Managing Risk

I’ve spent a massive amount of my time while running Infinity Softworks managing risk. In this case I’m talking about business and technical risk. When do I count revenues? How reliant am I on a partner? How reliant am I on a technology sticking around?

Sometimes I’ve been good at this. I’m conservative about deals, for instance, never adding cash expectations to my budget until the contracts are signed. Sometimes I’ve been bad at this. We were extremely reliant on Palm in 2004 and didn’t even understand how reliant we were. When the relationship failed 70% of our revenue disappeared at the same time.

Yesterday App.net announced that renewals didn’t meet expectations and that the product would continue but that the team developing it would no longer be full-time. Development would be open sourced.

This doesn’t bode well for those that rely on ADN for log in and syncing services, the developer back-ends. If I did, I would be looking for an alternative right now. In managing a business it seems that I am always surrounded by risk. My goal is to minimize it as much as possible where possible.

This is one of the reasons we don’t do log ins with Facebook or Twitter or Google. This is one of the reasons we prefer to manage our own servers. This is one of the reasons we have multiple revenue sources. As I was planning Equals one of the things I thought about was all of these risks. It is one of the reasons we chose to develop the web version first and mobile-specific versions later. Relying on Apple, Google, Samsung and Amazon to provide us customers is dangerous, especially if we factor in the rules that go along with participating in someone else’s store.

Honestly, it isn’t possible to get rid of all risk. But it is important to consider which risks are worth taking and eliminate all the rest.