What's a full-stack startup and why is it so popular?

6min read -

Full-stack companies are now in a league of their own: they address a certain type of market and they are structured differently. The first definition of the term “Full-stack” is based on the work done by Chris Dixon, tech entrepreneur and American investor: a Full-stack startup is a company which develops a technology that can provide the end customer with a complete product or service which handles the entire value chain of its activity. Apple, Uber, Netflix and Tesla are cited amongst the full-stack company references. 

Being a Full-stack startup appears to be idyllic for all companies: controlling the entire value chain, not being dependent on any technology or third party services, innovating with unlimited velocity and creating a product with absolute luxury.

What is the definition of a Full-stack Platform?

Often associated with the developer profession, the term “Full-stack” has different meanings according to the companies using it. But the main characteristic of these companies relies on their ability to provide and control the service and experience they are selling. Systematically, the “Full-stack” approach implies extending the fundamental skills of the company beyond the traditional marketing, commercial and technological skills

Beyond mastering the production chain, the combination of technology with business innovation is characteristic to full-stack. In some cases, the experience implies moving from the digital world to the world of atoms: Tesla manufactures its own cars, Netflix produces television programs, etc. In other cases, there is no need to manipulate tangible assets but you still have to combine perspective technology with functional, service-based and operational expertise.

1. Being Full-stack means you can thwart operational complexity

Full-stack startups are not just technology companies. To successfully implement a Full-stack approach, these companies usually have to ignore the sacrosanct idea that a startup should focus on one offer and perfectly execute it.
They generally choose to transform operational complexity in a feature and offer premium service. Uber revolutionised urban transportation by putting this strategy in place; the same goes with how Airbnb revolutionised holiday rentals and now, the travel experience.

Frichti is the perfect example of the Full-stack concept

French startup Frichti,which grabbed $13.4 million in 2016, perfectly illustratesthe concept of a Full-stack platform. Its economic model relies on the integrating the entire value chain within the platform, from cooking to the delivery process. “We are a restaurant, we do eCommerce and are offering logistics at the same time. We integrate the entire value chain, which enables us to better control our costs and prices,” said Julia Bijaoui, co-founder of Frichti on French television. It’s also astate of mind: we can see Frichti as a food delivery company but its co-founders primarily see it as a tech company. It’s the perfect example of how technology can solve an operational problem.

Why does the iAdvize platform describe itself as a Full-stack platform?

When it comes to the B2B sector, iAdvize also follows this logic. It’s now possible to manage human resources in customer service teams thanks to ibbü, an on-demand pool of experts, a service offered by the iAdvize platform. We provide companies with a conversational commerce platform and enable them to master all touch points in real-time as part of an omnichannel approach. We train their agents to handle customer queries from these communication channels.

2. The characteristics of a Full-stack platform: creating perceptive technology

Full-stack startups seek to eliminate as many commercial and logistical intermediaries as possibleto save time, money, master their market and engage with the end customer. Reducing intermediaries is possible due to the web and its new applications.

Whatever the industry, seeing a company with a tech state of mind enables you toturn the sector’s very own structure upside down. Uber’s example is a very concrete one: an application for a very simple service at the heart of an industry with confusing logistics.

By using an API, the technology ensures a bridge between worlds. Any physical business (based on a tangible product, a human service, etc.) can be designed like a digital company with strong potential.

3. Offering an integrated user experience

Chris Dixon cites Apple as a classic example of the Full-stack approach. The American giant designs its product software and distributes it in its own stores. Most importantly, Apple offers a unique user experience with premium customer service and a unique shopping experience in its Apple Stores.

Uber, not only controls the entire value chain but the company also became a third party app for its partners. The latter can integrate Uber’s ride-booking service directly in their app. Hilton Hotels & Resorts does that and sends reminders directly in the Uber app to help their customers book a car in just a click. Thanks to branding and personalisation, customers can remain in the Hilton app while having access to some of the services offered by Uber. This enables the group to create less friction in the user experience and a growing dependence on their service.

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