Platform Risk Is An Absolute Danger For Startup Founders

Daily Blog #134

The news that’s come from Twitter cutting off access to a raft of core features for 3rd party developers is devastating for many, frustrating for everyone, and completely unsurprising to a few of us. It’s the ever present danger of building products that rely or subsist on someone else’s platform. It’s a danger that can’t be ignored.

We’ve seen this happen time and time again. Businesses that are built on someone else’s territory are always, permanently, clearly in danger of being shut down, shut off or cut off. It’s happened with various companies who staked their claim on Facebook’s features and communities, only to have the rug pulled out from under them.

Generally speaking, there are 2 ways that folks tend to rely on platforms that they don’t know, and in doing so court platform risk:

🍕 They rely on the platforms for growth

Relying on Facebook’s platform for your growth would have absolutely fucked you a couple years back when they significantly reduced the reach of non-paid posts almost overnight and the bottom dropped out of some of the biggest digital marketing engines on the planet.

The shift to paid advertising being one of the only ways to have your audience see your content wiped out a lot of people who had relied on it as their only source of growth.

This is also a danger for folks who bank too heavily on paid advertising on any one platform. You need to diversify your growth engine with multiple channels, or you don’t have a backup plan for when the single platform you’re drawing from will shiv you.

🍕 They rely on the platform for API access

This is where the Twitter devs have been caught. Their entire business model was in building 3rd party access to the Twitter platform, and without that — they don’t have a business at all. On the one hand, it’s incredibly shitty that Twitter have done this in the first place.

On the other hand, it was always a risk. A business cannot be built reliably and sustainably on someone else’s platform through an API because the long term game just isn’t there — you can’t guarantee the API access is gonna stick around mate.

I don’t have a lot of advice for businesses who are already doing this. Shift. Pivot. Get out. It’s not going to work. Unless you can get tangible guarantees of access, it’s not worth your while. Ultimately, I’d never back one of these companies.

Even if you do remain safe on someone’s platform in this way, you still run the risk of the platform turning around and blowing you out of the water by just stealing what you’re doing, integrating it better and calling it a feature rather than a company. That’s a huge part of platform risk, to me.

It’s just a dangerous place to play, because you can’t set the rules, you can’t make the moves, and you’re never going to be in control. It’s operating blindly and in absolute chaos. You have to be careful in limiting your own dependency on a single platform, whether it’s growth risk or access risk, it’s deadly.

I’ll be addressing it a little more in the next few months as I start to break into why platform risk is equally dangerous for content creators as it is for founders. We’ll see when that comes out. 🍕💯🔥