Rob Walling

But that switching cost is not catastrophic. And pricing in that space of sending email or even SMS, you know, I think of Twilio and, you know, the kajillion SMS APIs out there. There are a lot of replacements available. So that's going to be a much easier spot. But what if you are built on Shopify's API and you are in the Shopify app store? Is a replacement available?

But that switching cost is not catastrophic. And pricing in that space of sending email or even SMS, you know, I think of Twilio and, you know, the kajillion SMS APIs out there. There are a lot of replacements available. So that's going to be a much easier spot. But what if you are built on Shopify's API and you are in the Shopify app store? Is a replacement available?

How hard is it to switch and is it priced the same? Well, the pricing doesn't necessarily make sense in that context, but is a replacement available? How hard is it to switch? It's kind of like, no, there really isn't a replacement. And switching is basically impossible, right?

How hard is it to switch and is it priced the same? Well, the pricing doesn't necessarily make sense in that context, but is a replacement available? How hard is it to switch? It's kind of like, no, there really isn't a replacement. And switching is basically impossible, right?

Because if you were just a Shopify app and you're like, well, they kicked me out of the app store or they took my API access away. It's like, well, we can go build a BigCommerce, a Magento, a WooCommerce version, right? But it's not the same. It's not a replacement. And that's not really switching costs. That's just building, spinning up a whole new product, right?

Because if you were just a Shopify app and you're like, well, they kicked me out of the app store or they took my API access away. It's like, well, we can go build a BigCommerce, a Magento, a WooCommerce version, right? But it's not the same. It's not a replacement. And that's not really switching costs. That's just building, spinning up a whole new product, right?

So the hard to switch is just astronomical. So when we think about replacement from one to 10 or one to 100, that takes you from easy to hard, at least in my mind. So the first factor was replacement. Second one is customer concentration. And The question here is, are the majority of your customers on this platform?

So the hard to switch is just astronomical. So when we think about replacement from one to 10 or one to 100, that takes you from easy to hard, at least in my mind. So the first factor was replacement. Second one is customer concentration. And The question here is, are the majority of your customers on this platform?

Meaning that if you were kicked out or the API access were shut off or somehow the platform suddenly said, you know, you're on Twitter's API and they say, we need you to pay us $12,000 a month now to maintain it, are 80%, 90%, even 70, 60% of your customers on this platform in a way that essentially will decimate a huge amount of your revenue?

Meaning that if you were kicked out or the API access were shut off or somehow the platform suddenly said, you know, you're on Twitter's API and they say, we need you to pay us $12,000 a month now to maintain it, are 80%, 90%, even 70, 60% of your customers on this platform in a way that essentially will decimate a huge amount of your revenue?

Now, what's interesting is this is separate from the third factor, which is I'm saying lead flow or customer flow. That's on an ongoing basis receiving new customers, say, from an app store listing or a marketplace listing. And that's different. It's related, but it's different than customer concentration. Because in theory, I could go build a Twitter client.

Now, what's interesting is this is separate from the third factor, which is I'm saying lead flow or customer flow. That's on an ongoing basis receiving new customers, say, from an app store listing or a marketplace listing. And that's different. It's related, but it's different than customer concentration. Because in theory, I could go build a Twitter client.

I could be getting zero lead flow from Twitter, but 100% of my customers could be concentrated on Twitter. or on Facebook's API. You know, again, if I'm an app that, like Postpone, for example, that helps you post to Reddit, Instagram, Facebook, Twitter, and all those, Grant, he's a TinySeed founder, started Postpone, and it was just for Reddit.

I could be getting zero lead flow from Twitter, but 100% of my customers could be concentrated on Twitter. or on Facebook's API. You know, again, if I'm an app that, like Postpone, for example, that helps you post to Reddit, Instagram, Facebook, Twitter, and all those, Grant, he's a TinySeed founder, started Postpone, and it was just for Reddit.

And so when we funded him, we said, your customer concentration is basically 100% Reddit. We think you should diversify into other platforms, and he was already on board with that. So now he has a little more diversity, you know, across the different platforms. Now, Great example with Postpone. Does Postpone receive any lead flow from being in a Reddit app marketplace? No.

And so when we funded him, we said, your customer concentration is basically 100% Reddit. We think you should diversify into other platforms, and he was already on board with that. So now he has a little more diversity, you know, across the different platforms. Now, Great example with Postpone. Does Postpone receive any lead flow from being in a Reddit app marketplace? No.

So you can have concentration and you can have the risk of that concentration without the lead flow and you can have the lead flow. I guess in theory you could have, let's say I was on four platforms. I was like Shopify, BigCommerce, WooCommerce, and Magento. And I had, you know, 90% of my customers on Shopify and, you know, only 10% across the other three.

So you can have concentration and you can have the risk of that concentration without the lead flow and you can have the lead flow. I guess in theory you could have, let's say I was on four platforms. I was like Shopify, BigCommerce, WooCommerce, and Magento. And I had, you know, 90% of my customers on Shopify and, you know, only 10% across the other three.

But let's say the other three were sending me a lot of leads because I just branched into them. And usually this is not the case. Usually actually branching into other platforms is a lot harder than you think. We've seen tiny, I've seen tiny seed companies and non-tiny seed companies try to do it. And It can work, but in the majority of cases I've seen, it hasn't worked.

But let's say the other three were sending me a lot of leads because I just branched into them. And usually this is not the case. Usually actually branching into other platforms is a lot harder than you think. We've seen tiny, I've seen tiny seed companies and non-tiny seed companies try to do it. And It can work, but in the majority of cases I've seen, it hasn't worked.