Platform risk is when another company controls your destiny.
This week there was a big scare with Twitter's enforcement of a policy they claim had been around for a while.
The relevant part:
In fact, Twitter previously changed its developer policies in 2021 to remove a section that discouraged — but didn't prohibit — app makers from "replicating" its core service.
With micro acquisitions, many of the available products for sale have some level of platform risk. They might be:
- sold through an app store (slack, apple, shopify)
- depend on 3rd party apis
- hack their way around another product to get data
On the one hand, they're great little products because you have some level of built in distribution. On the other hand, it's tough to get a good night's sleep because you might wake up one day to a notice from Twitter saying they've pulled your access and your product goes to zero literally over night.
Our portfolio has massive platform risk:
- Cold DM - Twitter - Thought this was dead when reading that article
- Super Send - Twitter + Linkedin + Google (gmail).
- Inlytics - Linkedin
- Sheet Best - Google
Sometimes there's a way to diversify. You can be X for Shopify stores and then branch out to other e-comm stores. You can have a wordpress plugin and sometimes also create value as a chrome
But at the same time, these product all would either not exist or not be as useful as they are with the platform risk. It's a delicate dance. Playing in the micro SaaS space means getting comfortable with platform risk.