henry copeland: The risk of building your biz on Facebook's shifting sands: pllqt.it/HGOOmh
The most obvious lesson to come out of Viddy may be to raise capital prudently. More valuable, however, is to recognize Viddy as a clear example of the risks of relying on another company’s platform as your primary user acquisition channel. Viddy’s meteoric rise to its one-time-high of more than 30 million monthly active users was fueled almost entirely by Facebook. And when the social network tweaked its News Feed algorithms and pulled the plug on this free traffic bonanza, it took down Viddy along with dozens of other companies. Sure it was out of Viddy’s control, but it was also part of a larger pattern of behavior within Facebook that should have had all platform partners on red alert. It’s fine to gobble up all the free traffic and virality that you can grab, but it’s another thing to take on a $370 million valuation and turn down marquee acquirers based on that alone.
- pando.com