I recently read a book called FREE by Chris Anderson.Â
This book is a summary of the marketing technique and economic force of FREE! Chris believes so much in the concept of free that he in fact has offer his book for free online, you can view it here.
Chris starts with a history of free and then goes into how free is becoming more and more prevalent in our society today. Â Chris breaks down free and how it works for companies like Google and their free gmail and google docs.
Here are some of the key thoughts:
- Somethings are too cheap to matter. As society progresses, many things like technology become cheaper and cheaper. Moore’s Law shows that technology doubles every two years. As technology moves closer and closer to costing nothing, giving away a free Ebook or an email account costs almost nothing. It costs a small amount of electricity and data, but that amount is so small, its too cheap to matter.
- The Freemium model of mostly free users is something that will become more prevalent. What is Freemium? Its a model where many of the users, maybe even as much as 80% use the product for free. The 20% of users who are paid, pay enough to develop the product. This is possible becuase the cost of a user using an app is almost zero. This creates a huge marketing funnel.
- Real world models of free. One of the fun things about this book is that throughout the book, there are examples of how a free model might work out. One of my favorite examples is of how a text book might be free. Â The model allows for a free digital copy of the book, but then charging for printed copies, or printable copies. This also allows authors to make updates over time without having a huge capital costs. While the upfront profit is not as great, at the six year point, one companies authors starting making more money. It increases the lifespan of the income. Here is a picture of the revenue model:
This book is worth the read for no other reason than it helps you get a grasp on how the economy is developing. But other reason would be to help you think through new concepts on how to help your business develop using Free.
