How LinkedIn betrayed a 5-man startup

Business is war. Anyone who doesn't think so hasn't got the enough scars to understand this yet. As a small entity, any time you tangle with large well-funded companies you have to be very aware of the fact that they could shaft you in a dozen different ways whenever the please. That's the hard and cold reality of it.

Contracts and agreements only serve to possibly give you the option to sue, and nothing more. They don't create a guarantee of recovery or reparations in any way at all.

I had one very painful incident with a large Korean multinational corporation a few years ago. This was over a hardware design. We devoted about eight months --nearly a million dollars in cash and man-hours-- to complete a set of designs based on components and assemblies that this OEM was to provide.

They wanted to get our business and pull us away from their main competitor. In-person meetings where had with the top three VP's in the US. Promises were made both verbally and on-paper. Short version: When we were finally ready to go into production we were told that the components in question --components they had recommended and guaranteed as long-availability components-- had been discontinued. Their recommendation: "You need to redesign your product line".

Soon afterwards I learned that other companies that had selected the same components were under the same dire situation. One particular company had closed a deal with the US government and was about to get sued for tens of millions of dollars for not delivering on their contract. On our front, this one event nearly destroyed my company at that time. We survived only to get taken out during the economic downturn due to having been weakened by this event.

In looking at the potential to sue this company our attorneys concluded that they'd need a minimum of $250K just to consider pulling that trigger and another $250K available past that. They expected this multinational to simply bury us with paperwork and an army of lawyers, with the only goal being to cause financial pain and get us to quit. Their recommendation: "Figure out how to survive and lick your wounds. It is nearly impossible to go after these guys and actually come out ahead".

This is how large companies, effectively, make their own rules, their own laws, if you will. While this wasn't the only tangle I've ever had with a large company it was the worst I've had to endure. I was the first domino that got tipped over in a chain of events that ultimately killed a business that I spent the better part of ten years building.

Be careful.

I completely disagree with other people's attitudes on this point - startups definitely need to be wary of using third party APIs, but it is incumbent upon companies to create clear and stable terms for developers to operate within if they are thinking of opening an API. It's completely unfair to make representations to people that they rely on to their detriment and then renege at the last minute.

Let's be clear too - it's not as if these guys were making a porn application or something that violated LinkedIn's TOS. Nor were they acting without LinkedIn's consent. Companies reserve rights to revoke access without reason in order to limit their legal liability but they need to be wary of the non-legal consequences to their reputation.

This is an unmitigated disaster for LinkedIn. Obviously if it is a professional network, and they as a company already offer a number of solutions to recruiters, companies and professionals, then almost every app made for their platform is going to compete with their own offerings in some way.

If they aren't willing to set clear boundaries in this regard then they simply need to shut down the API and stop wasting everyone's time. In any event, even if they leave it open they can forget about people making a serious investment in the platform.

To be honest, this app sounds like a feature LinkedIn can easily implement on their own. There is no viable business here. The real thick value lies in the data.. that's 99% of the work. The app just adds 1% value on top of it.

You're complicating something that isn't that complicated. LinkedIn's TOS very clearly states in the terms that it is illegal to "Use the APIs in an Application that competes with products or services offered by us"

So when you see:

http://talent.linkedin.com/Recruiter

And your site is using the API to create a service for recruiters, it seems crystal clear to me that you are violating the LinkedIn TOS. This is not some grey area or some arbitrary changing of the rules - it is a very clear violation of LinkedIn API guidelines. I just don't see how this proves even a little bit that LinkedIn doesn't "care about their developers".

And for the bigger picture, it is amazing to me that a significant number of people expect LinkedIn to sit around while some other company attempts to undercut LinkedIn's own premium product using LinkedIn's API.

It's crappy human behavior, which is not to say 'bad business practice', to pretend to work with someone and support their efforts for 2 months, and then summarily shut down their business simply because LinkedIn made an 'informed decision' that 'we don't owe you anything.'

Let's not confuse the fact that, although businesses certainly have a right to defend their own interests any way they see fit within the law, that has absolutely no bearing on whether or not the community they conduct business in will call them out when they act in a basically unkind or deceptive manner.

The former has to do with business, fine print and the dog-eat-dog, watch-your-back world of modern commerce. The latter has to do with basic human decency, trust and the goodwill of the community you do business in.

"It's just business" is all well and good, but don't get butt-hurt when the community that you work with looks at your behavior and says, "it sucks that you did it that way." That's just the cost of "doing business," right? Suck it up and take it.