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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