"BizDev 2.0" when looking at the phenomenon of supplying commercial API keys to startup partners. Said Fake, traditional business development meant "trying to get hopelessly overbooked people to return your email. And then after the deal was done, squabbling over who dealt with the customer service. [It's] much, much better this way!" Three years later, many are finding that while APIs are great biz dev tools for the larger provider, startups can often suffer under the thumb of their platform keepers.In 2006, Flickr co-founder Caterina Fake coined the term
In November ReadWriteStart spoke to Lookery CEO Scott Rafer about his company's shutdown. Rafer counts his dependency on a single platform as being one facet of his downfall. Said Rafer, "I've ranted for years about how bad an idea it is for startups to be mobile-carrier dependent. In retrospect, there is no difference between Verizon Wireless and Facebook in this context."
In July 2008, unbeknownst to Ilan, Google was about to change its YouTube terms of service. According to the startup entrepreneur and father of two, Ilan found himself in a predicament. He had originally planned to find sponsorship for his community of curated toddler-appropriate YouTube videos; however, the new YouTube ToS restricted commercial use and his ability to monetize. In one fell swoop from the API provider, his entire business model and livelihood changed. Unwilling to violate the new terms, Ilan began work on a subscription model.
Says Ilan, "When publishing a public API, a company forms a relationship with
developers. To quote from the movie Love Actually - I love that word 'relationship'. Covers all manner of sin doesn't it? The relationship is by definition asymmetrical, as in me (one person) with them (the world's most powerful company). I think the API provider should be at least as honest and open as the startup. I don't know how Facebook and Twitter are with their API users, but I guess they can't be worse."
Similar to Totlol, entertainment community Redux offers a community where users aggregate niche video content from third party sites. While much of the content comes from sites like YouTube and Vimeo, Redux CEO David McIntosh has a decidedly different view of the YouTube ecosystem.
Says McIntosh, "We're committed to adhering to YouTube's Terms of Service as it exists today, and as it may change in the future. We believe that there are many awesome opportunities for 3rd parties to monetize around YouTube content in ways that are consistent with the YouTube's Terms of Service and great for users."
McIntosh plans to monetize his service via video insertions in Redux's television mode and promotional items displayed in the real-time Redux feed similar to Digg's latest ad efforts. But the question is whether or not ToS can affect these revenue streams as well.
You never believe your home is going to be damaged by an earthquake, but for some it happens. If you build on a platform you don't control, is this akin to laying your foundation on a fault line? If you've got suggestions on how to mitigate this type of risk, let us know in the comments below.
YouTube didn't respond by press time to our request for comment but we'll update this post if we get a response later.
Disclosure: RWW is sponsored by API management service Mashery.com.