Some startups die because their business model is platform-dependent. Like this:
Used to be, Twitter let you post anything, even advertisements, even if you didn’t identify those tweets as ads. Companies like TweetUp and Ad.ly popped up as liaisons between advertisers and popular Twitter-ers. Specifically, an advertiser might be willing to pay $3 to have someone with 10,000 followers tweet about how great their widget is, as in this Ad.ly example:
It’s like AdSense for Twitter, if you like those kinds of analogies.
But in May, Twitter announced their own advertising platform and, in the same breath, disallowed “any third party to inject paid tweets into a timeline on any service that leverages the Twitter API” [TechCrunch]. Twitter’s Terms of Service now explicitly prohibits it.
So what happened to TweetUp and Ad.ly?
If you visit TweetUp’s website you’ll find their name is now PostUp, and it’s no longer AdSense for Twitter. Now what they do is… ummm… a pile of content-free marketing buzzwords. Their slogan is “World’s Best Tweeters… and more,” which the long-time readers already know I think is dumb, and their “About Us” copy is similarly useless:
“We’ve embarked on an exciting quest to let even more people realize the tremendous potential of social networks as a real-time information platforms.”
Oh happy day! Just want I’ve been waiting for! Wait, what is it exactly?
Oh well, maybe they don’t know either.
(P.S. Did you spot their grammatical error? Zen koan for you: If a sentence has an article-count mismatch and no one cares to read it, is it still grammatically incorrect?)
Ad.ly is still around at least, but wisely pivoted into matching celebrities (like Mandy Moore) with major brands (like NBC). They “survived.”
Both of these companies have millions in funding, so they can afford to try new things or just flounder around. Bootstrapped companies have no such luxury.
Of course you can’t conclude that using another platform is automatically imprudent. All technology depends on “platforms” — operating systems, browsers, libraries, even pre-existing customer prejudices. But you can say that some platforms are still undergoing tumultuous change and are harder to depend on, particularly if your entire company depends on it.
The Apple App Store is perhaps the best example of a tempestuous platform, famous for screwing innovators without notice. Scandals fly almost weekly about some iPhone app inexplicably prohibited (or allowed). One telephony app is banned, the next is sanctioned. One day you’re an awesome analytics platform like Flurry, the next day Steve Jobs calls you out by name because you’re “pissing us off.”
If an iPhone app is a fun, useful addition to your offering but it wouldn’t kill you if it vanished tomorrow, that’s great. If your entire company is based on an iPhone app, this is critical.
In my opinion SEO is the same way. It’s an ever-shifting landscape of shit you chase without ever really knowing what the rules are. If you’re doing SEO as one of ten tactics to get people to show up to your site, that’s great. If you’re betting the entire business on getting traffic through search results, at any moment a competitor or the platform itself could oust you.
Some things look like scary platform lock-in but aren’t really. Take Heroku, a fully-managed Ruby on Rails platform. You “git push” your code and it’s automatically deployed across multiple redundant servers, as scalable as your wallet. Great, but they have all this black-box magic infrastructure that you’re now depending on, so isn’t that dangerous?
No, because it still just Rails and Postgresql — all the tools are freely available and you’ll have them installed on your laptop anyway. So if you had to leave Heroku, you’d just get a hosted server somewhere, “git clone” your code, install a database, and restore from a backup. Of course it would be a pain in the butt and could even mean a day of down-time and lost data, but that’s true no matter where you host. Your company is still alive. That means you’re exploiting Heroku as a tool; your business’s success does not depend on them.
My company WPEngine depends on WordPress, which is also a platform. (In fact, many people call us “The Heroku of WordPress,” an analogy I love but most WordPress folks don’t know what Heroku is, so unfortunately it’s not a good home page marketing message.)
But WordPress is different again because it’s an ecosystem, meaning not just a single technology controlled by a single company but a guild of many thousands of consultants, products, companies, and power users, all of whom depend on each other for revenue, attention, and credibility. Unlike Twitter, where social media marketing consultants don’t care which Twitter clients are most popular. Unlike Apple, where they rule with an iron fist no matter the consequences.
WordPress itself is open source; Automattic (the company behind WordPress) couldn’t kill off this community if they tried. But also we have five years of evidence that, quite the contrary, they love, support, and encourage this community, up to and including helping companies like WPEngine, like when we cut a deal with them that landed both of us on TechCrunch.
So even if you want to argue there’s no difference between a “platform” and this tangled knot of forces I’m calling a “ecosystem,” I’d still argue this one is stable and supportive with clear direction.
Salesforce is one of the greatest, smartest curators of their ecosystem. They intentionally don’t add really obvious features to the base product, exactly because it would harm companies who make money adding those very features. Salesforce knows they’re the shark, and ensuring the survival of the remora fish is vital for their own health and continuation.
So one way to avoid the platform-dependance problem is to not base your company around something that you already know is dynamic and out of your control. The other way is to diversify. Like with SEO for lead-gen, you still do it, but it’s not your only means of lead-gen. If it disappears you still have nine other ways to get people to your website. If you’ve tried nine things and none of them are working… I guess the problem is with you, not the ten platforms!
In the end you have to depend on something, and it’s always possible the rug could be pulled our from beneath you. At least don’t pick a rug that’s already moved around the house three times.
How do you avoid marketing platform dependence? Or do you think this argument is overblown? Let’s continue in the comments.
32 responses to “Marketing Platform Independence”
I would argue that Twitter indeed has an ecosystem and not a platform. There are plenty of application developers, marketers, and businesses like Dell that do quite well with it.
Where Automattic and Twitter differ is that upon entering WordPress’s ecosystem, it’s incredibly clear what exactly Automattic’s business model is. You know where you can step and where you can’t. Contribute to the WordPress community. Don’t violate Automattic’s reverence of GPL. Do that and you’ll be fine.
Understanding Twitter’s monetization plan is like understanding the South Park underpants gnomes’ monetization strategy. It’s not quite clear where product translates into profits, so it’s hard to know where you can tread and where you can’t as a developer in their ecosystem. Will they make money buying third party clients? Is the money in the real time stream? Advertising in streams? On search.twitter.com? Will they sell to someone like Google or Microsoft?
This is why I have insisted that Twitter disclose some sort of plan to its users and third party developers, so we know how exactly they are going to be viable in the future.
Facebook is also an ecosystem. They choose to gobble up good ideas that they can introduce to their user base like @replies, geolocation and location based deals. I have yet to see them eat up their own ecosystem though. That was pretty lame on Twitter’s part but a natural result of not seemingly having a tangible monetization strategy so far out in the game.
Awesome points, thanks!
OMG I don’t know which was better – this awesome post on web platforms and business strategies or @Michelle Greer’s reference to South Park underpants gnomes effectively tying the two together.
Agreed; with WP you know what needs to be done, how it’s making money, and where you fit in in regards to the food-chain.
Twitter is a strange beast – though the same about Facebook until they started implementing sidebar ads – should we expect to see more ads on profile pages?
Great article…not to be critical, but “remora” is spelled incorrectly.
Got it now, thanks. :-)
“dependant” is also spelled incorrectly in your first line, should be “dependent”.
Well, maybe the Automattic people can’t kill WordPress, but the SugarCRM guys have sure done their best to kill free SugarCRM. It may not be dead yet, but it is pinin’ for the fjords!
-XC
Jason,
What would you say about buying domain names for type in traffic as a marketing channel that can’t be taken away by a Google algo change or other methods?
I’d argue that business is already being taken away by google.
Haven’t you noticed that address bars now go to search results, not domains?
And Google’s Chrome is leading the way.
Not saying it’s a bad business! Just that it’s future is uncertain and not in your control, and if anything appears to be on the decline.
Vendor lock-in is vendor lock-in, whether the vendor’s customers are individuals or businesses. Best avoided in all cases.
It would be interesting if you also included a comparison of mysql and java, both open source and acquired by Oracle. Google is now being sued by Oracle for infringing on copyrights and patents related to Java. I am sure if Automattic was acquired by someone like Oracle or Cisco, this would have an impact on the “ecosystem”.
Where do you think Microsoft falls in the shark/ramora fish example? Are they a Salesforce who will let 3rd party companies thrive off extending their features, or are they an Apple who won’t let anyone near?
That’s been a worry of mine as I work on my current project(www.friendlydingo.com) as it could easily be added as a “feature” of the .NET platform in the future and effectively kill my product.
Microsoft is well known for killing off ramora-fish companies.
Moreover, they force non-competitive companies to chase their ever-changing platform, constantly stopping support for older systems. I left the Microsoft platform for exactly that reason — tons of effort just to tread water.
There are instances where those companies get bought instead of squashed, like Eric Sink’s Teamprise, but that’s not the norm.
I think the general feeling is more: praying Microsoft doesn’t come with the same feature, or does it poorly enough that there’s still an aftermarket.
That’s kind of what I was thinking, too. Luckily the idea I’m developing is portable to other platforms as it is based around html transformation, not something unique to .NET…I just happened to know how to do it in .NET so that’s where I started. The good news is that if MS ever did decide to include something similar in .NET it would probably take them several years to do so…hopefully giving me enough time to create a foothold for myself.
This is true. However, it is also true that a large company like Microsoft will more likely not go and start building software for verticals. I am currently building a web-based solution targeted to one industry, a very specific market and I believe that a company like Microsoft is not interested in such a “small” market.
Don’t know about Microsoft, but for other large companies like Intuit and AutoDesk it’s exactly the opposite — they specifically aim and go after verticals.
Maybe… however, you agree that this alone is not a reason to stop using one of these companies as a platform for a new software product, correct? There are many reasons why this might actually be a good idea and one of them is actually getting acquired by the bigger company providing the platform. In other words, if a product really rocks and is dependent on a platform… it will probably get bought by the platform provider or by a competitor ;)
Joel and Jeff had a very interesting talk about this on their pod cast.
http://blog.stackoverflow.com/2009/05/podcast-55/
When you dance with elephant, you may get stepped on.
I have made that same assumption as well long term but I haven’t really noticed it in reality. Declining PPC values has driven the industry down, but that shouldn’t affect companies using them for the traffic value unless their cost structure changed. Chrome is great but my assumption is that chrome users would be less likely to be navigating like this anyways (I will see if any parking company will give me an answer).
Of everything is fine, until it’s not. And it might be fine forever! Being platform dependent isn’t automatic death, it just means assuming a certain type of risk you should be aware of.
Of all the risks we take in startups, this isn’t the worst. It’s only ba if you’re not considering it at all.
Finally, in your case maybe you’re safe. But I feel: it worked because of browsers adding “.com” to words in the address bar, and it can be un-made just as easily by the sme forces.
Fair point. (The threading on this seems weird btw, am I doing something wrong by hitting reply on your posts?)
It did get some help, but a lot of people still type in ‘whattheywant.com’. That’s the real driving force, that behavior will probably change over time, unless they stopped allowing direct navigation or blacklisted nameservers they cannot take that away (I don’t see either of those going well/not being worked around).
I did talk to a friend who ran one of these companies, it was before Chrome came out though. He said he would have expected more IE users and such but what he recalled was there was a disproportionate amount of mac users. I can’t explain that one. Any idea why that might have been?
Viva la open source community! With so many platforms available, its next to impossible for a bootstrapper to compete as technology agnostic, so being open is a great alternative.
The current entrepreneur and lean startup renaissance does not give enough credit to open source.
The value of reduced risk is huge. There is no need to buy into the right platform. Making the wrong technology choice is not really an issue any more. It is possible to try tools before you buy.
Yes, tools do get better with new releases. It is also a fire and motion strategy. The time spent moving to the latest framework or OS version is time the product does not improve.
Good analogies with Heroku and Salesforce.
The topic is definitely not overblown. You talked about TweetUp and others which were left in exile when Twitter announced their advertising platform. We will get to see similar stories once more, when Twitter launches its analytics dashboard. There are n number of companies which are doing simple/sentiment-based analysis of people’s tweets for brand tracking. To be honest, I have been a part of one such analytics start-up and have seen some effort and time going in vain just because the parent company decided to do something similar. And of-course they can do it better because its Twitter’s data and they have the best access to it.
With Heroku, the line of dependency is very thin. So, the companies hosting themselves on Heroku won’t vanish even if it goes down.
When I read your post I thought about the whole ecosystem of people floating around the Second Life universe.
With voices of Linden Labs not going through the best of times (and their CEO position switching over every other day) I guess people basing their income on SL virtual goods (and there are many of those) aren’t sleeping their best nights.
What is more interesting – how to create a non locking product from traditionally locking product. For example you are web based project management product company. You are locking your customers because once they have 50 customers and 100 projects it is almost impossible to take data and move elsewhere.
What you can do to minimize locking risk for your customers in following and perfectly possible situations?
– you bust
– you are acquired and repackaged/repriced/killed
– they need functionality you will never implement
– they like other package
I would have to say many startups don’t know that the product they are going to build will be in squash territory.
For example: A facebook location deals concept was an obvious no no indicator, but others are not so easy. If a company had made a group chat function for Facebook it wasn’t clear that would get made until a month and a half ago.
How would many Facebook pages companies fair do if Facebook decided to implement many of their features?
What I feel you are saying is “don’t use crazy platforms”, but how do you know what’s in the chopping block category vs the buying category when working with a platform?
I never respond, but I have followed you for a long time. I love your blog. This particular post is something I’ve been thinking about for a long time for an idea of my own.
Of course in the broadest sense you never can know, but (a) some things are more risky, and (b) at least be aware so that e.g. you can be more alert to the platform’s stated plans and whether that might affect you.
For example, you say a group-chat feature in Facebook is a surprise, but I would argue that. FB already had chat for years, and given that most other chat clients have group chat it’s not a stretch to think they’d do it too.
On the other hand an entire platform for sourcing deals, promoting them, managing the activity, and fulfillment — that’s an entire business model which FB could theoretically reproduce, but there’s so many moving parts which are not in FB’s wheel house.
Of course there’s no rule, but I think the guidelines are clear – (a) what’s the current ecosystem like, (b) do they have a pattern of stomping remora fish or helping? (c) how often are they adding new features, and how varied are those?
So for example with point (b), patterns can change, especially when one company is bought out by another, but you have to depend on something and that seems like a reasonable assumption.
All startups are risky; most things are outside your control. At least you can try to be more aware of what the risks are so that you’re making a calculated decision, and so you can monitor the things that are likely to have large impacts in your business model or market.
Great post!
Personally I’m almost totally dependent on Google for my traffic.
But using one platform to become more of an authority in your business, before expanding to other ways to generate leads is not a bad thing.
Use google as a ladder, and once you are high enough you can start to get less dependent and built yourself an escalator…or elevator.