Tuesday, October 7, 2008

The Econometric of the Commons: Productive Competition and Unproductive Competition

Aight, kids, here's Part Two.
With the first post up less than 6 hours it was suggested to me that I must be looking to be run outta paintball on a rail after being liberally tarred and feathered. I want to say categorically that wasn't the plan. So save your tar and feathers and don't bother going to Home Depot and picking up that rail.

Once upon a time there were 3 paintball fields located around a major metropolitan area. (Everybody loves a story, right? Well, you're getting one anyway. This one is more of a fable really–a story with a moral. And pay close attention because there will be a quiz at the end.) 2 of the 3 fields were model operations. The third was a fly-by-night, next thing to pirate paintball, make some quick cash dealio. Imagine you own one of the model operations. Now imagine that in the next year 1000 people who have never played paintball before will play one of those 3 local fields. Here's the twist: You get to decide which field they play at it except it can't be yours. What do you do?
The single overriding characteristic of all paintball that drives every aspect of the endeavor at every level is the player. Singular. Yes, it's an aggregate of players that eventually makes the difference between success and failure in a given circumstance but thinking about the players as a group is misleading. The thing that matters is a quality all players share. The player plays the game when and where the player chooses to play. The player is a free consumer of paintball. I know, no duh, but think about it for a second. Besides the obvious it means the player can't be coerced and the paintball market in total is made up of the pool of players. I know, another no brainer when you stop to think about it but it's important nonetheless. For PBIndustry (everybody with fields, stores, factories and the materiel components of events) this means they are all selling to the same pool of players--and, the players are a freely self-identifying association.
So how did you divvy up the 1000 players? If you sent any of them to Blackbeard over at Pirate Paintball–BZAAPPP! You lose. Thanks for playing and don't let the door hit you on the way out. As an isolated situation it may seem like a tough call no matter what choice is made but it really isn't. The 1000 players aren't yours. (Yet.) So those players don't affect your bottom line. (Today.) But if you send them to pirate paintball for bloody welts, eye patches and machine gun massacres what percentage ever play again? And how many haven't-tried-it-yet players do they sour afterwards because of their experience? Now if you sent them all to the other model operator you know the 1000 players were far more likely to have a positive, safe, fun day of paintball. And the likelihood is a much higher percentage become repeat customers. And as repeats you now have an opportunity to compete for their business.
The other guy's loss isn't your gain. Players choose. The first goal all PBI hold in common is getting the non-player to choose to play. When they become a player is the time you compete for the choices they make.
A couple of factors have blinded PBIndustry to the merits of operating in common. Manufacturers tend to be wholesalers primarily dealing with retailers so are one further remove from the player and are in day-to-day competition with the other manufacturers for market share and indirect sales. (Let's skip what happens when manufacturers become retailers for now.) Retailers are local and tend to see the other guy's success as their loss. And of course when things were good there's little incentive to make that extra effort and take on extra work.
Additionally, the calculation everybody is determined to make is where do I lose on this proposition. Not what do I gain, but what's it gonna cost me? What advantage am I giving up? I'm not gonna argue cost or rate of return or shrinking margins. What I will say is this: operating in common where it serves everyone's interest doesn't alter the competitive environment except to acknowledge that everybody's life blood is the player base and building and sustaining that base is something that none of y'all can do as effectively alone as cooperatively.
To date the bulk of the energies expended by PBIndustry have been aimed at selling to more of the existing players than the next guy. Which, on its face, isn't unreasonable. What it does however is cede a significant avenue of potential growth to random happenstance or at best the skill of each local field and store. Grow the player pool and there's more market for everybody. Which is another no brainer and not news to anybody. And yet--

Part Three: been there done that & the (next wave) Paintball Sports Trade Assoc.

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