Saturday, June 12, 2010

Anticipating Change - Another Lesson...This Time From Twitter

Today I was reading a very good article on which addresses investment in startup businesses  built around Twitter.  The thrust of the article is that Twitter's acquisition of Tweetie, and its limitations on building ad-based businesses around the Twitter platform, is making it very hard for Twitter-based startups to attract investors.

Ok, I don't want to sound too sarcastic here, but....duh!  That's not a comment on the journalism in the article, but on the apparent surprise being experienced by these would-be entrepreneurs.  As we are seeing more and more, especially in the areas of media and technology, you can't build a business model that depends on someone else to keep doing what they are doing.  

Companies change; people change; the business environment changes -- this is happening every day.  Don't plan  your business expecting that anything will be the same by the time you implement the plan.  You need dynamic plans that can change faster than the surrounding circumstances.  You need plans that thrive in an unstable environment.  You need to be moving your cheese so fast that everyone is trying to keep up with you -- not the other way around.

Honestly, if you come up with a great way to make money from Twitter's platform, why would you expect that Twitter wouldn't do it themselves?  Why would they let you make money that they could be making?  They will only support your success if it ultimately brings them more success. It's a basic tenet of business.

Here's the lesson -- don't chase Twitter or Google or Relativity or Summit or anyone else.  Instead, be the next big thing.  If you don't have a truly innovative idea that doesn't depend on anyone else, then don't launch your company until you come up with one.

(As an aside, the author of the article, Om Malik of GigaOM  (@gigaom)- a super bright guy - definitely understands all of this.  But he also seems to reach the conclusion that it is in Twitter's self-interest to act more predictably.  I'm not sure if I agree, although it's a great issue to ponder.  Om implies that successful platforms have usually grown by supporting their developer base, and goes on to point out that the platform owners almost always reap the bulk of the benefits from those relationships. He draws  parallels between Twitter and Google, Intel, Apple, Microsoft, Sony and Facebook. All of this is what makes the article so good.  I recommend you spend five minutes and give it a read.)

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Jaxon said...
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