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11 Feb 2010

E=mc2 - Critical Mass and the Event Horizon



E = mc^2 \,\!
The mass-energy equivalence is likely the most famous Einstein's equation. It demonstrates that the energy of an object at rest is proportional to its mass.

There has been much arguing in LinkedIn forums about the need of a directory website which could overtime compete shoulder to shoulder with OTAs. Now, as far as we could tell, there is somewhat of a general agreement on the need of it, how to get there is more a matter of discussion.

Ruling venture capital out, the saying goes, you will have to exact money and contracts from prospects to finance the directory's sheer internet visibility.

We don't believe so. The directory must come free and welcome the 'billboard effect' (ie driving his very visitors' quickly away to their final destination) to compete. Counterintuitive though it seems, if you think about it, this is exactly what Google did to win the 'Search' war at the beginning of this decade.

And the internet visibility? We're backed by no less than Albert Einstein's relativity to argue that without critical mass you don't gain the 'critical energy' necessary to compete with the big 'objects' in spacetime. If the idea is good enough, inertia is all you need.

The Event Horizon

There is something scarier than offering a couple of free lunches down the road.
The Black Holes.
'Black holes are probably the single most interesting dramatic prediction of general relativity... Objects where the gravitational field is so strong that light itself cannot escape' (Carroll).
There is nothing 'evil' or 'bad' in itself about black holes (read OTAs) either than conveying all objects towards 'singularity', turning entropy into order, gradually reducing the number of objects in spacetime (read vacation rental market) until there is only one single winner.

Killing the Manager

The above may sound sweet at first to travelers' ears, but on double thought, he'll realize we're heading towards a lose/lose situation (mind you, we're traveling at square the speed of light;).
In the long run this is going to make traveling more expensive (estimated OTAs share in the hotels' business is 25%) and less personal. Ranking and user generated contents are increasingly being used as a marketing tool to the detriment of the final user. Unless a strong signal is dictated from the base upward the 'Event Horizon' (ie the place where nothing can escape without moving faster than light) it's where we're heading to.

image credit scielo.br
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Posted by gugli at 13:26
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5 comments:

  1. Gugli

    "Ranking and user generated contents are increasingly being used as a marketing tool to the detriment of the final user."

    I would add and the accommodation provider to this sentence

    Desi
    ReplyDelete
  2. Hi Desi, welcome!

    I do think OTAs give a very valuable service to the accommodation providers, don't get me wrong.

    Actually I think that OTAs are being nudged into leaning more and more towards the 'accommodation providers' interests as a consequence of the fact that they have now become their sole 'clients' since travelers are not charged directly anymore.

    Instead of tackling the problem from the travelers' perspective, they're handling it in a very commercial kind of way turning a blind eye in favor of those hoteliers paying the highest fees, but ever more oblivious of the final users.

    This is ever more becoming their Achille's Heel and the travelers' interest is the right approach for whoever is really willing to compete on a large scale.
    ReplyDelete
  3. Hi Gugli, believe me I love the idea, but it will only work in an ideal world. Don't forget that the internet is an unregulated mess of websites and businesses. Also remember that the internet is not what it was ten years ago when Google first started. Here is what I mean. Just take a look at the hotel space. There are plenty of free directories, but you won't see any of them anywhere when you search. You'll only see Expedia, Travelocity, Orbitz, Venere, Booking.com, etc... As soon as you create a free directory, others will emerge. Not only that but the OTAs will go out there and have the same amount of properties, and will build even better content than what the directory has because they have a paid army of people to do it, and the free directory will quickly lose the battle. Based on my experience, this can't be done without all of the properties contributing to a fund that can be used to build a brand and compete effectively.
    ReplyDelete
  4. I do see your point but, unless you look for venture capital, I'm sure you can't do first funds and then critical mass. It has to go the other way 'round. You likely have a more dynamic vision of the vacation rental world of what it really is.
    To win the vacation rental world you have to get into mom's and pop's heads. Their son is away and they woundn't mind some extra cash. If you ask them money they won't go for it unless it's a sure bet. It takes time to become a sure bet.
    ReplyDelete
  5. http://blog.romanreference.com/2010/02/emc2-critical-mass-and-event-horizon.html
    ReplyDelete

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