Hacker News Reader

Comment by jacquesm | Hacker News Reader

It's not a thought terminating cliche at all, it is very sound business advice and you will ignore it at your peril.

Not all that long ago I did tech dd on a company that had exactly one very large company as their main unwilling partner. They claimed that they were 'too big to fail', guess how that ended?

View on HN

Yeah, Gnip founders ignored this "very sound business advice" and raked in ~$130M.

Startups are risky, startups that are growing in the ecosystem of one large megacorp are even riskier but they are prime acquisition targets. You decrease success chance for higher yields. This is like business 101.

The advice "do not base your business model on another company" evaluates to "do not increase your risks" which would be an absolutely absurd advice.

If one qualifies the original statement with several conditions for different contexts, it may become a solid advice. As it stands this model of understanding business strategies is useless.

Super for gnip.

But basing your business model on being allowed access to other companies' data fails far more frequently than that it succeeds, and it fails far more frequently than the already pretty bad chances that you have as a start-up to begin with.

See the thread subject that you're commenting in for how Gnip's competitor fared.

Yeah sure, the countless resellers of MSFT, Oracle, IBM, VMWare, Redhat, EMC all do not understand business at all. If only some of the uptards knew how little they know, yet how much they run their mouth.

I think you're mis-understanding the issue, but that's fine.

Let me try to explain it a bit better: if you use documented interfaces and have an established supplier role with a larger company that's fine. But if you are taking data from some API and you're re-purposing that data in a way that the company supplying you with that data may not agree with then you may one day find your access terminated.

You probably should not include RedHat in a list like that.

So, "Never, ever trust another company for your business model" is in fact a thought terminating cliche?

You're stuck in a loop.

1) Make an overgenaratilzation; 2) Get called out; 3) Make a defense, only to expose your overgeneralization yourself; 4) Get called out for it; 5) ???? 6) You're stuck in a loop.

Let's get back to an earlier question to help me understand your position. The original is:

    Never, ever trust another company
    for your business model.

In this comment[0] in response to a scenario wherein one company did trust another and got screwed you said:

    What's wrong is the lack
    of contract or agreement.

If a contract or agreement is required, then that would indicate that one should, indeed, not trust another company for one's business model. So it seems that you agree with the actual statement.

Is that the case?

[0] https://news.ycombinator.com/item?id=9363982

People will take any opportunity to stop thinking:

    Most people would sooner die than
    think; in fact, they do so.
        -- Bertrand Russell

In short, if it's a "thought-terminating cliche" then the problem may not be in the way it's expressed, but in the way it's interpreted.

If someone chooses to terminate their thoughts based on something someone says, without considering why they might be saying it, and why there may be value to be extracted from it, then maybe the problem is not with the expression, but with them.

Think of it this way. You may consider it a given that there are times and places where you can and should trust other businesses. This statement about never, ever trusting a another business therefore seems to be at odds with your experience. Do you ignore it, or do you use it as an opportunity to learn why someone might say it?

But DataSift was actually buying the firehose from Twitter, and they got screwed anyway.

Which only re-inforces the statement, definitely does not detract from it. But normally speaking you write your contracts in such a way that one party can not unilaterally withdraw without serious penalties.

AFAIK the contract simply expired (I think it was 5-year old) and Twitter refused to renew it.

Those resellers are not trusting those other businesses, they have in place legally enforceable agreements. There's a difference.

I honestly don't understand the point you're trying to make, so let me parody your stance and you can explain where I'm wrong.

* I create and provide a service

* Said service has an interface

* You spot a service you can provide based on my interface

* You build a business using that interface

* You are successful

* I notice you're successful and build a clone

* I launch my clone and make the interface unavailable to you

* Lots of your customers switch to using my replacement

* You go out of business.

Is that all OK in your opinion? If not, what's wrong?

What's wrong is the lack of contract or agreement. If you jump on a business opportunity without formal contracts, it's your own fault. Generally speaking, if defense and risk mitigation is not your first thought when evaluating opportunities, you probably should stick to applying your technical skills, working for people who understand those things.

But of course, MBAs are for suckers who know nothing and should just cease to exist. At least that's what I keep hearing on HN.

So, what I hear you saying is this:

    Never, ever *trust* a company: always have
    formal contracts.  If you can't get formal
    contracts, don't work with them or rely on
    them.

That seems to match what I said, which was:

    Never, ever trust another company
    for your business model.

You seem to be saying exactly the same thing. You seem to be saying: Put formal contracts in place. If you trust someone then you don't need formal contracts. If you need formal contracts, you don't trust them.

Am I missing something?

It really does seem to me that we have pretty much exactly the same viewpoint - there is a risk analysis to be done, and risk mitigation is critical. My risk analysis says that if someone else is in a position to screw you over completely, don't proceed on blind faith. Instead, have contracts or agreements in place. In other words:

    Don't trust them.

We're back to what I originally said. Do you disagree with it? It seems like you're actually in complete agreement.

If you read carefully the discussion, you will see that my point is not that what you said is untrue. My point is that what you said is a "thought-terminating cliche". It's a over-simplified one-liner. Just look at how much had to be written in order for it to be more clear and valid. There is no trust in business relationships. How do you trust a legal entity? The people there change all the time, goals become misaligned, etc.

And if you look at the comment wherein I used that single line, I then went on to add this:

    Certainly I'd be incorporating an exit strategy,
    and my game plan would be to leverage off FB to
    start with, to grow as fast as possible, develop
    my own community and eco-system, and then be able
    to shed FB and replace it with something else.

Is that not enough of an expansion of the thought, pointing out that using FB (or whoever) is valid to start with provided you have some sort of exit strategy?

Reply on news.ycombinator.com