Mistakes of Failed Startups. Singlestat.us failed, not because of a weak product but a unfortunate reliance on Myspace, then-dominant social network.
Startups don’t take too long to kick off. It all starts with a small but promising idea and if that idea emanates from the brain of a coder then it’s very likely that an early build of the eventual web product may get ready in a matter of few days or couple of weeks.
While many web startups have a unique purpose behind them and do not relate or rely on any other existent web service in any way, many others choose to build a web application that largely depends on some existing popular web service.
The latter types generally make use of available APIs provided by popular web services for fetching user data. This kind of model has been made popular, largely by Twitter and Facebook in recent years. In fact, Twitter and Facebook were among the first web companies that became hugely popular with the proliferation and support of developer community and gazillion applications that got developed around these web companies.
While web companies such as Twitter and Facebook appreciate developers to build apps around their services, there could be a possibility that a large web company may have a problem with third party developers using their data for feeding into some sort of external application.
It was an interesting web service, started by David Weekly, back in 2006. It had one simple purpose behind its existence: To send you an alert, if and when any of your friend breaks up with his or her beloved and acknowledges the same by changing his or her relationship status on Myspace.
Soon after the service went live, it had a thunderous start and got a lot of users excited to use it in first few weeks itself. And not so soon, Myspace stepped in and sent a Cease and Desist letter to David Weekly, asking him to shut down operations of this fast-growing web service.
SingleStat.us, according to Myspace, was constantly sending far too many data requests to Myspace, eventually putting undue load on Myspace servers and consequently troubling normal operations of the then-popular Social network. According to Myspace, this was in violation with some TOS of Myspace.
So a nice idea, which was getting popular by each passing day, died prematurely, merely after few weeks of its existence, for a (ridiculous)reason that many startup folks many not even care to ponder about.
What to learn from ‘SingleStat.us Debacle’
If you have a business idea and that idea heavily rests on the data feeds from an existing web company(considerably bigger!), you must ensure, before starting to work on the idea and investing your time and efforts in it, that you’re not going to get a thumbs down from the very company that you’re heavily relying on, for data feeds or anything else.
In some cases, It may be possible that even when you’re actually NOT violating TOS of a particular web company, you may still receive service take-down threats from the web company that you’re requesting data from. In such a case, you may not be able to do anything as you can’t lock horns with the very company that feeds you the data to run your app. Also, you just can’t afford to challenge their claim with a counter-lawsuit, as you don’t have the funds to go that way.
So the best thing in such a scenario is either not rely too much on data from an existing web company and if you do need to do so then better try seeking a formal agreement with the company you’re going to be relying on, before putting up your resources onto building such a web service.