[scottrafer]

Exactly. Normal cannibalization. New businesses are built all the time by giving away what the incumbent charges for. Skype's an easy one. They don't charge all for normal calls, only for certain premiums. Innovator's Dilemma, etc., etc.

If @daltonc's app.net doesn't massively undercut FB's App Center revenue plan (or overwhelm it's distribution plan) somehow, what's the point?

[fusiongyro]

I think the point is that Twitter can't afford to remove ads or broaden their terms of use. The idea seems to be that a for-pay Twitter with broad terms of use and no ads could become a valuable development platform. The gamble is, how valuable and will people pay.

I think your cannibalization concept is brilliant, but I don't think app.net is completely vulnerable to it. Caldwell's made it clear that he's not trying to find success of Twitter and FB's magnitude, that sustainable profitability is more important for this venture than unbounded growth and huge winnings, and he's not trying to steal Twitter's customers, whatever that would mean. But unless Twitter becomes wildly profitable I don't see them giving away ad-free unrestricted API access just to eliminate a small gadfly.

I think your concept has a lot of merit, but I'm not sure it applies in this case.

[scottrafer]

I'm applying it differently, and to the business before his pivot. I'm talking about his conversation with Facebook and his accusation that Facebook was underhanded. He didn't do a proper job of disrupting FB's economics, distribution, or organizational limitations, so he's got no grounds to complain that they 'bullied' him. That should have been his expectation.

[petegrif]

Scott if I read you correctly I think this is a profound misunderstanding of how to potentially build a viable business on a platform. Let's examine two extremes.

a) dev builds software on the platform that doesn't disrupt the platforms economics, distribution, or organizational limitations. b) dev builds software on the platform that does disrupt the platforms economics, distribution, or organizational limitations.

You seem to be saying that if he had done a 'proper job' he would have pursued strategy b. But surely that is precisely the case where you can expect to be bullied. It is strategy a. where you develop software that does none of those things, but adds value to the platform by adding value to the users of the platform where you are least likely to be bullied. In these circumstances you are no threat and you are complementing the platform.

Strategy a can only be pursued when you are not dependent on the platform and hence are much harder to bully.

[fusiongyro]

In case A, what's stopping the platform from re-doing themselves whatever it is you've done?

[scottrafer]

+1 That's why Case A doesn't work for me.

[rhizome]

That should have been his expectation.

I mentioned elsewhere that, personal opinion only, of course, that this expectation is the sign of bad mindedness. Think of the logical implications of this point.

[scottrafer]

It was lazy of me to inherit Dalton's term 'bully.' It should have been his expectation to only be compensated for EVA (http://en.wikipedia.org/wiki/Economic_value_added) and not count on Facebook's stewardship of its developers.

And, when I don't like the tone of a meeting, I politely leave. Facebook's offices are physically difficult to enter, not leave.

[fusiongyro]

D'oh! :)