One of the biggest VC trends in the past half-decade has been the move towards what people are now calling “platforms.”  While the details vary by firm, the common thread is moving from the classic VC model (a small number of General Partners who make investment decisions, market the firm, and help build companies) to expanding the firm to include non-investment professionals who help with all the non-investing activities.

The platform approach is nothing new; a number of VC firms have had operating partners in the past, focusing on specific disciplines like marketing, recruiting, and operations.  In that sense, they’re imitating private equity firms, who have always had a strong operating orientation.

What is new is the renewed focus on branding VC firms based on their ability to offer services.  The top firm in this regard is Andreesen Horowitz, though other firms have done interesting things as well (First Round Capital’s content strategy, “First Round Review” comes to mind as a particularly well-executed example).

The danger, I feel, is that people are mistaking correlation for causation.  Andreesen Horowitz, Greylock, First Round, et al are investing in platforms; Andreesen Horowitz, Greylock, and First Round are successful.  Therefore, platforms cause success.

In fact, I think that the arrow of causation points in the opposite direction.  Successful firms have the resources to invest in platforms.  I think they believe it will help differentiate them.  I’m supportive, but skeptical.

VC platforms are like celebrity entrepreneurs.  Both are nice to have, and help with branding.  But both are irrelevant if the underlying performance isn’t there.  I’m a nice guy, so I won’t name names, but I’m pretty sure you can easily think of a couple of firms who have spent a lot of money on platforms, but haven’t delivered returns–you never hear them talked about in the same breath as the a16z and Greylocks of the world.  You can also think if plenty of celebrity CEOs whose companies withered and died despite their magazine covers and breathless profiles.

I love that VCs are trying to be more helpful.  But I’m skeptical that any entrepreneur decides to work with a firm because of its platform, if another firm that has a better track record of picking home runs also offers to invest.