How VC Funding Can Kill Innovation

A few days ago, I published a blog post about my views on the future of the open internet. The post mostly focused around Twitter which went from being a very open platform to becoming a very centralized platform completely killing 3rd party apps that it stole innovation from. I believe all these decisions were financial and were driven by pressure from the investors.

Twitter & 3rd Party Apps

A lot of features that we see today on Twitter were actually originally developed and created by 3rd party apps. In fact, the first twitter client for both Mac & iPhone were developed by 3rd parties. Some of the clients got acquired by Twitter including TweetDeck & Tweetie. TweetDeck’s support was killed from all platforms except for Mac. Thousands of other apps were ruthlessly killed by discontinuing API supports.

Financial Decisions

Twitter said the decisions were made to discontinue support for “legacy APIs” at the same time acknowledging that no new APIs will be created. In my opinion, the decision was a financial one, and largely driven by what the investors wanted off Twitter.

Fred Wilson, a VC who invested early-stage in Twitter said in a blog post he wrote in 2016

In the early days of Twitter, there were third party applications (Summize for Search, Tweetie for iOS client, etc). These were all built on Twitter’s API. If Twitter had imagined itself as a protocol instead of an application, these third party applications would not have had to compete with (or get bought by) Twitter. But at the time, there wasn’t an obvious way for Twitter’s founders and management team to benefit from a protocol-based business model.

Fred Wilson

Posterous & Twitter

But the damage wasn’t limited to Twitter clients. Twitter acquired and closed other services too.

Posterous was an ultra-simple blogging platform with focus on social media integration and ultra-easy mobile blogging using emails with support for many forms of media.

Posterous grew at a very fast rate and had over 15 million users by 2012. They ran a wide-spread campaign asking users from smaller or dying platforms to import their blogs to this new dead-simple platform. Anyone who did that most likely regretted that decision as Twitter acquired Posterous in May 2012 only to shutdown the blogging platform, and all blogs hosted on it in the next 6 weeks.

All for financial reasons.

It’s Not Twitter

I don’t hate Twitter. I love it. But everything that Twitter has done was done in the financial interest. And somehow I don’t think it is what Jack wanted off Twitter. If he did, he would have had built Twitter like this from ground-up. But he didn’t. Because he had different plans for Twitter. Plans that obviously changed as financial concerns got in to the picture.

And it isn’t Twitter alone. I only expressed my thoughts with reference to Twitter in continuity of my original post about the open internet, which was also written with Twitter in mind.

All large tech companies have killed platforms and services, acquiring only to shutdown, for financial gains.

And while it looks sexy to say that we’re trying to change the world, with decisions like these we’re actually just trying to change our own lives and those of our investors’. As killing innovation isn’t how you change the world.

Internet Is Centralized & Contaminated

I love internet. I have always loved it and I’ve always thought of it as a friend of a common man. It is an equalizer for sure. It makes the boundaries thinner, reduces some of those “visa restrictions” we have to participate in a global world. But internet is still far from perfect. And that’s okay. But I feel it’s also not moving in the right direction. And that isn’t okay.

Internet was meant to be decentralized. It put the power in everyone’s hands. Until we started to see a few corporations taking more and more control making it centralized again.

As a marketer, I was always told by other better marketers that email lock-in with your customer is everything. I was told that Facebook will lure you into buying likes and then change algorithms. Twitter will do the same and Google will mess with your SERPs too. But email is forever. You reach out to your users on 1-1 basis with nothing between you and your users.

Unfortunately, with Gmail powering roughly 50% of all email addresses in the world, that is changing too. Emails are now controlled the same way Facebook controls your pages, and Google controls your SERPs.

Gmail categorizing emails as Primary, Social, Promotions & Updates reducing distribution, readership and snoozing notifications.

Think of it like this; email address is no different than your physical address. Imagine if the post office decided for you which mail should reach you, and which should they keep. It’s messed up, isn’t it? I think it is. And I’m against centralized control like that, especially on lower level protocols.

Other email providers are also categorizing emails, snoozing notifications and reducing readership in the similar manner as Google.

From the user’s point of view, may be it helps reduce the noise. But as a business owner, the inability to communicate 1-1 with the customers, who opt in for this communication, is not just unfortunate, its unethical on Google’s part.