Platform Risk and Building on Borrowed Land

Platform risk, also known as building your house on borrowed land, is a major concern when it comes to business. It refers to the danger of relying on an existing platform to leverage its services or users. Building on borrowed land can lead to an existential threat if the platform makes changes or goes in a different direction. For example, a coaching client experienced a significant decrease in revenue when a popular business platform redesigned their marketplace page, causing collateral damage. Another example involves Shopify, where a developer saw their app business shut down due to a major change in Shopify's checkout process. This highlights the risks faced when building on someone else's land, as larger companies might take notice and create their own versions, putting smaller businesses at a disadvantage. The podcast emphasizes the need to minimize risk by diversifying across platforms, owning your own audience through email lists or websites, and creating contingencies in case of platform changes or shutdowns.