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Dave: I normally find you a very articulate and interesting commenter on the market, but this post is a bit surprising. As someone who is super invested in entrepreneurship and startup culture, you come off as a big-company redcoat here. What evidence leads you to believe that Facebook can innovate at the margins of its business (they have let Zynga become fairly powerful, no?) - and why would you suggest that entrepreneurs cannot compete against them? As a separate issue, I think your paypal argument about cash incentives versus virtual rewards is a tautology. The world has changed substantially since 1998, and the vast majority of the evidence suggests that virtual rewards (when properly socialized) are as or more meaningful than cash incentives. The research is elaborated on in my book - Game-Based Marketing (Wiley, 4/10) - the first look at how companies big and small use game mechanics to build and grow their communities. Happy to talk about this some more - but your facts are wrong in this post, and cash rewards are increasingly becoming the province of lazy marketers, rather than the be-all-end-all. Meanwhile, smart marketers are taking their customer loyalty costs to near-zero with game mechanics, giving them a tremendous edge in the medium term. Happy to share some examples if you want to hear them. :) -Gabe Zichermann
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Apr 13, 2010