3rd Party Platform Risk Destroys Businesses Overnight

Building on external platforms creates a dangerous vulnerability. When platforms change their rules, APIs, or algorithms, dependent businesses can vanish instantly.

These real cases reveal the true cost of platform dependency. Internalize this essential truth: businesses that rely on a single platform, key employee, payment processor, or any single point of failure are building on borrowed time.

Meta Erases PostMyParty With One API Decision

Meta's termination of the Facebook Groups API obliterated PostMyParty after seven years of operation.

Over 10,000 customers and millions in business value disappeared overnight. This continues Meta's pattern of API changes that regularly devastate dependent businesses.

PostMyParty had to come up with a wild alternative.

Reddit's $20 Million API Price Tag Kills Apollo

Apollo, with 1.5 million users and $500,000 annual revenue, shut down when Reddit's API pricing increase would have cost $20 million yearly-40 times its total revenue.

9 years of business ended with a single pricing change.

Shopify Policy Shift Terminates $600K Monthly Revenue Business

Checkout X built a $600,000 MRR business on Shopify's platform.

When Shopify banned public checkout apps, the entire business became nonviable instantly, despite creating significant merchant value.

Twitter's $42,000 Monthly API Fee Wipes Out Black Magic

Black Magic generated $14,000 monthly but faced extinction when Twitter implemented $42,000 monthly API fees. The founder ultimately sold the business as dozens of third-party tools vanished when this pricing eliminated an entire business ecosystem.

Facebook Algorithm Change Destroys $100M Acquisition Deal

LittleThings, on the verge of a $100 million acquisition, collapsed when a Facebook algorithm change decimated its traffic. The deal fell through, and the company closed within months-years of work eliminated by a single platform decision.

Google's Helpful Content Update Decimates Independent Publishers

Google's HCU devastated small publishers while benefiting large brands and forums.

Established SEO blogs with years of quality content saw traffic and revenue plummet overnight, forcing many out of business entirely.

Amazon Basics Program Clones Top Sellers' Products

A successful Amazon seller watched daily sales drop from $25,000 to nearly zero after Amazon launched a competing Basics version of their product.

Using seller data, Amazon identifies profitable products, launches competing versions, and captures the market.

Google Shopping Launch Eliminates $30,000 Monthly Revenue Site

A price comparison website lost 86% of its traffic and revenue when Google launched Shopping.

By entering the same business category as its search-dependent clients, Google effectively eliminated businesses that previously ranked well.

Streaming Platforms' Rule Changes Destroy $32,000 Monthly Profit Business

Sleepy Sound's $32,000 monthly profit disappeared when Spotify and iTunes changed content guidelines.

Without warning, their entire business model became invalid overnight.

Platform Dependency Is a Single Point of Failure

Building on someone else’s platform puts your business at risk of vanishing overnight. Chris Dixon explains in “Read Write Own” that platforms have no long-term incentive to let third parties thrive.

Tim Ferriss always recommends to use a backup for this very reason. He uses 2 microphones to record his podcast. He keeps toothbrushes in each of his bags. This way you don't have to worry about carrying them.

If you only have one of something, it’s either gonna break or you are gonna lose it. This is even recommended by Navy Seals.

Always have a backup.

Never make any single platform your business foundation. Use platforms for distribution while maintaining independent systems, direct customer relationships, and diverse revenue streams that can survive when-not if-platform rules change.

This principle extends to payment processors as well. Relying solely on Stripe or PayPal creates unnecessary vulnerability when hundreds of alternatives exist. Similarly, businesses building AI applications face the same risk-tethering your product to a single AI model places your entire business at the mercy of one provider's pricing, policy changes, and continued existence.

Diversify. Don’t build your sandcastle in someone else’s sandbox.

Top Tweets of the day

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Rabbit Holes

1. Noteboom LM: New Tricks by Skill Leap AI

2. How Predatory Service Businesses Steal From You by Geraint Clarke

3. I've been told that research takes up more time than actual writing - so what are some good books on copywriting research specifically? by /r/copywriting

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