The platform trap

Ever since Microsoft, becoming a platform has been Silicon Valley's ultimate ambition.

Build it and they will come: Microsoft built the platform (Windows), which attracted developers. Developers built products that attracted users. Users created a market that attracted more developers.

It’s a great business to be in — a perpetual motion machine of self-reinforcing value creation.

It’s great for the world, too. Platforms are an enabling technology that empowers anyone with a good idea to reach millions of users. The ideal platform succeeds only when it helps others succeed. 

“That is what happened with the PC,” Ben Thompson writes, “and the creation of applications like VisiCalc and Photoshop.”

Unfortunately, it hasn’t happened much since.

“It seems clear in retrospect that DOS/Windows was the exception, not the rule,” Thompson adds.

Other platforms have been built, of course, but the order of operations has changed: Instead of platform → developers → product → users, it’s been product → users → developers → platform.

“The only way to be a platform company is to be a product company first,” Thompson explains, “and acquire the users that incentivize developers.”

This is the Apple model. Hit products like the iPhone attracted the users, and the users attracted the developers, who attracted more users.

It proved to be an even better business model than Microsoft’s. Apple could demand as much as a 30% cut of third-party sales in the App Store because users came for Apple's products first and the third-party ones second.

That incredible take rate demonstrated that platforms can be even more valuable than previously thought. “Two-sided network effects are so powerful that, once established, you can skim off as much money as you want with no ill effects,” Thompson explains.

It also suggests that, to get there, you have to start with the product. 

This may be where crypto has gone wrong: It started with the platforms and assumed the products would follow.

Very few did.

The cost of horses going before carts

However bad you think crypto investing has been, it’s been much, much worse. 

Blockworks Research analyst Carlos Gonzalez Campo ran the numbers on the 1,972 tokens that achieved a circulating market capitalization of at least $50 million at some point between January 2020 and December 2025.

Measured from the month each of these first closed above that threshold, he found that the median token subsequently fell 97%.

Ouch.

Imagine if the penalty for picking a stock that turns out to be merely average was losing 97% of your money. Approximately no one would try.

Campo titled his report “One in Twenty Four” to highlight just how hard it’s been to pick winners in crypto. Only 4.1% of the tokens he studied outperformed bitcoin through June 2026. Among tokens with at least two years of trading history, just 1.7% did. 

Even when times were good, they were bad.

The best run for active crypto investors was between February 2020 and November 2021, when one in three tokens outperformed bitcoin. Of those, 86% later fell at least 90%.

Only one — OKB — continued to outperform BTC.

Campo notes that exchange tokens like OKB were vastly over-represented in the small group of outperformers, which he attributes to the “equity-like claim” they have on revenue.

Conversely, the dire performance of most other tokens can be attributed to their lack of revenue.

Crypto has sometimes defied the laws of traditional finance, with memecoins valued in the billions of dollars, sometimes for years. Campo's data suggests it was a mirage. Value is ultimately a function of future cash flows — which crypto has never really prioritized.

To the extent the typical token investor thought about revenue at all, the assumption was that it would come later. Crypto followed the Microsoft model: Build the platforms first — Ethereum, Solana, DeFi primitives — and trust that the products (and revenue) would follow.

Would things have been different if crypto followed the Apple model instead?

It’s impossible to say.

But for token investors, at least, it cannot have turned out much worse.

— Byron Gilliam