Distribution is a critical ingredient to the success of any physical or online product. It doesn’t matter if you have the best product in the world, if you don’t have excellent distribution no one will know about it.
Over the last 5 to 10 years, an interesting new paradigm has arisen on the Internet that has fundamentally changed online distribution forever.
Social services like Facebook and Twitter have grown exponentially and revolutionised how we communicate with our friends, how we consume news, information and media. Breaking news appears online first, and televisions shows reference social streams and urge viewers to join the conversation online.
Location services like Foursquare and Yelp have crowdsourced a geolocation layer of data across the modern world. We now have an amazing depth of knowledge about the world we live in right in our pockets.
WordPress has been one of the truly great enabling factors of the Internet that has given anyone with an Internet connection a voice. The traditional gatekeepers of publishing have lost their control and now anyone in the world can seize the opportunity to become a publisher.
And finally, the iPhone completely revolutionised the strangle hold mobile phone networks had on what software we could have on our phones. The iPhone introduced the App Store and in doing so created a platform for developers to build software and deliver it straight to their customers.
Each of these platforms offer both benefits and drawbacks to developers. Whilst on the one hand they offer unparalleled access to users, in each case at least some aspect of control of your own destiny is lost.
In this post I’ll be looking at each of the 4 major platforms, the benefits and drawbacks and how you can mitigate those drawbacks to prevent handcuffing yourself to someone else’s future.
The problem so far
The risk of building on someone else’s platform is a fairly new one, but there have already been a number of high profile cases. When you build on someone’s platform, you get instant access to a large, engaged audience. But you must also play by the platform’s rules, and you sacrifice the flexibility and stability of your future as a company.
The Zynga and Facebook relationship is probably one of the most high profile cases of building on someone else’s platform. Zynga was one of the first Social Gaming companies that built on top of Facebook’s Connect platform. Zynga enjoyed massive growth from Facebook, but has since been unable to show that same growth on it’s own or through mobile gaming. The trouble of the relationship can be seen in the continually falling prices of both companies stock. Zynga became too reliant on Facebook, and Facebook had the majority of their revenue directly coming from Zynga.
There have also been other cases where developers have been burned by the platforms they have built upon. Dalton Caldwell started a Twitter alternative App.net after Facebook tried to bully him out of his company (…Dear Mark Zuckerberg). Twitter has also famously blocked Instagram and Tumblr from using their API for finding friends on their service and has also cracked down on developers creating alternate clients.
As more and more cases of platforms tightening their API rules, is it really wise to tie your success to the future decisions of another company?
One of the real big advantageous of Twitter and Facebook is the graph that maps all of our connections and who we are interested in enough to follow. Twitter and Facebook really defined the new wave of online Social applications by building a platform rather than just a service.
It’s now expected that most new Social Consumer applications have Facebook and Twitter integration built in. This smoothes the on-boarding process by allowing new signups to quickly find the people they already know who are using the service. It also gives the application the opportunity to grow through a Viral Coefficient by allowing it’s users to share out to their existing connections on other Social applications.
Building on top of Facebook and Twitter is a fantastic opportunity if your application is just finding it’s feet. Previously it was much harder to find new users and allow your current users to help grow your product. With Twitter and Facebook integration, all of these problems have already been solved.
But it’s easy to become addicted to this source of growth. It’s not a good sign if the majority of your traction, traffic and growth is coming from any one Social platform. As I’ve already mentioned, there are countless examples of companies that have become reliant on Facebook or Twitter for growth. When either of these two giants decide to either replicate your product, or cut off your access to their data, you could quickly find yourself in trouble.
Advice: Do not rely on any other service for your traction or growth. It’s good to integrate with other services, but you need to ensure your product is compelling enough to grow on it’s own accord.
The recent smartphone revolution brought with it connected handheld devices that are more powerful than desktop computers from just a few years ago. Mobile Internet is coming of age and mobile technology is finally realising the impending vision of the last 10 years.
One of the new abilities of modern smartphones is to track and broadcast location information. These new sensor enabled devices paved the way for location based services like Foursquare to build a new data layer of information about the places around us. Foursquare has crowdsourced billions of checkins from millions of users around the globe to build a real time data mine of what is going on right now.
Foursquare’s data is a huge competitive advantage in the mobile location space. For a company starting today, it seems unsurmountable that they could ever beat Foursquare at building a better dataset.
Whilst it’s still relatively unknown what path Foursquare will take in the future, it can safely be said that they are only of a few players who truly own the location dataset. So far Foursquare has been open with their API, allowing other companies and developers to build off their data. However it is not unthinkable that Foursquare will change the rules of the game and possibly destroy anyone other company that is relying on Foursquare’s location tools.
Advice: Whilst it’s fine to build off the readily available adjacent services, it would be a mistake to rely on that availability for core features of your product.
The Internet has democratised many different industries over the years, one of which is media. Publishing has been dramatically changed over the last 20 years. These days, publishing companies are forgetting about the capital intensive, low profits and inventory risk of physical publishing to move into the dynamic and highly engaged global opportunity online. Countless magazines and newspapers are now focusing their attention exclusively on the new world of online publishing and many more continue to make the transition.
At one time, Gatekeepers decided who and what would be published in books and magazines. Any individual in the world can now become a publisher with simple tools that allow you to be up and running in minutes. Hosted services like Tumblr, Svbtle and Medium allow you to publish into growing networks of audiences whilst self hosted Open Source software like WordPress allow you to manage and host your content on your own domain (psst WordPress is also available as a hosted service).
WordPress has become one of the most widely used Open Source projects to date. Almost 20% of all new websites are powered by WordPress and it is being used by individual bloggers all the way up to the largest organisations in the world.
Whilst I love WordPress, the project inevitably suffers from problems.
Depending on your outlook, the benefits and drawbacks can either be positives or negatives.
Firstly, WordPress is backwards compatible back to almost it’s inception. This is good for ensuring old themes and plugins continue to work. But it means that the growth of the project is hampered by legacy code.
Secondly, WordPress has evolved into so much more than just blog software. WordPress has become a fully integrated Content Management System and can be extended to become an Ecommerce website, Social Consumer applications and many other things. Whilst the power to extend WordPress is great, it inevitably means that a lot of the possibilities are just complicated extras if all you want to do is blog.
WordPress is not a problem for publishers as it’s fairly simple to get your content out of a MySQL database and in to any other format. However, it is the countless companies and projects that build upon WordPress that need to be wary of putting their future into the hands of WordPress.
It’s difficult to mitigate the risk of building upon Open Source software. WordPress might eventually splinter into more application specific software, but for the foreseeable future, building your entire company future off an Open Source project is taking a risk.
Advice: Use, support and contribute to Open Source projects like WordPress because it is these projects that really power the opportunity of the Internet. However, don’t put all of your eggs into one Open Source project as it is too unpredictable for what the future might hold.
Another of the really revolutionary powers of the Internet is the transition from connected network, to distribution network. One of the most powerful applications of this has been in the Software industry.
When all software was distributed through CD-ROMs, software was shipped on a yearly basis and required complex distribution networks of creators, manufacturers, wholesalers and retailers. These days the majority of all software is delivered in real time over the Internet.
Before the iPhone, network operators and phone manufacturers had complete control on what software you could use on your mobile phone. With the introduction of the App Store, you can now download any application you want.
This is not only great for the consumer, it is also a huge opportunity for developers large and small. It is now possible to create an application and sell it to a global market of millions. All payments and refunds are handled for you and there is a centralised place for consumers to discover your app.
However, once again, with these opportunities, also comes drawbacks. The App Store is fraught with negatives. Apple have a strict policy of rejecting an App that does not meet it’s requirements. Approval can take weeks which means that shipping updates to customers can be slow and tedious. Apple also have complete control over who and what is promoted, and so discoverability is still a problem.
It goes without saying that the App store is a huge opportunity for developers to get their software into the hands of consumers. But once again, becoming too reliant on this as your only source of income is taking unnecessary risks. Apple has a habit of releasing it’s own Applications that look to emulate already established successful apps. Apple is a 400 pound gorilla you don’t want sitting on your only stream of revenue.
Advice: Use the App Store to build up revenue, a user base and a following, but don’t rely on it forever. Build value and opportunities for your company away from centrally controlled platforms like the App Store and more towards the decentralised open Internet.
Mitigate the risk
Building on top of an established network is a massive opportunity when you are looking to add traction to a product. You get access to users and their network and the opportunity to spread your message through Viral growth. But becoming too reliant on any one network is putting your company’s future at huge risk. For-profit companies need to do what is in their best interest in order to survive and grow. Companies and products need to make constant dramatic shifts in order to keep ahead of the curve and to extend into new opportunities for growth. If you rely on any one source to grow, you could find that the owner of that source has suddenly killed your business.
There are far more platform opportunities out there than I have mentioned in this post. For example, Dropbox and Spotify allow developers to do interesting things with storage and music respectively. But if these are core features of your product, or you are relying on access to these platforms in order to use your product, you are asking for trouble somewhere along the line.
Whilst Business Development relationships usually start out optimistic, you can’t rely on anyone else to dictate your company’s future. Don’t allow your future success to be handcuffed to the decisions of someone else.