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Facebook Gifts is Killing Startups

Facebook Gifts will kill off several startups who are attempting to cash in on social gifting. But isn't that how supply and demand works?

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Facebook Gifts is Killing Startups

Karma

Facebook will kill off at least 10 startups when it begins its social gifting feature, but should anyone be sad about that?

There are several of these social gifting startups: Wrapp, Giftly, Giftivo, Giftdish, Gifthit, GiftSimple, GiftDrop, DropGifts, YouGift, Ziftit, Let’s Gift It, according to PandoDaily. And all are tied to Facebook in some way.

But why the heck would anyone use these when Facebook itself will offer ways to send gifts to those on your friend list? That's the rub, and why many of these startups -- who received some serious investment -- should know their days are numbered. 

On Facebook Gifts users can pay right away or add payment details later, but the giftee has to provide an address. The odd part is that the gift just isn't sent, it's actually previewed by the giftee who chooses the color, size or flavor he or she wants -- so much for surprises. However, Facebook didn't come up with this idea in a vacuum. The idea came after buying social gifting startup Karma earlier this year. And the best art for Facebook? Facebook gifts works on both a desktop and mobile, which will hopefully increase their much maligned mobile revenue.
 
We like people to come with new ideas and innovation, but if there are another 20 startups doing what you're doing, eventually someone is going to be the standard and the rest will not be as successful. However, if Facebook buys the competition and you use Facebook as an integral part of your business model, it's probably time to pack it in.

 

 
 
 

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