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TweepML Shows Risks of a Twitter-based Startup

It sounded like a great idea when TweepML launched last September: an easy way to manage lists of Twitter users, including sharing them with others, allowing anyone to follow all the users on the list with a single click. Unfortunately, it was such a good idea that Twitter launched something almost identical a month or so later, and TweepML founder Marcelo Calbucci has now put the company up for sale on the Flippa auction site. You can put in a bid for the company, or you can buy it right now for $79,000 and get all the code, accumulated data and any associated domains.

Calbucci, who started TweepML after his previous startup shut down, has written about the sale of his company on his blog. He says the service quickly attracted more than 100,000 users — and maintains that it continued to grow even after the launch of Twitter lists — but says he doesn’t have enough time to devote to growing or monetizing the service.

If nothing else, the demise of TweepML is a warning sign for other entrepreneurs building their startup on someone else’s platform, whether it’s Twitter or Facebook. The benefit is that you can get to scale quickly by hitching a ride on someone else’s wagon, and there’s even a chance that they will acquire you if they see your service as useful enough and can’t be bothered to build one themselves. But the risk is just as great that they will either a) launch something identical to your service, or b) change their service just enough to render yours either inoperable or unnecessary.

A panel of venture investors, including Josh Hannah of Matrix Partners, discussed these risks at the AlwaysOn Stanford Summit last year. Hannah said that he was “leery about companies dependent on the Facebook platform” because they “don’t have control of [their] destiny.” Entrepreneur and venture investor Alexander Muse has written about these risks as well, both in terms of Facebook and in terms of Twitter. The issue of control has led some to speculate about the low prices that Facebook-based businesses such as iLike have attracted when being acquired.

In an email, Calbucci said that while TweepML was “mildly affected by changes on Twitter,” he doesn’t regret building a business based around Twitter because doing so “provided a viral distribution mechanism that I could not have created on my own.” He added that the service is somewhere between “an end-application and a powerful network infrastructure, except that it has 100% control over that infrastructure.” And that last point is the important one for startups — are you prepared to build a business that depends entirely on someone else’s infrastructure?

Post and thumbnail photos courtesy of Flickr user JP Chamberland

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7 Responses to “TweepML Shows Risks of a Twitter-based Startup”

  1. It sounded like a great idea? To who? It’s an awful idea. It encourages almost blind following, and it’s even more unsustainable and unreliable as a source than Twitter itself.

  2. This is a no brainer really… all of these 3rd party applications are building Twitter’s business model for them.

    Why would anyone at Twitter need a business model? I mean really,just let thousands of entrepreneurs create services off of data/APIs they do not have any rights to, then either restrict access and negotiate terms, or simply offer a more robust feature to say… 50 million+ of the users you have unfettered access to.

    Any developer should really think about this. iPhone/Facebook/Twitter etc have the ability to approve/disapprove anything they want to.

  3. Wait a minute! Isn’t this the era of the <$50K startup?! If so, then this guy is still going to make money if he sells at $79K. If you lower the barrier to entry for startups (which has been the dominant trend for the last five years), then they essentially become disposable. You don’t need strategy, business plans or experience…just throw it up and see what sticks. If you get hip-checked by a larger company…no big deal! You’ve probably got 9 other ideas running on the same server!

  4. I think startups should be carefully with being “Twitter”, “Facebook” or “Linkedin” based. Sheldon Adelson (the Las Vegas Sands guy) said he got in trouble once because a business of his had only one client.
    Isn’t that kind of the same idea here?