Feb 142012
A business captured by suppliers, customers or services is at risk

I’ve been writing a lot recently about the risks of businesses aligning their interests too closely with one or another platform, last weekend The China Law Blog discussed the opposite – being a captive customer.

The term “captive customer” is new to me but it’s a familiar concept; in the IT industry most of us found ourselves hostage to Microsoft’s whims at one time or another and it wasn’t a good place to be.

Many smaller businesses and consultants fall for the trap of having just one big customer which their income becomes dependent upon.

While Dan’s point on The China Law Blog is about manufacturing, this risk is becoming even more pressing on the web where there’s a tendency to be captured by one platform or another.

Sometimes entire industries are captured – the Search Engine Optimisation sector is wholly dependent upon whatever Google chooses to with their search algorithm. To make things worse, no SEO expert knows exactly how Google’s equations actually work.

We’re seeing the mass media being captured in a number of ways – by granting licenses to Facebook, one suspects unwittingly, or developing content for Apple’s iPad.

For startups depending upon cloud services or single payment platforms like PayPal there are serious risks as we saw with the co-ordinated takedown of Wikileaks.

In nature, the animal or plant that depends on one source of food or habitat is at risk from even small changes in their environment. Be careful you aren’t a business dodo.

  2 Responses to “On becoming a Captive Business”

  1. Paul, your comments are spot on. In my little corner of the internet I’ve noticed the same false logic being applied. Some businesses, usually very small ones, are putting all their “web presence” eggs into one basket by using a platform like Facebook without a website under their own domain name. I wrote about reliance on Facebook some months ago – Is the juggernaut Facebook all powerful?

    • Hi Chris, you’re absolutely right about the risks of using platforms like Facebook, Google+ or Blogger rather than their own sites.

      While all of those services are useful and most business should have a presence there, it’s absolutely essential they have their own domain names and site.

      Thanks for the comment.

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