Disagreeing with Jason Calacanis about Platforms
Every business has platform risk. That’s the game on the field.
I was listening to jason on Mashable’s ‘Biz Please’ podcast, talking about spurning platforms like Google and Facebook because they take advantage of partners, and just had to disagree a lot.
Now, Calacanis is exponentially more experienced and successful in tech business than me, but when was the last time that stopped anyone from opining on the internet?
Risk is Inherent
Like many people in the industry, I’ve experienced the downsides of large platforms changing their products or policies. I’d certainly have more pocket money if Facebook pages worked the same way they did in 2010, so Fortune 500 companies were still hiring agencies to build specialized apps like games and contests to drive Facebook likes.
However, things like that change. I think you have to be ‘Zen’ about it.
Every business has ‘platform risk’ or equivalent partnership issues. FinTech is dependent on co-operation from banks. Spotify is dependent on record labels and vice versa. Even pure Software-as-a-Service apps with no external partnerships have to worry about decisions made by the cloud provider or software frameworks they use. Not to mention random policy issues like Apple’s tax issues in Ireland. It’s strategic risk all the way down.
You have to deal with the environment in which you participate. As Bill Gurley says, “Everybody to a certain extent has to play the game on the field… [or] you’re not gonna matter. You might as well lock the door and leave the building.”
Icarus also flew
Just to make an obvious point, the value of platforms is in distribution. (It’s why I’m posting this on Medium!) To pick two opposed examples, you could be like Buzzfeed and think ‘fine, we’ll publish everywhere’ or you could be like the Financial Times and set up paywalls. The problem is that if you stubbornly do your own thing, and you’re not the FT, you might end up struggling for both reach and revenue.
In the Microsoft era, critics of building on the Windows platform used to call it ‘sharecropping’ (and this was before mobile app stores that take an explicit cut!) Symantec managed to share crop their way to some real success, right?
Yes, the platform you’re building on might begin to limit you, stop supporting you, or even start competing with you. Did you benefit before they did that? Of course. Why be so upset now? Like the poet said: “Everyone forgets that Icarus also flew / It’s the same when love comes to an end…” It was good while it lasted.
Now, I’m not saying you should build your entire company on Snapchat. You have to plan for the good times to end. Think of a platform like a ‘channel’. Use the distribution to get new users, then build direct relationships with your users on your own platform.
No Exit
Maybe it’s just catchy positioning, but the intensity with which Calacanis says he was burned by Google search and Facebook pages, and the way he sees the light in email newsletters, would make any human being with a sense of narrative, Epic of Gilgamesh onwards, a bit skeptical.
And with good reason: there is No Exit. You can’t be on any level on the tech stack and be too miffed that what you were doing two years ago no longer works. An obvious concern with email, for example, is the Gmail Promotions tab. Ask marketers how infographics are working out today. Ask front-end developers how their Angular code is holding up right now. Ask Yahoo — wait, Verizon, nevermind… Everyone in the tech world has to be agile and deal with a level of, frankly, chaos. How can a CEO or anyone at the strategic level be exempt?
Things always change. That’s the game on the field. Play ball.
Thoughts or feedback? Let me know in the comments.
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