Business, Featured - Written by Denis Hancock on Wednesday, August 27, 2008 13:51 - 9 Comments
Ning vs. WidgetLaboratory and the challenges underlying ‘open’ platforms
The combination of Ning and WidgetLaboratory (WL) was a story that had wikinomics written all over it. The former is a platform that enables anyone to create their own social networks focused on anything they want, and they actively encouraged individuals and companies to innovate on top of the platform and make it even better. WL did just that, and in a big way – they sold a number of widgets (for around $30 / month) tied to the Ning platform, supporting somewhere in the range of 2,000 networks and 1,000,000 individuals. WL was the most popular widget creator on the platform.
If I was writing this post a week ago, it probably would have been a feel good story about wikinomics, but the wheels have recently fallen off the proverbial bus. This is a development equally worthy of exploring in relation to the challenges that come with embracing wikinomics principles – and particularly those that emerge when you only embrace a few of them. Of greatest interest to me – if more stories keep popping up like this, it could be a dramatic blow to more open, collaborative innovation processes. That would be a shame.
TechCrunch picked up the story on August 22nd, when Ning suddenly removed all of the WL widgets, without warning to anyone, from their network. This decision which clearly angered the company, as well as the thousands of customers who had spent time and money with WL in order to optimize their offerings. Based on the emails that WL has published on the web, this is the gist of Ning’s complaint:
Over the past few months, WidgetLaboratory’s applications have caused multiple and significant technical degradations to the Ning Platform. In point of fact, your code has broken numerous times and has negatively affected a large number of Networks in addition to the Ning Platform.
This sounds fair enough – having a single company break the platform repeatedly would seem to be a problem. However, WL vehemently disagrees with this assessment. If you read through the emails they point the finger for whatever platform problems exist squarely at Ning (particularly highlighting when Ning implemented Dojo changes that broke many applications without bothering to inform any of their partner developers in advance). They also indicate the shutdown may be more about anti-competitive behavior (a.k.a. they’re making too much money and Ning wants it, and/or Ning is worried they’ll lose customers and revenue going forward). From their POV, this was a win-win-win relationship, and they don’t understand why Ning would do this unless there were ulterior motives.
What’s the truth? it’s hard to say without knowing EVERYTHING that’s gone on, but it’s even harder to say Ning has went about anything in the right way. If you work through the email train, there is an ongoing (if occasionally heated) dialog through to August 7th between Spencer Forman at WL and CEO Gina Bianchini of Ning, at which point she indicates the communication will be handed off to Jay for technical issues, Bob Goorah (general counsel) for the terms of service, and Jason Rosenthal for business conversations (who was starting on the 15th). The next email in the chain is this:
I am writing to inform you that your network (widgetlaboratory.ning.com) and third party applications have been removed for violations of our Terms of Service. Please direct all correspondence regarding this matter to my attention. Thank you.
So much for business and technical I guess – only the lawyer now, and there appears to be no interest in finding an amicable solution. WL, as noted, has posted the email correspondence on the web. Ning’s initial public response, in contrast, was this:
This morning we removed WidgetLaboratory, a third party application developer, from the Ning Platform for violating Ning’s Terms of Service. WidgetLaboratory provided independently developed applications that could be added to a social network on the Ning Platform by a Network Creator. While we try to be as transparent as possible, it’s our long standing policy not to comment on specific cases where we remove networks or third party developers from the Ning Platform so we will not be providing any additional details publicly.
You have to love that – we try to be as transparent as possible… but we’re not going to tell you anything. How transparent. Lawyer Bob continued to respond to several emails from Spencer, and helpfully reminded him of the terms of service:
Ning has the right (at its sole discretion) to delete or deactivate your account, block your email or IP address, or otherwise terminate your access to or use of the Ning Platform or any Network, or remove and discard any Code or Content within any Network, without notice and for any reason.
While legally this is very clear, one has to imagine that setting a precedent of unilaterally shutting down the most successful widget provider on the platform might not be good for encouraging other developers, or encouraging customers to pay for premium services that could/ will quickly be axed. If you read through the responses on various blog posts (including this one on the Ning developer platform), you see this come up repeatedly – and you notice that most seem to be on WL’s side.
Gina later posted a more thorough response which has some more positive responses – though it’s interesting to note many users seemed to be asking for Ning to offer them the applications that WL used to offer them, which is a very slippery slope indeed. It’s even more slippery when Gina notes that:
Our focus at this point is in assisting Network Creators in finding alternatives to features that they may have been using from WidgetLaboratory. If we could fill these holes today, we would. We will start this effort shortly.
There’s no way around it – this looks really bad. It’s bad to have a model where 3rd party players are encouraged to get involved, grow a business with valuable offerings they develop and prove, and then get shut down while the “parent” company and customers clamor over replacements for them. Not sure how that can be sugarcoated.
There’s also another wrinkle in this – if you check out the August 7th email, you’ll note that one of Ning’s other complaints is that WL sometimes asks for user names and passwords, which is also against the terms of service. WL points out that they do this as a service for paying customers, who WANT to provide it to them, so they can go in there and… diagnose and trouble shoot problems with their licensed and purchased products. That seems perfectly sensible, and again to everyone’s benefit – but apparently Ning does not agree. Even while complaining that WL code regularly breaks down and hurts the network. Curious.
So overall there are a lot of disconnects here, and as more information comes out it might clear up – but I doubt it. I think it’s fair to say at this point that if you want to learn how to deal with such “open” development platforms and partnerships, do pretty much the opposite of what Ning did. Even if they had to shut down WL, they could have went about it in a far better way. Secondly, saying that you try to be transparent, and then sharing nothing, is dumb. Finally, if it’s the innovation of 3rd party developers that is helping your company so much, you really have to think about what the long-term implications are when you unilaterally axe your top performer and then very shortly after that talk about replacing their offerings being your top priority.
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