Fred talks about an alternative to M&A; as an exit strategy for companies, but also discusses the degradation of services following an acquisition: delicious, feedburner, and TACODA being some of the examples.
Archive for April, 2008
Open platforms like Linux, Google’s Android, Open Social, and Facebook seem to have many positive attributes. Arguably, they allow for a community of developers to create a suite of applications and to use the power of that community to rapidly improve on those applications. This generally means good things for users. Users are more likely to be treated to a broad range of choices when a platform is open, and specific niche audiences are more likely to be supported in some way by some small group of developers somewhere. It’s generally a feel-good story.
But what happens when the “owner” of that open platform is a commercial enterprise? The experience of Facebook developers Social.IM and FriendVox may be an indication. It seems that in their efforts to use the Facebook platform to develop unique and interesting applications, they ran into a challenging competitor – Facebook. With the launch of Facebook chat, Social.IM and FriendVox and other developers of chat applications for Facebook are pretty much washed up. Any chance of getting additional rounds of funding or selling their business have been dramatically reduced. Why would anyone want to develop on a platform when the platform owner is likely to reproduce your product for its own purposes?
Google’s recent launch of App Engine and the silliness of its Campfire rip-off demo will most likely scare a few developers as well. While not an open platform as such, App Engine provides another large company the opportunity to see how others innovate and then replicate that work. While this isn’t what happened with the HuddleChat demo, the opportunity is there.
Certainly, there are products out there that have received a huge boost in traffic and revenue by developing on the Facebook platform. But small software startups who are looking to protect their IP should be wary of jumping on the open platform bandwagon.