[Sigia-l] Buy or rent?

[Manu Sharma]

Ziya:
"I wish this episode could open up a substantive discussion on issues
concerning the 'rent' model, and not just for music."

Since buy vs rent is an old problem and has little to do with
technology, I'd imagine there to be lot of stuff on this in business
journals. I'd start with HBR and maybe even look up Amazon to see if
there are any books on this topic.

Ziya:
"How do you design systems that favor customer 'stickiness' (how's that
for a comeback?) over all other considerations?"

Can we rephrase the question as: How do you design systems that favor
customer *loyalty*?

By forgetting about stickiness, and delivering such exceptional value
over other competitive products/services that customers keep coming
back for more.

At least this is one of the lessons I take from the Google vs Yahoo
approach. Yahoo's strategy to this day has been to be the only place
where customers go for everything. Their search engine in late 90s
reflected this approach as it included results from yahoo's directory
and other properties. The idea was to keep the user on their site for
as long as possible [it suited their main revenue stream at that time-- 
[uncontextual] advertising.

Google took the opposite route. Google came with a singular focus on
helping users find the best sources of information *as quickly as
possible*. They *want* you to leave their site. The value that their
search provided [accuracy of results] was so strong that people kept
going back to it. As Google founders say in their interviews [1], if
people really care about the information they're looking for, they're
not going to stick with one service. They will look at a multitude of
sources to find the best one.

Stickiness, if it means doing everything you can to ensure users only
use your service, is an evil goal ultimately even though it might seem
to work well in the short term. Yahoo's strategy is a "push" strategy,
supply focussed rather than the pull strategy of Google, demand
focussed. We know who's winning.

Of course, it might not work for everyone. What's critical here is to
deliver exceptional value to users that they don't find anywhere else.

Manu.

[1]  Interview1 Sergey Brin:

My personal feeling is that people focus a little too much on these
integration questions. I think if you have a subject you really care
about, like if you have diabetes and you want to figure out the latest
research on something like that, you're going to use the best research
tool in terms of the messengering service you use.

http://www.alwayson-network.com/comments.php?id=3150_0_1_0_C
_____

Interview2 Larry Page:

PLAYBOY: Many Internet companies were founded as portals. It was
assumed that the more services you provided, the longer people would
stay on your website and the more revenue you could generate from
advertising and pay services.

PAGE: We built a business on the opposite message. We want you to come
to Google and quickly find what you want. Then we're happy to send you
to the other sites. In fact, that's the point. The portal strategy
tries to own all of the information.

PLAYBOY: Portals attempt to create what they call sticky content to
keep a user as long as possible.

PAGE: That's the problem. Most portals show their own content above
content elsewhere on the web. We feel that's a conflict of interest,
analogous to taking money for search results. Their search engine doesn
't necessarily provide the best results; it provides the portal's
results. Google conscientiously tries to stay away from that. We want
to get you out of Google and to the right place as fast as possible. It
's a very different model.

http://www.google-watch.org/playboy.html