Consider the situation where your life support is your biggest enemy. That’s a graphical way to put the dynamics of the technology industry in many cases. There are several companies out there that leverage their biggest competitor to survive. For example look at companies like Wikia and Mahalo– the human-powered search engines gaining popularity on the Internet. How do people reach these sites today? The entrepreneurs behind these efforts confess that 90% of their traffic is directed through Google. How do they make money? They use Google’s ad sense to show advertisements along side their search results. Who is their biggest competitor? Well, of course, Google. So this popular search engine company Google is both their biggest competitor and currently the sole source of survival.
Similar situation arises when a company builds a platform. Success of the platform is measured on the basis of number of applications that are built on top of it. Most of the times, the companies that build the platform also makes applications on that platform, hence competing with other application makers. Hundreds of Internet application making start-up companies survive on the Facebook platform. At the same time, they compete with Facebook for the time people spend on the Internet and hence for the advertisement dollars. Another example that cannot be ignored here is Microsoft. Thousands of companies depend on the Microsoft Windows platform for their survival and hundreds of them compete with Microsoft on the applications front.
This dynamic in the technology industry teaches us one very important lesson. You got to continuously try expanding your customer base without any reservations by utilizing every resource in the best possible way. The point is to stay focused on the end goal, doesn’t matter if in that quest, sometimes you end up depending on the company that might be your worst nightmare.
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