Tuesday, July 18, 2006

Day of analogies continues

Santa Monica, CA. Depending on which direction you face, it's either the end of Route 66 or the beginning. It is a city that embodies the identity crisis of that proverbial perpetually interpreted glass of water. You can't blame the city, it's stuck between the beautiful whitecaps of the Pacific Ocean and the grit of Downtown Los Angeles. Regardless of your perception of the city, one thing stands as an unblemished jewel, a flower that blossoms every Saturday morning: The Santa Monica farmer's market on 3rd Street.

It's got so much of everything you want, you're going to need two baskets on your beach cruiser. I'm not kidding, just about every time I go, I discover something new. A purple-headed cauliflower, bubblegum-scented incense and hand-crafted things I usually have to turn over a couple times before I figure out its purpose. It is the ultimate miniaturization of a free marketplace. Yes, this will do for my analogy.

Let's say the farmer's market suddenly became ridiculously successful. Oh, somewhere in the ballpark of a multi-billion dollar market. I vote for $16 billion (A). Sound good? Great.

Now let's say you're a busy little farmer. You work hard. Your offering goes from one little basket in some else's tent to your own piece of real estate. In fact, before you know it, your "little" tent has taken up 17% (B) of the space in the entire market. Not only that, you're the most popular (C) shopping spot in the whole place! Life is good, so so good.

One problem. At the end of the day, you open up your cash box and count your score. In the $16 billion market, you go home with $200 million (D). Sounds impressive. Except that's 1.17% of the market's take. One pathetic tiny flaccid percent. Sad day.

It's not that bad so don't go jumping into the ocean or anything. It's just time to change strategy. Selling fresh apples worked from the basket but with a whole tent, you can probably add a few things...

You figure out what we're talking about yet? Yup, MySpace.

Now I know I'm not bringing up anything new. Smarter industry people have been wondering why MySpace isn't a bigger money-maker and they've been coming up with great hypotheses and proposals. Unfortunately, I'm not sure MySpace has listened. The latest ideas coming out of there have been more partnerships with advertisers.

Since everyone else has taken a stab at it, here's my take, for what it's worth. I'm going to require another analogy. Yeah, I know, sorry.

MySpace is good at bringing people together. It's the new place to hang out, kinda like the mall in the 80s. Except it's not the mall. You can't grab a bite or shop for jeans or check out the latest book. The MySpace revenue model is to sell advertising to advertisers. That's like putting signs all over a mall but having nothing to actually provide consumers. You want those jeans? Sorry, can't get em here, you have to go across town.

Just about every mall store owner knows that foot traffic is good for business. When people go somewhere, they'll probably leave a little money behind. That's right, I think MySpace should sell stuff.

I'm not saying MySpace should suddenly turn into Amazon. However, I am saying that there is potential for them to provide services to their audience that would generate revenue and make things interesting. How about selling some of that music? What about offering some photo printing services? All those kids planning things to do, what about selling some movie or concert tickets? What the heck, sell some jeans! Then, keep track of everything they buy, let them use it as social capital. Kids love that social capital stuff.

There's no need for a hard sell, if you make the products relevant and part of the experience, your market should respond favorably.

Some of the people I know that use MySpace all the time would probably welcome some online services, if for no other reason than that they're too lazy to bother with other sites. Sure, I'm stabbing in the dark here, but when you're at only 1% given all those other great stats, the only way to go is up.

(A) (B) (C) (D)

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