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I'm always hazardous when building something on someone else's infrastructure. If they can shut down your entire income stream "just because", that probably isn

by highace 13y ago

I'm always hazardous when building something on someone else's infrastructure. If they can shut down your entire income stream "just because", that probably isn't a good situation to be in.

dangrossman 13y ago
Everyone's in that situation. If you're selling online, your host can shut you down. Your payment processor can shut you down. Your supplier can shut you down. If you sell offline, your landlord can shut you down. Your bank can shut you down. You can set up a table in front of your house and try to sell from there with cash only, and your city/township can come shut you down. Until some of that happens, it probably makes sense to avail yourself of the most profitable venue and marketing channels available to you; if Etsy brings you exposure you wouldn't have operating elsewhere, use it until you have a problem. Most people probably aren't capable of replicating the entire commercial ecosystem just to avoid being reliant on any of it, and even when they are, focusing on that instead of getting their product/service in front of customers probably isn't the most profitable path. It's better to have contingency plans for unlikely events than to act like they've already happened.
- mistercow 13y ago
  The key is to be able to swap out as much as your set up as possible with something roughly interchangeable. You have to ask yourself, every time you rely on somebody else, "If these people drop the hammer on me, what will I do?" For example, if you develop an iOS app and Apple decides (for whatever reason) not to accept it, you will have a bunch of useless Objective-C code, which can basically be ported to another language and platform, or thrown in the trash. Conversely, if you develop a web app on a cloud PaaS, and the provider treats you wrong or isn't reliable, you can swap out with another service, or host it yourself. You may have to do some work to get everything situated in the new environment (how much work that is depends on the service, from what I understand), but you do have a backup plan in case things go south.
- greenyoda 13y ago
  Hosting providers' terms of service are usually pretty straightforward: unless you engage in illegal activities or interfere with their operations, they won't shut you down. In any case, it's easy to find another hosting provider if you need one. Landlords can't easily throw you out before your lease expires. They usually have to give you notice in advance that they won't be renewing your lease. Commercial leases are frequently long-term, since no company wants to have to deal with relocating every year. A lease is a contract enforceable in court. Dealing with Etsy's somewhat arbitrary rules seems quite a bit more precarious. I don't think that anyone who invested a significant amount of capital in their business would want to put up with that kind of uncertainty.
- gwern 13y ago
  > Everyone's in that situation. If you're selling online, your host can shut you down. Your payment processor can shut you down. Your supplier can shut you down. If you sell offline, your landlord can shut you down. Your bank can shut you down. You can set up a table in front of your house and try to sell from there with cash only, and your city/township can come shut you down. True, but in each of the situations, there's generally a lot of doable options. Hosting is a completely commoditized business with thousands of plausible options. For payment processing, there are many possible processors just for credit cards, 'show online pharmacies stay up, and many options to credit cards (including up-and-coming things like Bitcoin). 'Your supplier' is too generic to address, so maybe not there. There are many houses or buildings on the market to try out if you're able to make the rent in the first place, so that's not a huge issue. Countless banks to choose from, both online banks and mortar banks. And you may well be switching city/township in the first place when you're leaving your current landlord, so as long as you don't have to leave the country (which could be a big issue) you're not terribly badly off unless you're a local business which needs to be in a specific place. In contrast, how many successful marketplaces for handmade goods are there besides Etsy?
AJ007 13y ago
This is a major problem for a lot of digital businesses. Consider the following platforms that deliver vast quantities of consumer have alternatives which are tiny in market size or severely lacking: -Google Adwords, Adcenter delivers a fraction of the traffic with continual quality issues -Google's organic search traffic. Encyclopedias could be filled with stories of companies that built large businesses around Google's targeted free traffic, and flopped. -Facebook, no meaningful alternatives in size and scope. -eBay, any other giant auction market? -Craigslist, I can't think of an alternative to this either. -App Store, alternative being Cydia, not a great one since all of your customers have to "break" their phones. -Google Play, a fractured market of disappointing alternatives such as Amazon's Appstore. It is easy to say, just diversify your source of customers -- but that is very hard to do due to numerous reasons. In this particular case the platform (etsy) user discovered these pitfalls early on. Often companies don't discover this until they've borrowed or raised millions of dollars. In some circumstances, the product itself is platform dependent (App Store or a Facebook social game.) Irregardless of the dependance, business owners and employees develop expert knowledge about the particular platform by necessity and shear time spent navigating potential and existing shortfalls. If they manage to succeed, that particular platform delivers huge amounts of users in a very addicting manner. Investing time in an alternative is unlikely to result in the same volume and value users of users because the actual business model of the company was molded around that user platform's uniqueness! iOS users are different than Android users. A user that arrives through a Facebook ad is very different from a user that performed a search on Google. (By the way, that is usually the root of the stories that X platform/traffic/advertising is crap.) I propose a new executive job title, Chief Platform Dependance Officer. This is a very critical topic to every start up and internet business requiring a steady stream of mass market consumers (more market dependent for b2b.)
paulhauggis 13y ago
This is my thinking as well. I had my entire business shutdown on Amazon a couple of years ago. No amount of explaining did anything. They have automated responses that are made to appear like real people responding to you. They also kept my remaining balance for 90 days. I was lucky that it wasn't my only income stream. As a buyer, you get all the power on sites like this. I can see why they do this (they want Amazon to be a trustworthy marketplace), but it's unfair to legitimate sellers that get banned because an automated script somehow thinks they are doing something illegal or against the ToS.

by highace 13y ago

I'm always hazardous when building something on someone else's infrastructure. If they can shut down your entire income stream "just because", that probably isn't a good situation to be in.

dangrossman 13y ago

Everyone's in that situation. If you're selling online, your host can shut you down. Your payment processor can shut you down. Your supplier can shut you down. If you sell offline, your landlord can shut you down. Your bank can shut you down. You can set up a table in front of your house and try to sell from there with cash only, and your city/township can come shut you down. Until some of that happens, it probably makes sense to avail yourself of the most profitable venue and marketing channels available to you; if Etsy brings you exposure you wouldn't have operating elsewhere, use it until you have a problem. Most people probably aren't capable of replicating the entire commercial ecosystem just to avoid being reliant on any of it, and even when they are, focusing on that instead of getting their product/service in front of customers probably isn't the most profitable path. It's better to have contingency plans for unlikely events than to act like they've already happened.

mistercow 13y ago
The key is to be able to swap out as much as your set up as possible with something roughly interchangeable. You have to ask yourself, every time you rely on somebody else, "If these people drop the hammer on me, what will I do?" For example, if you develop an iOS app and Apple decides (for whatever reason) not to accept it, you will have a bunch of useless Objective-C code, which can basically be ported to another language and platform, or thrown in the trash. Conversely, if you develop a web app on a cloud PaaS, and the provider treats you wrong or isn't reliable, you can swap out with another service, or host it yourself. You may have to do some work to get everything situated in the new environment (how much work that is depends on the service, from what I understand), but you do have a backup plan in case things go south.
greenyoda 13y ago
Hosting providers' terms of service are usually pretty straightforward: unless you engage in illegal activities or interfere with their operations, they won't shut you down. In any case, it's easy to find another hosting provider if you need one. Landlords can't easily throw you out before your lease expires. They usually have to give you notice in advance that they won't be renewing your lease. Commercial leases are frequently long-term, since no company wants to have to deal with relocating every year. A lease is a contract enforceable in court. Dealing with Etsy's somewhat arbitrary rules seems quite a bit more precarious. I don't think that anyone who invested a significant amount of capital in their business would want to put up with that kind of uncertainty.
gwern 13y ago
> Everyone's in that situation. If you're selling online, your host can shut you down. Your payment processor can shut you down. Your supplier can shut you down. If you sell offline, your landlord can shut you down. Your bank can shut you down. You can set up a table in front of your house and try to sell from there with cash only, and your city/township can come shut you down. True, but in each of the situations, there's generally a lot of doable options. Hosting is a completely commoditized business with thousands of plausible options. For payment processing, there are many possible processors just for credit cards, 'show online pharmacies stay up, and many options to credit cards (including up-and-coming things like Bitcoin). 'Your supplier' is too generic to address, so maybe not there. There are many houses or buildings on the market to try out if you're able to make the rent in the first place, so that's not a huge issue. Countless banks to choose from, both online banks and mortar banks. And you may well be switching city/township in the first place when you're leaving your current landlord, so as long as you don't have to leave the country (which could be a big issue) you're not terribly badly off unless you're a local business which needs to be in a specific place. In contrast, how many successful marketplaces for handmade goods are there besides Etsy?

AJ007 13y ago

This is a major problem for a lot of digital businesses. Consider the following platforms that deliver vast quantities of consumer have alternatives which are tiny in market size or severely lacking: -Google Adwords, Adcenter delivers a fraction of the traffic with continual quality issues -Google's organic search traffic. Encyclopedias could be filled with stories of companies that built large businesses around Google's targeted free traffic, and flopped. -Facebook, no meaningful alternatives in size and scope. -eBay, any other giant auction market? -Craigslist, I can't think of an alternative to this either. -App Store, alternative being Cydia, not a great one since all of your customers have to "break" their phones. -Google Play, a fractured market of disappointing alternatives such as Amazon's Appstore. It is easy to say, just diversify your source of customers -- but that is very hard to do due to numerous reasons. In this particular case the platform (etsy) user discovered these pitfalls early on. Often companies don't discover this until they've borrowed or raised millions of dollars. In some circumstances, the product itself is platform dependent (App Store or a Facebook social game.) Irregardless of the dependance, business owners and employees develop expert knowledge about the particular platform by necessity and shear time spent navigating potential and existing shortfalls. If they manage to succeed, that particular platform delivers huge amounts of users in a very addicting manner. Investing time in an alternative is unlikely to result in the same volume and value users of users because the actual business model of the company was molded around that user platform's uniqueness! iOS users are different than Android users. A user that arrives through a Facebook ad is very different from a user that performed a search on Google. (By the way, that is usually the root of the stories that X platform/traffic/advertising is crap.) I propose a new executive job title, Chief Platform Dependance Officer. This is a very critical topic to every start up and internet business requiring a steady stream of mass market consumers (more market dependent for b2b.)

paulhauggis 13y ago

This is my thinking as well. I had my entire business shutdown on Amazon a couple of years ago. No amount of explaining did anything. They have automated responses that are made to appear like real people responding to you. They also kept my remaining balance for 90 days. I was lucky that it wasn't my only income stream. As a buyer, you get all the power on sites like this. I can see why they do this (they want Amazon to be a trustworthy marketplace), but it's unfair to legitimate sellers that get banned because an automated script somehow thinks they are doing something illegal or against the ToS.