Wednesday, April 14, 2010

Simple twist of fate

Coming back to the platform/application debates swirling around Twitter et al, I recall the old rhetorical question which my ex-partner Yuval Rakavy used to cite: what differentiates a smart person from a wise one?

The simple answer is that the smart person knows how to get out of the problem that the wise person would never get into.

When entreprenurs build a company that, by definition, has a single point of failure, they are vulnerable to a litany of potential catastrophic events. They may be regulatory, a systemic vertical industry failure, or a competitive blow. In the mobile space, the Telecom players were notorious single points of failure, and wiped out billions of dollars of capital exercising their prerogatives over a decade, blocking innovation.

Today, entrepreneurs and investors have much to gain, and lose with involvement with Apple, Facebook, Microsoft, et al. It's really imperative that they plan for the single point of failure to actually fail. If no fall-back exists, be prepared to have a war story of how great things were going, until....

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