Choose Your Rockets Carefully

Just over a week ago I shared my thoughts on how to grow more aggressively by latching onto rockets. I didn’t discuss the risk of the rocket knocking you off mid-ascent.

Apparently, this just happened to DataSift: Twitter announced on Friday that it’s cutting DataSift off. I’m not very familiar with the economics and relationships within the social/data/adtech world but from the few articles I read over the weekend it’s clear DataSift was counting on Twitter to be one of its rockets.

Today, Mark Suster posted a piece about a company’s ability to build its business on someone else’s platform. In it, he shares details about DataSift’s strategy and Twitter’s behavior in the partnership. Keeping in mind that this is just one side of the story, there are a few facts that are probably undisputed:

  • DataSift was making money off data that Twitter was generating.
  • Twitter was OK with this, as the partnership was not just official but also deep.
  • Twitter realized at some point during the past two years that it wants to exert more control over its data and how it’s served in aggregate to customers.

The last point stems from the fact that Twitter sees this data and its aggregation/analysis as a vital pillar of their business going forward.

So, this adds a caveat to my post from ten days ago: when latching onto a rocket, put considerable thought into the potential of that rocket seeing what you do as vital to their business. If they don’t see it as vital, they will probably not mind you making profit off their business. If they do, then you’ll either get acquired or they’ll run you over.

My partner Zak says: some relationships are like oral-sex between cannibals.

Hope things turn out better with Facebook, DataSift.

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