What you build your business on doesn’t limit how big it can grow.
(a 🧵 on this mental model)
1/ Can an app built on top of Facebook become bigger than Facebook itself?
It’s easy to believe that you will get limited by how big is the businesses on which your business is built. But that’s not true.
2/ An app built on top of Facebook can become bigger than Facebook because the customers and desires that Facebook serves are very different than customers and desires that the business that’s built on Facebook is trying to serve.
3/ Facebook, in this case, is simply an enabling platform while the real value to the customer is being created by the app.
It’s CRM for physicians and general practitioners in the medical industry.
5/ Their offering is completely built on Salesforce but because their target customer and use case is different from Salesforce, they’ve managed to build a substantially sized business ($1.4bn revenue) which is a significant percent of Salesforce’s own size ($16Bn revenue).
6/ Stack fallacy is when you believe that it’s easy to replicate another business built on top of your business.
7/ This line of thinking jeopardizes genuine, growth-generating partnerships as you end up sending a signal in the market that you’ll compete with your own customers or partners.
8/ Remember when Google launched its own social network to compete with Facebook on Android and on the web.
Or when Apple launched its own maps to compete with Google Maps on iPhone?
9/ The relatively low adoption of such products is a powerful lesson that reminds us that different layers of the stack are relatively independent of each other and that success of a business depends on the market and competitive scenario within a particular level of the stack
10/ 🧠
Remember: how big your business can grow mostly depends on your customers, and not on your vendors.
Hinting at the perceived sluggish rate of innovation in recent decades, Peter Thiel famously said that “we were promised 🚀 flying cars and all we got is 140 characters”.
But is it true?
In my next podcast, I pick @ArtirKel's brain on whether progress is slowing down.
Check out the full podcast here:
(Or search for "Bold Conjectures" in your podcast app)
@ArtirKel is an independent researcher who likes to get into details of things.
On his blog nintil.com, among a wide range of topics, he writes about how science is done, advances in human longevity research, economics and innovation.
In the episode of my 🎙️ podcast, I and @Philip_Goff explore the absolutely crazy but increasingly popular view that everything in our universe is conscious (panpsychism).
If you have an hour to spare this weekend, listen to the podcast below.