Friday, June 02, 2006

Open Sauce

Seth Godin raises the hot topic of Tabasco. He makes three points.
  • millions of homes, bars and restaurants have a small bottle of sauce - just in case of need
  • sauce not used very often - therefore very infrequent repurchase
  • growing availability of alternative flavours
This is structurally similar to some of the problems faced in the service industry - and it is part of the driver towards software-as-a-service (SaaS).

Imagine there was a delivery mechanism that allowed people to buy a single shot of Tabasco on-demand. Imagine there was a social mechanism that allowed people to share bottles of Tabasco (and many other flavours) with their neighbours. What might be the effect of such mechanisms on McIlhenny Co (owners of Tabasco)?
  • Lower (but more regular) revenues from existing customers?
  • Higher revenues from new customers?
  • Faster impact of any perceived taste differential between Tabasco and its competitors?
See also Open Sauce 2

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