Many perceive that the core issue in the “Facebook vs. Robert Scoble” debate is about who owns personal data, but in actuality it’s about Facebook protecting a sustainable competitive advantage. By not allowing Scoble to download his contacts, it creates a high switching cost, and therefore creates a disincentive for Scoble to use other social media sites.
For those unaware of the issue, Robert Scoble’s Facebook account was disabled after he tried to take his personal contacts from the social networking site. From UK Techcrunch:
“Data portability from social networks is going to become a huge tech industry issue in the new year. Why? Because well known tech blogger Robert Scoble has had his Facebook account disabled after he tried to pull out his 5,000 contacts (known as a social graph) from the site. This will fire the starting gun on all the debates about who owns your data on a social network, debates which - till now - have seemed rather theoretical, and could even lead to a revolt amongst some Facebook users.” http://uk.techcrunch.com/2008/01/03/facebook-blocks-scoble-for-downloading-his-contacts/
Creating lock-in is a core part of every successful company’s strategy and creates a tangible reason for customers to remain loyal to a company.
Some other places that lock-in is alive and well:
- Online bill paying: Setting up payees takes time and effort creating a reason to not want to change to another bank
- iPod and iTunes: Proprietary synching and usability create a simple buying, managing, and listening experience
- Amazon and Netflix: Recommendations based upon your ratings, as well as wish lists create reasons to keep going back
- Airline miles: Deemed a reward to you, it serves a dual purpose of creating an reason to choose the airline repeatedly
Contracts, exclusive memberships, loyalty cards, even branding create allegiances that help compel customers to choose the same product repeatedly.
Whether Facebook allows Scoble to take his contact data or not, the real question here is, how can your company create a competitive advantage?
I look forward to comments at eric.karofsky@molecular.com
