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Comment by belorn | Hacker News Reader

If you rely on a 3rd party for your business, then the 3rd party is in control of your company future.

In that regard, its not about risk. Yes, using 3rd party API for your business model is risky, but thats a secondary effect. The major issue is than the future of the company, and any promises and investments done is completely dependent on that third-partys' whims. To some degree, your even in less control than if you were employed for the 3rd party company, as there are employment laws to protect employees, but no laws in place to protect you against changes by the 3rd party to the API.

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I just started reading "the signal and the noise" [0], and he talks about the difference between "risk" and "uncertainty": "Risk" is a known factor, something you can calculate with. Something might be risky (50% chance of failure) but at least you can calculate and reason about it. "Uncertainty" is "worse" because you can't easily reason about it. We often assign numbers to uncertain events anyway, but they might be off by several orders of magnitude.

He goes on to say something like: Risk fuels capitalism and the marked, uncertainty grinds it to a halt

[0] http://en.wikipedia.org/wiki/Nate_Silver#Book

Edit: I forgot to tie this in to what we where talking about :) As I see it, relying on someone else (with out any guarantees) is not just risky but uncertain. You can't really know how likely it is that they will change down the road. Doesn't mean it can't work out though..

Found a blog-post with that quote in its context:

http://unreasonable.is/opinion/entrepreneurs-are-scientists/ https://news.ycombinator.com/item?id=5042525

It's not the fact that you are using 3rd party APIs. There are plenty of legacy companies that created products based on 3rd party APIs from Microsoft, Oracle, Sun, etc, that did perfectly fine. Microsoft in particular is extremely professional and will bend over backwards to ensure backwards compatibility. You can still install many 20-year old programs on Windows 7 and they will run perfectly.

As I mention in my post, the issue is that these Web 2.0 companies don't offer support contracts, and don't have a formalized API that guarantee backwards compatibility. THAT is the problem. We ALWAYS bought a support contract whenever we integrated with an API. The support contract gave us some legal rights, but these days there are no such legal rights, and that is what is really risky.

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