The Web Platform Fallacy

In recent years, we have heard much talk of services like Facebook, Twitter, Salesforce and others being “platforms.” The implication is that they are much like operating systems like Windows, Linux, or OS/X where developers can build applications on top of them.

And that’s true, at least in a technical sense. The problem is that now companies are building not just applications based on these web platforms, but also their entire businesses.

From today’s Wall Street Journal:

In the past, entrepreneurs might have built a competing social network or made use of Facebook as a tool to drive traffic to their own sites.

But now, companies like BranchOut Inc., a professional network, and Yardsellr Inc., a social e-commerce application, have emerged that rely entirely on the social network’s users for their business. More such ventures are expected to pop up this year.

There is a big, and often unrecognized, difference between building a company around software that sits on top of an operating system and an application that relies on a web platform. Computer operating systems get installed on hardware and even if the developer makes a major change to that operating system, old software can still run on old versions of the operating system. Nobody comes and forces you to uninstall old versions from your computer.

If you are building an application, and ultimately a business, on top of a web platform like Facebook, Twitter, and Salesforce the same cannot be said. Those web platforms can completely disable your application and shut down your business with absolutely no notice. The only thing restraining them is public outcry and customer complaints – a thin protection indeed.

I am in no way advocating that you don’t take advantage of web platforms and even build applications that rely on them. But no business should base itself entirely on a web platform. This may be a quick route to short-term popularity and perhaps even a fast acquisition, but it is a miserable way to create a sustainable company. No business should ever depend solely on the good favor of one vendor, one customer, one platform, one employee, or any other irreplaceable component. Diversification is a must.

So go ahead and build your platform-based web application. But figure out how it becomes only one part of your strategy and not the only one.