Scoble draws faulty analogies between Starbucks and Microsoft

Alex Hoffman writes his own answer to Eric Kidd: “he needs to change his focus away from technology, platforms and the development community, to real world end-users and their requirements.”

One last thought. My family just went out to dinner. On the way back we passed by our favorite coffee place. Named Victor’s. Hey, wait a minute. This is Redmond. Not far from Starbucks’ headquarters. In Eric’s world, Victor would never be allowed to sell coffee.

Every day Victor reminds me that someone can beat “the dominant corporation” and deliver a better product.

Think that Victor doesn’t have a chance? 25 years ago you probably were the one saying “no fast-food franchise has a chance against McDonalds.” But, look at the per-store sales of In-N-Out vs. McDonalds and you’ll see that In-N-Out is another example of a dominant player getting their lunch eaten.

[The Scobleizer Weblog]

The fundamental problem with this analogy and the several others that Scoble offers is that none of these other industries are subject to the network effects that software platforms are. Scoble’s argument is that other big, dominant, competitors proved vulnerable to competition so Microsoft is vulnerable too.

What he conveniently overlooks is the critical differences in the markets we are talking about. In software platforms, unlike markets for expensive coffee, it matters what other customers are doing. Imagine, if you will, a coffee market that was similar to the operating systems market. In that market, if I bought coffee at Victor’s I wouldn’t be able to have a conversation with anyone who bought coffee at Starbucks without permission from Starbucks. Or imagine a world where you had to get permission from the zoning board and Starbucks to open a coffee shop. Then you’re getting closer to the world that platform vendors like Microsoft get to play in.

So, Scoble, here’s a question for you. When you’re evangelizing Longhorn in days to come, will you be just talking about some whizbang new feature or might you mention in passing the eleventy gazillion users in the installed base?