Uncompiled Thoughts

A few interesting things have happened this past week that should remind us all of the perils of building your business on top of someone else’s platform:

• Fred Wilson’s recent post describing the future of the Twitter platform has left developers wondering if Twitter is going to integrate certain core features (URL shorteners, photo sharing services) into their platform, leaving the third party versions behind.
• Apple’s iAd announcement, which has left people wondering about the future of third party mobile advertising solutions like AdMob and GreyStripe.
• And the big one of course, Apple’s recent iPhone OS 4.0 SDK agreement changes banning the use of third party intermediary compilers, which affects Adobe’s Flash CS5 to iPhone compiler, and third party application platforms like Unity3d , Appcelerator Titanium, Monotouch, and Corona.

In all of these cases, several companies’ products are now threatenend because the owner of the platform decided that they either:

1. No longer wanted to allow the product.
2. Wanted to implement the product themselves.

These examples finely illustrate the point: if you are building your business solely on top of someone else’s platform that they have full control over, you’re taking a massive gamble. This is especially true with Apple, which has a history of being pretty controlling with what is allowed on their platform.

This isn’t to say that building for someone else’s platform can’t be very profitable. Over the past few years we’ve seen some very successful iPhone apps, Twitter apps, and Facebook apps. And that success is what has driven more and more developers to continue building new apps for these platforms.

But you’d better have an exit strategy that involves becoming independent from your parent platform. Be aware that at any time, the rug can be pulled out from under you. We’ve seen it repeatedly in the past, and several times just this past week. Have a contingency plan in place, other platforms to target, other ways to distribute your product. Don’t want until Apple/Twitter/Facebook decides that they want to take over your core business: by then it will be too late.

Should you be pissed that Apple has added restrictions on their platform that can potentially put your company out of business (or at least dramatically decrease its value)? Sure.

Should you be annoyed that your URL shortener or photo upload service might become irrelevant once Twitter integrates those core features? Sure.

Should you be surprised at any of this? Only if you weren’t paying attention and weren’t aware of the risks.

Update:
Another example just announced: Twitter acquires the Tweetie iPhone client, effectively turning it into the official Twitter iPhone app. Good for them, too bad for the other iPhone Twitter clients that weren’t chosen. The Twitter <-> developer ecosystem is shifting.