Monday, October 12, 2009

Competiting With Twitter? Lessons From ABC's Shark Tank

Image representing Twitter as depicted in Crun...Image via CrunchBase
I am a big fan of ABC's television show "Shark Tank." Over the past few months I have learned how investors look at business opportunities. No, this does not make me an expert, but it got me thinking about this latest rumor concerning Twitter. According to an article on Mashable, Twitter was supposedly thinking about hosting video, similar to other services found online.

In other news, Twitter has plans to release a list (group) function to its web and API. When I first heard the news, I said, "It's about time." Truly, Twitter has got to get on the ball and own the retweet and group functions, but they ultimately hold control over it all.

Think about it. Every time Twitter releases a new feature, it has the potential to take market share away from other solutions. If, for example, company A has built its business on providing video hosting for Twitter, what do you think happens when Twitter makes its own solution? Unless company A has something else in its arsenal, that new Twitter upgrade can serve a devastating blow to its competition.

Returning to my Shark Tank lessons, I recall someone asking a business owner if the idea/product was trademarked. What happens if a major competitor decides to do the same thing, what happens to your company?

So, I ask the question, is it wise for companies to base so much of their business on the decisions of another? We have already seen how a change in Twitter's API can affect applications like Jesse Stay's SocialToo.com. Without an original product or control over future changes, are developers just creating Twitter tools for fun or future success?

I would love to hear your thoughts.

Until next time...

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Damond L. Nollan, M.B.A.

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