Free As Part Of A Business Model

by Christopher Paul on April 17, 2012

Ben Brooks rejects free on principal. I feel that’s a little short sighted and it would be a shame to reject a product or service because it’s free. I’ll agree that free isn’t a complete business model but the existence of free – or the use of free – doesn’t make it bad.

Free is a part of a business model. iCloud, for example, is free and part of the broader Apple business model to attract hardware purchases. Free music can help promote an artist and lead to paying gigs where scare resources (concert tickets) can sell at a decent price. Free in the app ecosystem can also lead to in app purchases, subscriptions, or something tangible like early access to content. Even TapTap Revenge has different band sponsored versions that I’m sure they didn’t develop for free (though they didn’t charge the user). Hell, Marco Arment has the Instapaper mobilizer which is free (unless he has agreements with developers that use it). But I don’t need to buy his app to use that service since I’m just passing a URL parameter through his system. But it’s a way to get people interested in his app. It’s exactly how it happened for me; I downloaded Tweetie, saw the mobilizer support, bought his app, and now subscribe to his premium API access.

Ad supported business models aren’t complete either and Ben knows this. He doesn’t just display ads on his site, he has sponsored posts. You can call that an ad but it’s different from displaying a picture. In many cases, Ben is taking the time to write about the product or service acting as the sponsor. And Brooks need not limit his income to the website. He could turn his writings into speaking engagements or other paying jobs that earn him his living. But from my perspective, I’m reading his words for free (especially since I read his site through RSS and don’t see ads).

Making things free and figuring out how to make money isn’t a smart idea, I’ll grant him that – especially if the startup is arrogant about it. But neither is relying on ads – that got print publishers in trouble and it will get ad supported blogs in trouble, too. It’s looking at free as part of the whole package. To ignore it outright out of some simple philosophy makes as much business sense as picking only one revenue stream or product offering.

I don’t understand how Ben could just dismiss free when it provides so much opportunity. Free is no different than any other tool – it’s a means to an ends. He even says so when he points out that free is used to skip over the first class of users; it’s a tool to gain traction. Free gets you opportunity; reduces some of your time costs. Free has value and value is something people pay for.

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