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July 14, 2004

Comments

jeff

I'm not sure the analogy between Lance and eBay is accurate. Lance is a persistent fighter and commemorative sports hero. Several years back, he fought cancer and won. On the other hand, eBay has become arrogant and a monopoly that doesn't care about their buyers nor sellers. For example, an acquaintence of mine was defrauded for $2,500 on ebay. He filed a complaint with eBay and their response was "there's nothing we can do about it, you may wish to contact local authority".

Robert  Paterson

Hi Jennifer
Thinking of the Peloton got me thinking of the idea of the "Well Curve". Traditional mass marketing aimed fro the centre of the Peloton - that was where the most people were. But now that is where you do the worst. People want cheap fares or have their own planes. People want a cheap hotel or a luxury hotel etc. here is a nice article that talks about this better than I can written by Daniel Pink for Wired
http://www.wired.com/wired/archive/11.05/start.html?pg=2

Jeff Nolan

I think the problem I am having with this analogy is that you are looking at riders as individuals. A cycling team depends on all the riders to ensure that one is victorious (they are called "domestiques" for a reason), and in an interesting twist, the riders from other teams will selectively cooperate in a "you pull for me today, I'll pull tomorrow" relationship.

There's a great paper on this phenomena as evidenced in NASCAR racing. The author's thesis is that the incentive to cooperate in drafting is powerful and a racers long term success depends on knowing when to enter such relationships and when to exit.

http://www.firstmonday.dk/issues/issue5_2/ronfeldt/

So I think the correct conclusion to draw from your cycling analogy is not one of market position, but rather how partnerships enable one competitor to move ahead at the right time. Successful racers know the way to win is to stay behind the leader until the opportunity presents to slingshot ahead. The corollary is that when you draft closely behind the leader you become a drag on them causing them to burn more fuel than you.

Jonathan

The eBay analogy is curious. In all of its existence, eBay has never faced significant competition. Yahoo Auctions is pathetic by comparison. Name another interesting stand-alone auction / marketplace... there isn't one. eBay hasn't innovated in the sector much at all (their site & features have remained almost completely the same for 5 years); they took the original concept and pushed it a long way however. So how would they actually fare against competition?

I think eBay, unlike Lance Armstrong, is a stagnant giant primed to be knocked off their perch. If you listen closely, you can hear millions of sellers complaining about being nickel & dimed to death by eBay, via a business model that isn't based on measurable rewards for sellers (e.g. charging set amounts for premium listings even if nobody clicks on your listing). eBay does so well, because sellers have nowhere else to reasonably go, it's why eBay is able to raise their fees at will (limited pricing pressure).

I think their competition is coming though, so it should be interesting.

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