This has lately made me think a lot about this type of businesses where a tool is built on top of an existing platform. And I wanted to share some pros and cons I came up with:
- You have a defined market who are the users of the platform you're building on top of. In some cases, the tool is growing fast and so you're getting into a fast-growing market as well.
- In many cases, you know this defined market is already paying for a similar tool to yours (the tool you're building on top of), so they might be willing to pay for your tool as well.
- You can collaborate with the tool you're building on top of on things like marketing, affiliates, etc.
- You might be able to provide an outstanding user experience as your tool serves one specific use, for one specific customer. This also reduces the customer support needed.
- It's easy to find where the users of the tool you're building on top of hang out (their forums, separated communities, etc).
- There's always the risk that the tool you're building on top of, copies the feature your tool provides. In some cases, for example in Super's one, I think there's less risk as there're few probabilities that Notion, which is a productivity app, moves into the website builder space and starts launching the features Super has.
- The tool you're building on top of will probably not acquire your company if they are interested in having the features you provide; they'll simply copy it as they have lots of resources.
- If they remove their API or limit connection with their tool, your tool might need to be shut down.
Date: February 26