Hitchhiker’s Guide to 650 :: April :: 2006

Product Management, TechnologyApril 18, 2006 12:00 pm

A couple weeks back a “friend” of mine ( :) ) tried eHarmony based on a friend’s suggestion and got the following message:

eHarmony is based upon a complex matching system developed through extensive research with married couples. One of the requirements for successful matching is that participants to fall within certain defined profiles. If we find that we will not be able to match a user using these profiles, we feel it is only fair to inform them early in the process.

We are so convinced of the importance of creating compatible matches to help people establish happy, lasting relationships that we sometimes choose not to provide service rather than risk an uncertain match.

Unfortunately, we are not able to make our profiles work for you. Our matching model could not accurately predict with whom you would be best matched. This occurs for about 20% of potential users, so 1 in 5 people simply will not benefit from our service. We hope that you understand, and we regret our inability to provide service for you at this time.

What can I say? These eHarmony guys are simply brilliant. . . they understood that they are a network effects business and as such “nodes” in their network (ie people) must fit an exact profile/segment in order to add value to its network. The wrong people (saying nothing about my friend’s eligibility :) ) will not only NOT add any value but could potentially SUBTRACT value from its network.

Also, by rejecting people which it doesnt think it can serve efficiently, profitably, or satisfactorily eHarmony is reducing negative word of mouth. Progressive Auto insurance does this by not only sending customer away but to directly a competitor. If it doesnt believe it can produce the lowest insurance quote for that customer, it has the confidence that its competitors will LOSE money serving that particular person.

Furthermore, by simply rejecting a small percentage of applicants, eHarmony can create a falese (?) sense of exclusiveness and furthre reduce churn once an user is acquired. Its an age old technique employed by fraternities and the military to instill a sense of pride and ownerhsip which in turn translates to dedication and committment to the community he/she is finally inducted into.

It takes balls for an internet company to turn away users, but eHarmony is successful for a reason. . .

Other 10:02 am

From MTV . . . Can eBay’s Taylor Tees, Paris Pins Predict ‘Idol’ Winner?

You can sell a house or buy a Paris Hilton Garbage Pail Kids card on eBay — and now you can find out who’s going to win “American Idol.”

OK, so it’s not foolproof, but the auction site seems to have found a semi-accurate formula.

Like DialIdol.com, eBay not only predicted Mandisa’s departure last week, but the entire bottom three.
Using their eBay Marketplace Research program, the company discovered fewer than 10 Mandisa-related items had sold over
the past month, compared to hundreds of items related to other singers.

“We thought it’d be interesting to see if there was any correlation between what people were voting for on ‘American Idol’ and what they were buying on eBay,” eBay spokesperson Dean Jutilla explained. “And what we found was that they directly mirrored each other.”

Well, not exactly (eBay had Elliott Yamin’s and Paris Bennett’s positions in the bottom three flopped), but it’s fascinating nonetheless.

According to eBay’s figures, Taylor Hicks has a strong lead, with 388 items sold, followed by Chris Daughtry (309), Ace Young (224), Kellie Pickler (120), Katharine McPhee (80), Bucky Covington (73), Yamin (23) and Bennett (10). The items range from pre-”Idol” CDs (for Hicks and some of the others) to a variety of homemade T-shirts, pins and even earrings.
“As eBay has gone more mainstream, with hundreds of millions of users, it’s become a real barometer of what’s in the pop culture,” Jutilla said. “It’s like a little stock market, and we’re seeing that with ‘Idol’ right now. Taylor’s stock is really high now, but Katharine may have a really good performance and get more investors next week. You see the market fluctuate.”
eBay Marketplace Research was designed to help businesses and also spits out average selling prices (Taylor is tops again with $19.70), but “Idol” fans are welcome to join the $25-a-month subscription service.

And, of course, research is available far beyond “Idol.” For instance, after Sunday’s Masters golf tournament, eBay sold more than four times the usual Phil Mickelson items, and although he lost, Tiger Woods items still doubled.

After calculating the “Idol” contestant numbers, eBay also tested the popularity of host Ryan Seacrest and the judges. Simon Cowell was at the top with 75 items, followed by Paula Abdul (42), Seacrest (18) and Randy Jackson (six).
Jutilla’s not ready to place bets on Hicks just yet, but he’ll be watching the sales figures closely.

“The question, I guess, is: Is America looking for a whole marketing package?” he said. “I think Americans want to be a part of someone’s career early on. They want to get in on the ground floor, so to speak, thinking they are going to make it big. And that’s what these sales represent.”