Third Party Platforms – Building on Thin Ice

April 13, 2010

Twitter announced that it will be launching its own application.  It’s a smart move for Twitter for a host of reasons.  Unfortunately, the move doesn’t bode well for the TweetDecks of the world (i.e., companies that have been building a business on the Twitter platform).

This story has repeated itself over and over again in a variety of ways and contexts.  For example, building a business on the Facebook platform is a scary proposition.  Facebook has repeatedly changed the rules for application developers, and will continue to do so.  iPhone/iPad application developers are likewise subject to the whims of The Apple.  Even if platform changes don’t drive you out of business, they certainly make it hard to plan (which ultimately impacts the value of a business).

Furthermore, the longevity (or stability) of third party platforms would seem to be decreasing.  Building software for desktop platforms at least got you several years of runway (WordPerfect and Quattro Pro had decent runs).  In contrast, building applications for a web based platform, like Facebook, is day to day.

Aside from the risk of platform rule changes, platform decline is also a risk (e.g., Palm OS, MySpace application platform, etc.)

The best practice is to leverage third party platforms versus becoming completely dependent on them.

Third party platforms should be used, for example, to create direct, platform independent, relationships.  For example, Facebook game developer Zynga, should strive to move some of its traffic elsewhere.  In other words, develop a platform portfolio to mitigate risk.

Also, there are interesting business (at least in the short run) helping others navigate third party platforms.

Gigya and Clearspring are examples, in that they help publishers and marketers grow social media audiences (although, it’s still unclear where these companies end up).  Portland’s Urban Airship aims at making it easier for mobile application developers to deploy certain features.

Service providers focused on helping technology and media companies manage third party platforms are also interesting, if not scalable, businesses (e.g., Portland’s Small Society focused on helping marketers leverage the iPhone/iPad platform).

When you build your business on a third party platform, you are a renter versus an owner.

[Note: Related issue of Apple locking down developer tools.  Making some developer folks pretty angry… ]

[Note 5/24/2010: Twitter making platform changes to block third party advertisers.  Twitter development community is unhappy – they should not be surprised.]


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3 Responses to “Third Party Platforms – Building on Thin Ice”


  1. Whether you are a renter or an owner, you are subject to market pricing. Ask any “owner” who can’t make his mortgage payment.

    • Tom Turnbull Says:

      As a renter I have to worry about my landlord raising the rent, not properly maintaining my unit and ultimately kicking me out when she decides to do a condo conversion.

      As an owner with a fixed rate mortgage, I feel a lot more comfortable doing a kitchen remodel.

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