MattMaroon.com

One of the internet’s most popular uses, up there with porn and pictures of kittens, is arguing over which product, service, or company is "better". OSX or Windows, iPhone or Blackberry, Myspace or Facebook, Ruby on Rails or PHP. Everyone has an opinion as to which is "better", and as often as not it seems to be the far less popular one in terms of overall adoption (such as OSX or RoR) that the experts like.

I saw this quite a bit in the online poker world too. Before the UIGEA forced them out of the market, Party Poker was so much larger than any of the other sites that even after they were forced to turn away 85% of their customers they were still virtually tied for second place, and not too far off of first. But hardly anyone would call Party Poker "better" than Poker Stars, or maybe even Full Tilt. For one thing, their software was atrocious. Most of the programmers I know will tell you that PokerStars is rather impressive from an engineering standpoint, and most players would agree about their superior ease of use, responsiveness, etc. On Party, the software crashed all the time, but was still more reliable than their customer support. You were lucky to get any response at all from their reps if you sent in a problem, and if you did it was unhelpful, incomprehensible, and sometimes even rude. PokerStars has always had someone who actually speaks English respond to you with actual help in a few hours. If you compared the two sites from the user experience standpoint, it was like the difference between Edvard Munch’s "The Scream" and the crayon drawing your 3 year-old made that’s hanging on your fridge. They’re both sort of the same thing, but one belongs in a museum and the other is going in the trash as soon as you can do it without hurting a little kid’s feelings.

And yet Party Poker was massive and PokerStars, while still most likely very profitable and better in almost every way, was considerably less successful. Why? Because "better", as used generally, is a totally meaningless term.

Two competing products or services, even in the same industry, compete across a number of different battlefields and usually only one or two of them matter. I call them the critical points of differentiation, and they’re what determines who gets Windows market share and who gets OSX.

Take mobile devices for instance. If you read much in the way of gadget blogs or tech-related news, you’ve heard about the iPhone 20 times a day for the last two years. The only time you hear about RIM is when someone is lampooning their new products or talking about how much they "just don’t get it". And yet while Apple’s sales have been impressive at about 20 million units in 2 and a quarter years, Blackberry sold almost 8 million units in the last fiscal quarter. And Windows Mobile, about which a favorable word has not been uttered in all of history, sold 20 million units in 2008 alone.

And so the question is, if the iPhone is so much “better”, then why are Blackberry and WinMo outselling it by a wide margin? Surely it’s not because of brand awareness. Nobody beats Apple on that. The answer is because on many of the critical points of differentiation, the competition wins hands-down.

If you were to line up the many features on which the phones compete, you’d arrive at a table something like this:

*such as remote wipes, Blackberry/Active Sync server support, Word/Excel support, etc.

When it comes to some of the critical points of differentiation, the Blackberry and its WinMo cousins are clearly inferior (most notably the consumer ones) and for some (most notably the business ones) they’re clearly far superior. And the market demand for those individual points determines which is the winner.

It was similar in online poker. If you compared Party and Stars, you’d get a table like this:

It turns out that people play poker, especially online, primarily to make money, and how much money they make is directly correlated with the amount of action the site has. Party Poker was aggressive at marketing, especially in the early days of poker on TV, and as such they built a massive user base early on. And because they had the most action, especially amongst average Joes who were pretty easy to win against, they earned the biggest marketing budget to spend on ads, which in turn brought in new action. They also won the word of mouth game too because guys like me were making boatloads of cash there and not nearly so much on PokerStars, and of course were telling our friends about it. Plus they had a very lucrative affiliate program, which nets traffic directly and leads to lots of links which also helps boost your popularity with search engines, so despite almost everyone who played at both sites considering them inferior, they were getting more players through every conceivable channel. I can’t tell you how many times I or one of my friends said something like “Jesus I hate Party Poker but those $30/$60 games are so good.” Some of us even wrote in begging Poker Stars to advertise on TV so they’d get more action and we could play there instead.

Like the iPhone, PokerStars wasn’t a dud by any means, because "everything else" counted for something. Their tournaments, which they were the first site to really promote, brought lots of suckers to the tables and made sure that every week a number of them fell ass-backwards into enough cash to play some decent stakes ring games. And for the people who just played to have fun those tournaments, combined with the better software and support, at least sometimes made them not mind that they were losing more than they would have against the weaker competition over on Party Poker. Plus general randomness combined with superstition ensured that some people who tried both sites had better luck on Stars and saw a pattern where none really existed.

But despite all that, Party’s peak traffic was many times that of Stars, and the reason was that they were better at the one thing the market prized above all of the rest combined by a factor of five. The same is almost always observable in any product that the "experts" call "better" but still greatly undersells its competition. It’s why Windows is so much more popular than OSX, and it’s why Michael Bay grosses 10 times what the Coen Brothers do. People just want a cheap computer that runs lots of programs and a movie with a couple shots of exposed breasts and a bunch of crap blowing up.

So the question I always ask when someone says X "is better than Y" is "in what way(s)?" (It turns out people on arguing on the internet almost never stop to consider anything that deeply before typing, even at the places supposedly populated by an above-average-intelligence crowd.) The only way one product is ever truly and generally better than another, in the way critics use the term, is if it is actually superior at every point of differentiation, which is incredibly rare. (And if someone ever makes that claim you’ve almost certainly got a fanboy on your hands so just hang up the metaphorical phone.) If it’s not, then you have to ask yourself on which points is the product better, and which ones are the ones that really matter, because any business trying to make something that isn’t better, in terms of the critical points of differentiation, is really just a charity.

And when you’re examining your own product, it’s important to ask who your competition is, in what ways are you better than them, in what ways are they better than you, and how much do people really care each of those points. If you find that people care more about the points where you’re losing, then you’re wasting your time.