essentially the discontinuation risk that I’ve mentioned above.

This happens more often with relatively new platforms (Remember Vine or Google+?) and you’ll very likely be safe with the ones that have a longer history, but the rest of the scenario would be the same in any case. 

If something happens to them, you need to move quickly and face the biggest problem of all: you built up an audience on that platform and now there will be no way to move and keep addressing them. Yes, bad news for sales. 

That’s only true, of course, if you really have no other channel where you can redirect them. But what if you’re at the beginning of building your business and don’t want to or can’t operate more than one channel? No worries, there is a solution that I’ll cover later in the article.

Platform moderation risk

Platform moderation risk is very common compared to platform existence risk, and it has two main types.

One type is kind of continuous since most platforms do their best to create a safe and inclusive environment for their users by limiting or banning content from the site that can hurt certain views and beliefs or can have a harmful effect on people. 

Think about religious or political topics and even fake news. This part is very challenging for those who operate the platform as they have to strike a balance between freedom of speech and helping spread content that is deteriorative or even illegal. 

This type of platform moderation wouldn’t usually affect a creator but it’s good to know about because your social media posts can accidentally be taken down by operators due to falsely categorizing your content in the harmful category (Of course, usually you can sort this out.).

Another example of platform moderation is more technical and the one that creators would face on a daily basis: a platform can change the ways how users can access the content it is housing, negatively affecting the reach and sales potential that creators and all business-oriented accounts can build up. 

For instance, most social media platforms used to have a chronological feed versus now when the algorithms look at the engagement and overall popularity of accounts and content, and prioritize those who can already show good results in this area.

This is one of the reasons why creators who would like to start building their brand on a social media platform, are about to face bigger challenges than what they would have in the good old days.

Everyday cases of platform risk for creators

The below concrete cases will make the concept of platform risk easier to understand and may help to realize if you are currently affected.

Common cases of platform risk for creators:

• Selling prints only on Etsy, instead of your on webshop (and having another platform to support it)
• Posting only on Instagram to showcase your work, without a webshop
• Uploading videos only on TikTok to build an audience, instead of having a website and a newsletter, or at least, another video-oriented platform in your arsenal
• Having a Shopify store and no social media channels to send traffic there
• Having a Wix website with a webshop and no newsletter to update people on new items they can buy
• Relying only on Google to send traffic to your website without utilising social media 

I think you get the formula. These examples can go back and forth, but the point is: using only one channel, whatever that may be, exposes you to platform risk, leaving you one day with the question no creator wants to ask themselves: What do I do now? 

Plus, utilsing only one platform instead of at least two, also decreases your sales potential (reaching less people, resulting in less purchase) by missing out on the goodness of cross-platform promotion where you leverage several channels to maximize your visibility.

(When) Do you need to worry about platform risk?

At the very beginning of your journey as a business owner, it’s more than okay to focus on one platform, in fact, consider it your advantage that you only need to put your resources to use on that one platform. Plus, fewer competitors. 

I know that this entire article suggests you doing the opposite of that but let’s be realistic, too: when it really is your first stage of building your business, you are not in a position to be present on more than one channel (simply duplicating or re-sharing your Instagram posts on Facebook doesn’t count here). 

My advice is this: start thinking about early on when you can choose and start operating another platform where the audience you build up is not owned by a third-party provider. A good example is having a newsletter. Even if you lose your Instagram account, even if your Etsy store becomes unavailable and even if your third-party-operated website shuts down, you’ll have their email addresses to reach out to them.

I know that newsletter providers can shut down too. Hell, even Gmail can be doomed for a day. But that would only mean that you would send out a word later, but will still have the contact information of people who are interested in your work. 

If somebody hacks and steals your Instagram account and that is your only platform, you won’t just lose a channel, you’ll use all your followers without any other means to talk to them.

How can you manage platform risk?

Lastly, here are some actionable tips on how you should approach and manage platform risk:

1. Have a website with a domain you own. If your website provider shuts down its services, you can still redirect your domain to a new platform. Look at Namecheap, GoDaddy or Porkbun for that. Then link your website to the domain. Choose a website builder that’ll help you put together your online presence pretty quickly, and it’s best to look for webshop functionalities, as well. Check out Carrd, Wix, or WordPress.
2. Evaluate and re-evaluate the platforms you use. Any day can be doomsday on any platform so pay attention to the announcements and events of any third-party provider you may use for your business. They can run into temporary technical difficulties they can fix in a day or two, or lethal news can come from the stock exchange, altering the company’s entire future. I’m not saying you have to read everything on every provider but keep an eye open.
3. Have a plan B platform. Besides keeping in mind to slowly build out your channel portfolio, think about the alternatives you can use for any platform that is currently in your arsenal. Try to avoid emergency situations.
4. Keep your calm. Being ready doesn’t mean you have to be anxious about platform risk all the time. Information is power so collect it and use it to your advantage. Fear or risk is only in our lives to teach us but if you ask me, I suggest you do your homework in time instead of learning your lesson too late.

This is all you need to know about platform risk as a creator and business owner of any kind, to be honest. I hope you have all the information you need to act smartly about your brand moving forward, but if you have any questions left on the topic, feel free to comment or reach out to us.