The $7M Platform Dependency Disaster

Mobile app built on top of Instagram API. Helped influencers manage and monetize their accounts. 500K users, strong revenue growth.

Company built entire business on Instagram's platform access. I invested $200K as angel. Product was fantastic—influencers loved it. Company raised Series A at $25M valuation. Growing 40% monthly. Instagram was encouraging developer ecosystem. We had regular meetings with their partnership team. Built entire roadmap assuming continued API access.

April 2018: Facebook/Instagram announced API restrictions following Cambridge Analytica scandal. Our API access was severely limited. 80% of features stopped working overnight. No warning. "Partnership team" stopped returning emails. We tried to negotiate—no response. We had 60 days to comply with new restrictions. We rebuilt what we could, but the core value proposition was gone. Users churned to 30% monthly rate. Revenue dropped 70% in 90 days. Tried pivot to other platforms—too late. Company shut down in December 2018. Series A investors lost everything. My $200K angel investment: worthless.

• Never invest in companies with single-platform dependency
• Require multi-platform strategy from day one
• Red flag any business where platform can unilaterally destroy value
• Build "platform risk" into valuation—assume access will be restricted
• Keep 12+ months cash specifically for platform pivot scenarios
• Avoid platforms controlled by companies with incentive to compete with you