It can still be a great business strategy, as long as you're aware of exactly the points you outlined. You just can't run a normal startup strategy of subsidized growth, instead you have to rush through the product lifecycle towards cash cow status and make hay while the sun is shining. Once $bigcorp kills your business by implementing their backlog you pivot to something else, with the advantage of already having a huge database of people willing to pay extra for such features.

It's rarely the case that there's only room for one player in a given market. Market segmentation is a real thing, for good reasons. If $BIGCO pivots to producing a product similar to yours, that doesn't have to mean "the end". I'd suggest everybody read The Discipline of Market Leaders for more on how to choose among different strategies and position yourself vis-a-vis competitors.

Of course the problem of fundamentally building on someone else's platform remains. This is why it's a good idea to start at least thinking about how to move your business onto another platform, from day zero. Of course there's a balance between investing time and money in building abstraction layers and evaluating other platforms and doing these different things, versus spending that time and money on immediate growth. But if one invests literally 0 in this situation, they can hardly expect much sympathy if the underlying platform gets yanked out from underneath them and kills their business.

I wouldn’t call it a “great” business strategy if your shelf life is limited.

We have a finite amount of life energy to put into our businesses and I’d prefer to give it to something that can generate an annuity.

Financial technology has you covered: spend your finite life energy providing the feature until the bigco implements it themselves, then buy an annuity with the profits you made in the meantime.

Almost all businesses have a limited shelf life and/or a business cycle of growth and decline. The scale is just different.

Does Exxon stop drilling for oil just because it won’t be possible someday?

I mean, the fact that this guy was making $7.2MM a year in revenue from his software seems relevant.

Quantity has a quality all its own.

Heh, deep company backlogs are a great place to mine for startup ideas.

> Then, out of nowhere, they just implemented it themselves!

I'm understanding the timeline and details, it isn't that Shopify came out with a better solution which lost them customers. Shopify banned them from adding any new customers and at some point later Shopify delivered something that replicated some of their features.

After reading the article, I think the turning point was when Terms of Service were unilaterally changed to forbid selling his service to new customers. If he'd been permitted to keep selling to new customers, he'd have been able to continue.

Would a good analogy would be Apple banning other web browsers on iPhone, because they are an important part of the iPhone experience?

His conclusion was that this was a limited time opportunity, which he profited from and it has come to an end.

Apple bans other browser engines because can they run arbitrary code, which is not allowed per the store rules. They are fine with other browsers on top of WebKit.

Banning other browsers with extra steps.

They could just said that they do it for the safety of children and some would believe it.

>> "...but this just seems really shortsighted."

This guy made literally (tens of?) millions of dollars in revenue from his software. Sure the gravy train stopped, but man I hope to be shortsighted like that someday.

> This guy made literally (tens of?) millions of dollars in revenue from his software

While living in Bulgaria

And so what? That's still a lot. Who's making that mind of money there? He even started investing in smaller businesses.

I think you’re misunderstanding.

That’s a staggering amount of money in this context.