Instant access to an already established user base might seem like a quick route to market, and one that can put your product in front of people quicker than you ever could – but its often dangerously short sighted.
As soon as you make a decision to just build on top of someone else’s platform rather than building out your own, instead of growing more organically from the ground up – you are setting sail in a ship who’s direction you no longer have any control over, and who’s helm is captained by someone else. Whilst that particular boat might have a preloaded deck full of paying customers, once it hits an iceberg, chances are you are going down with it too.
Titanic analogies aside, the interesting thing for me with Facebook’s IPO wasn’t just the volatility of its stock price; but the mirroring of market trends with companies like Zynga. You’ll notice striking similarities between the peaks and troughs in the graph below.
Facebook sneezes, and Zynga catches the cold.
That’s not to say the company doesn’t have healthy projections, and is hedging its bets sensibly on mobile, which will eventually allow them to build up their own distribution platform rather than simply suckling on Facebook’s teat. Still, they are a multi-million pound company with the resources to do that – chances are you, however, are not.
The problems associated with platform dependency are as old as the hills, and the history is there for all to see. Twitter are a great example of bait and switch backpedaling that has screwed third parties and their business model into the ground. Following their rate limiting in 2009, they too have gradually pushed the development community overboard, actively discouraging them from developing other competing Twitter clients, and changing the way links are handled internally on the platform. The way images are handled now as well highlights the fragility of image hosting services which placed reliance on Twitter as a source for advertising revenue.
Another recent casualty in the platform wars was BeamitDown Software, as over reliance on Apple’s platform was the kiss of death for their product iFlowReader, as they discovered they could no longer make profit due to changes in app store policies.
Still, we have companies such as Airtime betting the farm on the Facebook platform.
Simply filling the gaps in other people’s services is something of a risky strategy, and with the speed some of these services grow out their own products- likely an unsustainable business model.
Whilst ignoring the massive companies on the web such as Google, Facebook and Apple is never a clever strategic move, remember that there’s no telling who or what is going to be shaping the web in years to come – or indeed who is going to be at the helm. As Twitter investor Fred Wilson aptly puts it: “Don’t be a Google Bitch, don’t be a Facebook Bitch, and Don’t be a Twitter Bitch. Be your own Bitch.”
Building your own application and platform organically out using these giants as leverage to grow faster, rather than the entire foundation of your product is a much safer and more sustainable option for future growth.
Filed in: Facebook