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Fred Wilson to devs: Expect platform owners to work against you

Developers building atop platforms like iOS(s aapl) and Twitter should go in with eyes wide open, said Union Square Ventures partner Fred Wilson, who reminded entrepreneurs about the dangers of relying on someone else’s APIs. In a talk last night before an audience of entrepreneurs, Wilson said developers need to plan for the day when platform owners work against their interests.

“You should expect that the platform you’re building on top of to do something that’s not in your interest,” Wilson said. “If you’re going to stay on top of that platform forever you might wake up one day to find that the owner of the platform is competing with you and that sucks.”

The lesson is especially timely now with recent news that Twitter launched its own photo service after discouraging developers from launching more client applications. And yesterday, Apple rolled out a slew of improvements to iOS that had the potential to impact a number of existing third party applications, from group messaging and notification apps to reading, photo, note-taking and cloud storage applications.

Wilson said building on someone else’s platform can be helpful in gathering an audience or moving into a market quickly while eventually migrating the user relationship off the platform. But developers shouldn’t be naive about what the platform owners may end up doing over time, he said. When asked about the impact of the then just announced iOS iMessage app on third-party messaging app Kik, which Union Square Ventures invested in, Wilson said Kik should be fine because it’s a cross-platform service. That suggests that developers, at the very least, should hedge their bets by focusing on multiple platforms so they’re not caught flat footed by changes in one ecosystem. Kik is also a good object lesson for developers because it was pulled by RIM(s rimm) for allegedly breaching a contract agreement.

Now, developers shouldn’t necessarily assume the absolute worst of their platform owners. If they did, very few mobile apps would ever get built. And as I discussed yesterday, many app developers on iOS still feel like there’s plenty of opportunity to differentiate and go deeper than what Apple is offering. Twitter has also suggested new areas where developers can focus their energies.

But a larger lesson holds true for developers: Sleeping with one eye open is not a bad idea. Chris Dixon, founder of Hunch and an investor with Founder Collective told the audience that platform holders generally focus on building out their core infrastructure before looking to subsume apps that they think are useful. The desire to take on other third-party apps becomes even more tempting for companies that are still working out their revenue models, said Dixon.

“It’s much safer to build on top of platforms with existing business models,” he said.

We’ve talked before about the dangers about building on other platforms, especially recently in the case of Twitter. It’s probably not surprising that Wilson, a Twitter investor, would provide another warning for developers. He said over a year ago that Twitter developers should focus less on filling holes and work on new opportunities.

Platform owners carry their own risks competing with their own developer community. A lot of a company’s success can come down to how much developer support it can gather around it. Competing too much with your own developers can hurt some of the good will that helped build their original success.

But ultimately, the platform holders are the ones with the ball and they decide how the game is played. They’re not going to pick up their ball and go home. But they will look for opportunities to make the game play in their favor. Smart developers know this already but it bears repeating in light of the number of companies building their businesses on the backs of other companies.

7 Responses to “Fred Wilson to devs: Expect platform owners to work against you”

  1. Mario

    This is nothing new to the people that have been in the industry longer than 10 years.

    I would question the sanity of anyone that is building the software for a closed platform in this day and age, when there is ultimate open platform – the Web, where you get all kinds of freedoms and choices from what kind of OS you want to run in production to what you want to develop on, to what tools/languages you want to develop in etc.

    The web is what enabled companies like Google and Amazon to work around the Microsoft monopoly and make them completely irrelevant to what they are doing.

    As for companies like Kik, I find it really surprising that anyone invested money into a startup that is doing a “me too” product. There are literally dozens of established messaging provides out there from completely free and open to paid for ones. Besides, Kik “technology” is based on a fork of open source messaging server, so they really don’t even innovate in this space in any way (from technology point of view messaging/chat was a solved problem about 15 years ago). As we all know the value of messaging platform is in the sheer number of users and once platform provider ensures everyone has it on their device, it’s game over for others.

    If you are going to pour money into something, at least do it for someone that is actually innovating in some niche that is not yet a solved problem, or into a new platform…

    • Jim Turner

      I would not feel fine with an 8 million dollar investment and ‘cross platform’ capabilities between iPhone and Android only, which makes it ‘fine’ according to Fred. Whatsapp has a much larger position in the cross platform messaging space than anyone.

      The only way Kik will be successful is if RIM buys them. I could totally see Apple not approving RIM’s iOS application. So Kik could be there link to iOS users.

      I expect a large number of Blackberry users to abandon BBM/RIM this fall. More and more corporations are adding or switching to iPhones.

  2. I presume Fred feels this way about android too – In fact, it may be worse, the dev is at the mercy of Google, the manufacturers, and the carriers. Any one of the three can disrupt their well laid plans.

  3. I would suggest that developers build up their own IP to prevent (or at least profit from) assimilation by platform owners. However, Fred doesn’t seem a big fan of patents so it might not go down too well.

    Doesn’t matter you can always be first to market…oh.