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Never? The does seems like a strong word. It could be argued that there exists quite a few businesses built almost soley around credit cards for transactions a

by wamatt 14y ago

Never? The does seems like a strong word. It could be argued that there exists quite a few businesses built almost soley around credit cards for transactions and hence income. This in turn requires playing by Visa/Mastercard's rules, which is a situation not too dissimilar from the one described above.

endgame 14y ago
Never.
neya 14y ago
Your argument would be valid, but the scenarios you cite are totally orthogonal. Here's why: 1) You don't pay Facebook for their API. If something isn't working, you can't question anyone, nor are they liable to answer you. In short, they are doing you a favor by letting you use their API free of cost. 2) A credit card processor like Visa/Mastercard takes your money, and returns you a service instead. IF something isn't working as it should, you can call them and ask them what's wrong and they are liable to answer you, you can even request a refund, failing to provide which you could possibly drag them to a court, which isn't the case with an free API provider like Facebook/Twitter. 3) When you integrate the Facebook platform as an additional feature to your site, it's totally fine as long as it doesn't affect the core business model, because even if something gets screwed, users will not worry about a tiny missing feature. But when you build a business on top of someone else's API, be it Twitter or Facebook, it's like building a sand castle at the scale of a real world house and expecting it to be there forever. That's how vulnerable your business model becomes, because there is SO much that you have no control over. In the case of a credit card processor, they don't control your business model, they just do you a service in exchange for money, which is totally different, and you can change providers at a later stage if you find them unsatisfactory, which isn't the case with building something on top of an API like that of Facebook's/Twitter's.
- wamatt 14y ago
  I welcome your additional precision and those those are good points. However, I think that you should hold the word "never" to the same standard. I certainly used to preach the same view as you to anyone that would listen, but over the years I've seen many successes that violate the rule. Rationally speaking "never" does not make sense. One needs to evaluate (among many things) the risk of being shut down, how much benefit can be extracted before termination, and what the overall cost (money, opportunity cost etc) and benefit is etc. "Zynga's first game, Texas Hold'Em Poker, now known as Zynga Poker, was released on Facebook in July 2007." [1] Yes Zynga suffered immense hardships because of the Facebook reliance, but Pincus still built a billon dollar company which would not have happened if he'd taken your advice to heart in 2007. [1] http://en.wikipedia.org/wiki/Zynga http://en.wikipedia.org/wiki/Zynga
  - neya 14y ago
    I agree, but the core product here is the Game itself and not any of Facebook's functionality. Sharing was only an added benefit. If you recollect, the original game was hosted on Zynga's main website (where you could go directly and play if you wanted) and it was served via an iFrame on Facebook's app (this was before even Facebook came up with the app rules of having an iFrame). So, if Zynga, for example, had built a messaging service that was completely dependent on just Facebook's API, like the Start-up in question, I think they would never have seen the money they saw. I agree, 'never' was perhaps too strong, maybe I should have said '99% of the times'.
  - mbesto 14y ago
    Let me settle this for you guys. "There is an inherent risk associated when developing on top of someone else's platform. It's your job as a business creator to identify that risk very early on and mitigate it as much as possible. It is impossible to eliminate. Blindly assuming it's not a risk, can easily lead to large stakeholder management problems down the line."

by wamatt 14y ago

endgame 14y ago

Never.

neya 14y ago

Your argument would be valid, but the scenarios you cite are totally orthogonal. Here's why: 1) You don't pay Facebook for their API. If something isn't working, you can't question anyone, nor are they liable to answer you. In short, they are doing you a favor by letting you use their API free of cost. 2) A credit card processor like Visa/Mastercard takes your money, and returns you a service instead. IF something isn't working as it should, you can call them and ask them what's wrong and they are liable to answer you, you can even request a refund, failing to provide which you could possibly drag them to a court, which isn't the case with an free API provider like Facebook/Twitter. 3) When you integrate the Facebook platform as an additional feature to your site, it's totally fine as long as it doesn't affect the core business model, because even if something gets screwed, users will not worry about a tiny missing feature. But when you build a business on top of someone else's API, be it Twitter or Facebook, it's like building a sand castle at the scale of a real world house and expecting it to be there forever. That's how vulnerable your business model becomes, because there is SO much that you have no control over. In the case of a credit card processor, they don't control your business model, they just do you a service in exchange for money, which is totally different, and you can change providers at a later stage if you find them unsatisfactory, which isn't the case with building something on top of an API like that of Facebook's/Twitter's.

wamatt 14y ago
I welcome your additional precision and those those are good points. However, I think that you should hold the word "never" to the same standard. I certainly used to preach the same view as you to anyone that would listen, but over the years I've seen many successes that violate the rule. Rationally speaking "never" does not make sense. One needs to evaluate (among many things) the risk of being shut down, how much benefit can be extracted before termination, and what the overall cost (money, opportunity cost etc) and benefit is etc. "Zynga's first game, Texas Hold'Em Poker, now known as Zynga Poker, was released on Facebook in July 2007." [1] Yes Zynga suffered immense hardships because of the Facebook reliance, but Pincus still built a billon dollar company which would not have happened if he'd taken your advice to heart in 2007. [1] http://en.wikipedia.org/wiki/Zynga http://en.wikipedia.org/wiki/Zynga
- neya 14y ago
  I agree, but the core product here is the Game itself and not any of Facebook's functionality. Sharing was only an added benefit. If you recollect, the original game was hosted on Zynga's main website (where you could go directly and play if you wanted) and it was served via an iFrame on Facebook's app (this was before even Facebook came up with the app rules of having an iFrame). So, if Zynga, for example, had built a messaging service that was completely dependent on just Facebook's API, like the Start-up in question, I think they would never have seen the money they saw. I agree, 'never' was perhaps too strong, maybe I should have said '99% of the times'.
- mbesto 14y ago
  Let me settle this for you guys. "There is an inherent risk associated when developing on top of someone else's platform. It's your job as a business creator to identify that risk very early on and mitigate it as much as possible. It is impossible to eliminate. Blindly assuming it's not a risk, can easily lead to large stakeholder management problems down the line."