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Yes, you too can be the next startup to place your complete destiny in the hands of an organization that owns the walled garden you are sharecropping, that can watch your every monetizing success, copy it without penalty at any time of their choosing and then cut you out going forward.

You better have completed your "liquidity event" before that happens.

[nostrademons]

Pretty much every startup is forced to work under those conditions. Microsoft and Apple grew up in the shadow of the IBM monopoly, and Apple was almost killed by it. PayPal was a feature of EBay's, with 90+% of their users being EBay sellers. Google and Facebook grew up under the IE monopoly - Microsoft had total control over the channel to their users. Twitter's product was copied by Facebook a couple months after it came out.

Big companies aren't in the habit of leaving virgin territory where new startups can take root, and every startup needs users.

The startups that succeed are the ones who make their userbase passionate enough to resist the initial competition from the big company who they're sharecropping on, long enough to build footholds on other competing platforms that'll give them leverage.

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The difference is that in this case Facebook controls the complete platform including access to the customers that your startup requires to survive and prosper.

Paypal had independent access to markets. It just grew fastest via eBay because it solved a problem that eBay initially could not.

Clone PC makers had independent BIOS and MS-DOS so IBM could not snuff them. It finally lost when it tried to move PC users to the PS/2 platform and customers would not follow.

Microsoft negotiated and blocked exclusive licensing and control by IBM of MS-DOS before the first IBM PC shipped.

So yes, you can succeed if you have a way out of the inherent trap of being just another sharecropper. And to do that you better have negotiated a much better deal where you have options that cannot be easily blocked that are not being offered to everyone else. But you cannot expect to win much if you accept the publicly offered terms.

Facebook's terms of use for their platform allow them to cut you off from "your passionate users" at Facebook's whim.

[veb]

A better attitude is to get in while it's good, and get out in time. This can be big profit.

I agree with what you're saying, but if you don't fool yourself into thinking you're safe, and you have a proper game plan (or simply don't invest too much!) you'll be fine. If you make money, sweet! If not, eh.