Pitfalls of Building on Someone Else’s Platform – Part 2

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Developers beating a retreat from Twitter’s platform

In our first article, we focused on Facebook and Twitter as examples of companies that have wreaked havoc on entrepreneurial companies dependent on those platforms. We spoke of Facebook tweaks that resulted in companies like Virtue, Context Optional and Buddy Media practically forced to abandon their business models. We talked about Twitter’s announced API restrictions and the buzz of discontent raised by developers and fears expressed by companies dependent upon the Twitter platform.

The Growing Developer Backlash.

Twitter has signaled rather clearly that it intends to claim the lion’s share of the value in the ecosystem, but you have to wonder how much goodwill it is going to lose by virtue of the recent terms and restrictions under which developers operate.

Dalton Caldwell, founder and CEO of Mixed Media Labs, may be in the process of creating a new home for developers interested in defecting from platforms such as Twitter. Caldwell’s App.net is a Twitter-like social networking site funded by subscriptions rather than advertising. Absent the need to monetize in combination with a stated commitment to an open API, App.net may have the right ideas about how to attract pivotal early adopting developers and foster a vibrant community.

In a stunning crowdfunding effort, App.net raised $803,000, exceeding its target of $500,000. I think this demonstrates a serious level of backlash coming from the development community. Marcus Wohlsen’s July 23 article, in Wired.com titled, “Twitter API Crackdown Fears May Be Overblown,” may have been premature if the hugely successful fundraising efforts of App.net are any measure.

Many angel investors are equally concerned about the risks of building on someone else’s platform. Angel investor and co-founder of Founder Collective, Chris Dixon, tweeted:

“Twitter is like a drunk guy with an uzi killing partners left and right. Expect investment in ecosystem to drop significantly.”

I previously shared Fred Wilson’s Be your own b!tch. quote. You might be surprised to learn what Fred said in a post on his blog; “The Twitter Platform’s Infection Point,” dated April 7, 2010, just two and one-half years ago:

So it is clear that you can build large businesses on top of a social platform like Facebook and Twitter. And because Twitter is so open and so lightweight, I am surprised that there aren’t more ‘new kinds of killer apps’

I am not trying to play “gotcha” here. I share this only to illustrate how rapidly the assault on developers and platform dependent enterprises has evolved. When an astute investor like Fred Wilson is blind-sided by a company like Twitter, how vulnerable are the rest of us.

James F. Moore, who introduced the application of biological concepts to the business world, wrote that a business ecosystem is:

an economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world. This economic community produces goods and services of value to customers, who are themselves members of the ecosystem

Should we then be surprised to see companies like Facebook, Twitter, Apple and others behaving in a manner that is akin to self-preservation. After all, isn’t self-preservation a characteristic we see consistently in nature’s evolutionary process? We co-opt the term “ecosystem” and use it to describe the inter-relationships of Twitter with companies like Tweetbot, Echofon and Osfoora. How can we be appalled when we witness a mother eating her young? Perhaps Google’s Hunter Walk said it best in a recent blog post: “The Eight Billion Elephant in the Room: How to Understand the Future of Twitter.”

Companies are voracious self-preservation organisms. They eat and grow, eat and grow.”

Obviously, the behavior of Facebook and Twitter has not escaped the attention of angel investors and venture capitalists. A startup with a business model dependent on the platform of another company now faces yet another obstacle to funding.

Certainly, entrepreneurs and developers have also learned from these events. There could be significant repercussions to Twitter and others of that ilk.

Mathew Ingram’s article, Twitter killed my business.” An inside look at the ecosystem crackdown,” is largely based on a discussion with a developer that creates custom Twitter applications for corporate clients.

Ingram’s article quotes the developer speaking of his relationship with Twitter:

They have a big kill switch–anyone at Twitter can kill me in a second, they can turn off any of my applications any time they want. They can kill all my apps and shut off all my paying clients, and they’ve done that. We’re all terrified of them–we won’t say a word.”

The article makes it clear that developers are “pissed” and looking for alternatives. They are retreating from the Twitter and Facebook platforms. Will they fall back, regroup and launch a counter-attack?

Next up, we will be taking an in-depth look at the potential impact these developments may have on Facebook, Twitter and other platforms in general. We will discuss the future prospects of developers and the symbiotic relationships they have previously enjoyed with the Facebook and Twitters of the world.

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