The Dangers Of Tying Your Business To Another

Recent announcements by Twitter and Apple have significantly impacted each company’s developer network (more about Apple in a few days).

As many of you know, Twitter decided a few days ago to acquire the company that makes and sells Tweetie, a popular iPhone client. Prior to this acquisition, Twitter didn’t have its own iPhone application. In part, this was because a healthy and broad third party ecosystem of Twitter apps was developing around Twitter (most of the third party developers, like Twitter, had no revenue model).

Twitter’s decision has caused many in the Twitter developer ecosystem to wonder about their future and whether Twitter’s continued search for a revenue model would put more Twitter-dependent companies out of business.

Twitter’s announcement (and the reaction from Twitter’s developer community) highlights something that’s always been a risk: tying your business to that of another company. I discuss this risk in the following short video.

What do you think? Do you think companies should ever feel comfortable tying their future to a single ecosystem?

  • http://ianglang.com Ian G. Lang

    I remember when the sole goal of some business startups was to be purchased by IBM or Microsoft. That was all they drove toward. Maybe they would qualify for a “Businesses of the 80′s ..Where are they Now?” TV series.

    In building business, you may need to lean on somone else for support from time to time, but you should never build on the assumption they’ll always be there.

  • http://www.rosskimbarovsky.com Ross

    Excellent reminder, Ian – and so true given what we’re currently seeing in the marketplace with Twitter.

  • http://www.watcheditem.com/search Michelle

    Insightful post, Ross!

    Building a business on an ecosystem is volunteering to be a flea holding onto the tail of a dragon.

    It’s a life of fear. You must accept the mothership’s terms or leave.

    But it’s a viable game for bootstrappers. Solve a smallish problem in an ecosystem like Twitter, eBay, and Apple as a means to cash, improved technical skills and strong reputation.

    Cheers, Michelle

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