Start Up Blog

Our writing really matters

Posted in entrepreneurship by Steve Sammartino on July 26, 2011

This guy put some effort into writing the words that appear on his website. The result of his writing is around 10,000 people shared it with their friends. Read it.

www.alittlebitofsomething.co.uk

The words we publish matter a lot.

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The human movement, movement

Posted in entrepreneurship by Steve Sammartino on May 27, 2011

I was really impressed by how some of the smarter Skiing resort operators are using GEO-locating to enable a deep interaction with their customers. What some of the resorts have done is used their new electronic ski lift tagging systems as a social engagement tool. Skiers can register on-line via the resorts facebook page so they can compare how many kilometers, ski runs, hours they do on the mountain for the day, week season and compete amongst friends. It’s even got a nice gaming element to it. It’s a nice iteration taking ideas from the likes of run keeper. You can read more here about what ski resorts are doing to tech-up.

The thing that is clear to me is that there is a human movement, movement. It’s so much more than companies being able to track what people are doing, it’s actually about companies creating forums where we can actually track ourselves. So we can know more about ourselves and change the way we move and interact with others and personally. It takes away the privacy concerns, and moves us into a space where we co-opt information sharing for mutual benefit.

The question entreprneurs and marketers should be thinking about is, how can we help our people track their movement to get more out of when they move. It’s only just the start.

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2 horse race

Posted in entrepreneurship by Steve Sammartino on May 10, 2011

If you haven’t already read the 22 Laws of marketing – then you should. It’s a short book which really should be called the 22 laws on entrepreneurship. It seems that most of the laws are true on a category scale – the type of scale that startups with big dreams should pay attention two. recently I’ve been reminded of the law 8: The law of duality.

The Law of Duality says that “in the long run, every market becomes a two-horse race.”

The most recent example of this is Twitter and Facebook. it seems as though they’ve won the social web race. Every brand or advertisement is now tagged with ‘find us on Twitter & Facebook’. We have to look pretty hard to find any of the other 400+ social networking sites. It seems the Law of duality is still true almost 2 years after it was written. It seems that certain power laws of dominance still exist, even though we all like to believe the market has fragmented and opened up for everyone….

The truth is there is only so much space in the mind. We can’t carry the baggage of too many ideas with us. So we simplify by limiting what we participate in. There’s lots new world industry examples of the law of duality.

Social: Facebook  & Twitter

Search: Google & Bing

Mobile: iPhone & Android

Computers: PC & Mac

The question for internet entrepreneurs, is which new categories are still to get their number 2 player. That is where the opportunity lies.

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Soundbites from the future

Posted in entrepreneurship by Steve Sammartino on April 28, 2011

A few soundbites from the future:

Leadership: It’s no longer about being king of the mountain, it’s about being center of the circle. Prof Joseph Nye author of Soft Power.

Woman will lead the 21st century, or at least a feminine social and business ethic. The 20th century was very male centric. This has flipped with the rise of social facilitation.

The 3rd world is benefiting from the mistakes of the 1st world over the past 100 years. BRIC nations especially are innovating and creating new technology platforms, while the west holds onto fossil fuel era. BRICS are investing in recycling, eco, solar and fusion and the west is resisting.

Conviviality Culture: All we really long for is socialisation. Consumption was the substitute for social recognition in a n industrialised, systematic world. Geolocating is being used as tool for us as a collective to “assemble” so we can collaborate and take back control of our destiny and conversations. Mobiles tell us where we are, and why we are there. Not being listed or ‘located’ via mobile is like not being listed in the white pages.

But, research shows that only 5% of people are “happy” when socialising on line… which tells us that it used as a substitute or preamble to actually connect physically and meet. Socialising on-line is a facilitator to actual ‘real’ connection that we want to make as humans. The proof of this is in the growth of us geo-locating each other. We need to be together.

Although we are connecting on-line, we want to tune out, log off and turn off. We aspire to not having to check our emails or update our ‘status’. It’s onerous and heavy. People in their 20’s are telling us this – not just Boomers.

The magic of the ‘live’ event is being re-born. Live is better than free on line. The free on line is the digital sampling of the event with the real connection…. It’s about being there. We’ve seen this with live footage and concerts on youtube and the growth of live streaming.

Un-Social Networking: Martin Lindstrom of Brand Sense says we are suffering a little from digital emptiness.

Meaning & Value > Volume

The above equation is something that marketers, brands and businesses need to take note of. We are no longer living in a volumetric era. Production and efficiency is being replaced very quickly by value and meaning.

We now have 2 windows to do business with:

The Retailer window and the Digital window. And people are starting to buy back time. The digital window helps us do that. Time is the asset – not ‘stuff’.

People are re-thinking why they buy. Unlike previous generations young Australians are participating in community activity, many of which do not involve any economic incentives.

Beta Attitudes (the every-preneur)

People are doing small scale, networked and highly responsive activities. They are prepared to get involved and just see what happens. The engagement and involvement is a larger part of the project than the actual outcome.

Live gatherings are occurring as an antidote to digital culture…. Or is it a manifestation of digital culture?

We are seeing micro festivals. The stadium era is over. We are more interested in a niche fringe community than a mass event. Mass media, top 40, stadium ethic and the horrible idea of the Grand Prix is out dated. The micro cohort is where it is at. Customised local and organised by ‘us’. Grand Prix is over bearing and crass – it has no fit with our emerging culture. We’ve already seen this sentiment in Melbourne.

Micro, Niche, Fringe, Bespoke, Local and Artisan are all words that we are appearing before the word ‘festival’.

Google this: Bodega party in a box

SMS Slingshot: converging the digital world with a physical interaction http://www.youtube.com/watch?v=lKEFAFP4lC4 A great way to brand events around a city which is cool, a digital crossover and temporary.

Micro Salons are starting to appear first on-line, and then in person. The art of conversation is not being lost…. It is being reborn now that media is interactive and not passive. Sure language has iterated, been redefined, shortened, coded… but the conversations are real and the more meaning and ideas are being exchanged. We are more ‘conversational’ than ever!

A punk ethic is entering business. Businesses are not asking what’s allowed – they’re just doing it. Implementing first and answering questions later…. This is a big advantage for being small. Take the example of Zingara Cucina

The beta attitude is to forget focus groups and give it a try….. and be honest about it…. Be honest about the experimental nature of what we are doing. It’s not about saying ‘this is goal of the project’ but saying that ‘doing the project is the goal’ and maybe something great will come from it…. And we’ll iterate it as we go…. We’ll invest in doing and iterating…. The digital soft economy and low barriers to entry make it possible.

There are 5 senses, and we still can’t experience 3 of them on the internet – so we must complete the connection / transaction off line…. We have to if we want to get real… and we do want to get real because we are human. But have no doubt the other 3 senses will arrive on the web.

The internet is trying to mimic the real world. GEO-locating is the juncture that makes technology connections “real”.

APP Appeal

Retailers don’t know who their customers are, or where they are or what they bought…. E-commerce retailers know all this and they have a massive advantage because of it – their advantage isn’t just in cost infrastructure it’s in rich data and information.

Australia has the highest usage and penetration of social media at an average of 7 hours a month. This is ahead of the USA, the UK and Japan. Australian retailers say their customers are not ready, but the truth is that they are not ready, or even scared.

Smart phone penetration is now 45% of handsets in Australia. The internet is in every second pocket.

Retail Future

-       We need a sense that we are experiencing something.

-       The tactile store is the future.

-       Transaction must be replaced with entertainment.

-       Event based stores.

-       Artisan values.

-       Streaming production into the store on the screen.

-       Stores must become Maisons – like some luxury brands have done.

Here’s an example – A high end fashion brand with a craftsmans store in London that live streams the craftsman in action onto a big screen in the high street store in Hong Kong.

It’s about the smell and the emotion of the store.

Can you smell the leather from the haute couture hand bags?

Does the store have an emotional footprint or large ‘sale’ signs?

The tactile store has returned and needs to be part of any seriously long term retail strategy.

Crumpler have the in store production bay behind glass where their craftsman can be viewed in action and custom made bags can be ordered, and watched being made. And Haul plan to do something even better with their upcoming ‘Town Haul’ combining food beverage and fashion.

Burberry have fashion events streamed live onto iPads they have instore so that people can purchase the ‘new’ catwalk styles before they are available.

An Acronym for the retail future is: LIVE

Live, Intimate, Visceral, Exclusive (or Event)

Pop up shops – people thought they were a fad. A cute idea in a world of heavy innovation and entrepreneurial-ism. But it turns out they are not going away. Pop up shops make sense in a world of rapid change, and BETA culture.

Component Retail – brands will start shipping product components and raw materials to stores for to be assembled on site… as part of the retail experience. The customers will become the theatre at store level and the creators by virtue of this concoction. What we’ve seen in digital…’A mashup co-creation, mass customised society’… we will inevitably see in retail…. The retailers that survive anyway. We’ll see this a lot more on shop windows:

“Build it yourself in store”

Logistics will become a hot business as we move into component and on-line retail. It’s the business we’ll all need to facilitate the commercial world we are living in. Buy shares in Fedex…. Shipping will be the biggest beneficiary of changes in the business landscape.

3D Printing & Rapid Prototyping: The ability to fabricate everything from chairs, to furniture, to surfboards, to garden tools. It’s hard to believe but new printers are being developed that can take images off the screen and replicate them into an actual size unit. They currently use a layering technique and can ‘prototype’ objects using a range of materials (plastics, carbon composites et al).

To give us just a little bit of belief the ‘fantastical statement’ above this about: Only a decade or so ago a printer was a guy name Tony in who had a little factory Ringwood. Now it’s a thing that sits on your desk that creates stuff pretty much as good as anything we can buy which is printed. Manufacturing will go the same way – into the micro solution segment.

The manufacturing industry will be evolve and provide the resources so we can create our own version of the ‘thing’.

Brand stories are best when we can choose our own adventure… Exclusive balanced with accessible.

“BETA-PRENEURS”

We are entering a world of trial and error. Where it is actually OK to fail. Betapreneurs would rather fail in action than fail by not trying. Betapreneurs transfer virtual world skills into the real world and business.

New low costs of business and access to production and information are facilitating a ‘try it and see’ culture.

A result is the new Anarconomy:

Anarconomy: An alternative economy where there are no geographic boundaries and often no tax claims. We circumvent the system. We make our own rules.

Alternative currencies are starting to appear. Facilitated by digital arbitrage… where we know the cross rates of goods and services after currency conversion and shipping. So the alternative of a global currency will emerge. Probably as a function of the gold standard (global price of gold as the trading valuation mechanism) with some form of digital instant and unseen conversion from our home currency into some quantum derived from gold. Maybe Paypal will do it for us? Or will it be Facebook credits?

Where Youth once rebelled against commerce, today’s youth embrace it. They like brands so much, that they want to build their own. They are unapologetically ‘into’ business. It’s a conspiracy between brand love and low barriers that has given birth to a new entrepreneurial spirit. Web enabled – of course. But it’s commerce on their terms.

Now days starting a new business is as simple as a mouse click and a few phone calls – Instapreneurs.

Betapreneurs are analysing insights from their jobs and converting these gaps into new businesses.  These founders are imbuing their new businesses with the values of our time. They have a willingness to ‘open source’.

It’s also worth noting that 75% of the fortune 500 companies were started during a recession. (the Kauffman Foundation) So it’s fair to imagine the GFC is going to be the foundation of tomorrows business leaders. 

Betapreneurs are steering old industries into new directions because they have no legacy infrastructure.

Artists are by passing the ‘store buyer barrier’ and going direct. The gatekeeper is evaporating, this is a good thing.

Why didn’t (don’t) retailers have personal shopping assistants? It took Betapreneurs to invent the category. Yet it could be a big point of difference for department stores and easy to generate a solid return on the employees wages. Dear Myer, pay attention.

The Sticky Institute represents zine culture in a way that culture jams the old industry due to a lack of legacy infrastructure.

We should ask ourselves this question:

Do we have Fans or Customers?

The reason brands don’t have the former, should form the initial thinking for their new strategy.

John Morefield is The 5c Architect. It’s a crazy story of just doing and then discovering where it goes. And the kicker is that he isn’t actually an Architect.

New pricing models are being invented by Betapreneurs. Like the following examples:

Lentil as anything – a vegetarian restaurant where the user decides what to pay after their meal.

Restaurants where people bid for the best tables and seats.

Prufrock coffee who created the worlds first ‘disloyalty card’. The card to encourages his clients to sample the wares of quality coffee shops around London. If a disloyalty member tries all 8, he will make you a free drink at his Prufrock Coffee. It might just help them keep Starbucks out.  It’s the community that matters more than the trader. This is the new collaborative world we are in transition towards. A community who vest their interests in each other.

The 80’s and 90’s were the great periods of so called ‘think tanks’. They are now changing into ‘Do Tanks’.  Weekend workshops were products and services are conceived, prototyped and shipped by Monday morning.  Often known as Startup Camps.

Ogilvy UK has started their new idea shop. With a social bent. From their web page it reads: Idea Shop is Ogilvy Group UK’s pop-up ad agency. We give free ideas to small and medium businesses, community projects, arts groups, charities and individuals. We’re nice like that.

Ideas are becoming big business and now they’re often outsourced to fresh minds. Possibly overnight – check out ideas while you sleep.

Brands can’t be a-political, they need to stand for something. Make a call and have a view. Eg Twitter wants to ‘To become “the pulse of the planet.”’ They’re happy to facilitate revolution in Moldova, Iran, Egypt and Libya.

We are starting to understand the bridge between the screen and the real. The two must service each other, not compete or be viewed as separate worlds.

GENERATION D (Digital)

People born after 1995 have never know life without the internet. They’re turning 16 and are soon about to drive cars, enter University, Vote in elections, drink alcohol and enter the worksforce.

We’ve been brought up in a world that was:

-       Pre internet

-       Pre mobile phone

-       Pre Google

-       Pre Social media

-       Pre Wikipedia

They haven’t. Such services and the benefits they provide are expected, benchmark, the way life “is”.

Generation D don’t care if the product is physical or digital. They will pay for stuff that is digital, if its worth the price. Contrary to what we believe the don’t expect all digital things to be free….

If our brands can’t get the latest stuff to them now, then they know who else can. We can’t define how they should shop, or they will teach us the hard way, especially in retail. For example, it’s no longer acceptable for fashion from Europe or anywhere to be a season late. Just not good enough in a connected world.

Gen D’s parents are also excited by new technology. They’re not Luddites and facilitate their kids obsession with the internet and technology.

Generation D don’t ‘network’. Rather, they play and collaborate. Their view isn’t hierarchical, it’s cooperative.

There are 4 million teenagers in Australia. Collectively they have $200 million a month to spend.

-       These teenagers spend 50 hours a week immersed in digital media.

-       65% use the internet to game once per week (boys & girls)

-       They want to be the controller (in life & games Wii / Kinect)

There are 400 million social gamers on Facebook. They want to game and be entertained.  It’s a multi-minded proposition. They can cope with it. They grew up multitasking, multi-channelling and absorbing multiple and disparate messages from every angle.

Ikea’s ‘Easy to Assemble’ sitcom is a great example of brands crossing entertainment boundaries. It’s proof that Youtube channels need to entertain and not just provide information.  It’s really funny, not surprising given it was written by actual, bone-fide comedians. Foxtel & all forms of pay TV should be scared, very scared.

My Damn Channel is great example of the ‘brand ownership shift’ – the middle man is being cut out in almost every industry.

Forget the net – launch with mobile. New parlance to keep in the top of your mind is “Share of pocket”. Our phone is an extension of our brains, our ego and our person.

Often the destination is determined for us. Who is already there, and where can we go on this budget – just like Adioso are doing.

A few words about print… well it wont disappear – just change. Particular niches will continue to pop up and be valuable because the content took time to digest and curate – like And now it’s in print. Because print culture is much different to book culture, they’ll head in different paths. It’s already started: e-books, niche prints.

People might not pay for information, but they will pay for insight. Insight is deeper and more considered. There’s not many substitutes out there for real deep insight. The problem is most people want customer to pay for their information, the problem is that much of this ‘information’ is available in millions of other places free.

People got confused about how to make money out of the internet. They thought we should be able to demand payment. They forgot about demand and supply. Supply doesn’t automatically equal demand – especially financial demand. First value must be created, then it is extracted. It’s the opposite to the previous industrial world of buying and selling. Now it’s proving, then earning.

The future is about the marriage of content and commerce – and content comes first. A nice example is net-a-porter

We’ve created a ‘check in’ culture. Already 1.5 million retailers are using foursquare for profit.

Social media will create a virtual advertising stock market of the future. A live stock exchange of media buying. By knowing where people are, knowing who they are, who they are with, what they buy and do and what they are interacting with – people will sell their attention. It will be flipped where the people opt in to certain information they are interested in. The interactions we have with specific people will be traded on-line in real time.

Some ‘C’s worth thinking about:

-       Create Content

-       Connect through issues and passion

-       Curate the world for the target audience

-       Communities must be facilitated socially

-       Competition – does your brand play games?

-       Context – think time, tone and place.

The final ingredient of the future is passion. It’s the one thing that can’t be outsourced, offshored or automated.

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Winklevoss syndrome

Posted in entrepreneurship by Steve Sammartino on February 18, 2011

You may have heard of the Winklevoss Brothers. They’re two of the luckiest people on the planet. They received a reported $65 million in a settlement from Facebook for essentially having an ‘idea stolen’. Latest reports are that they unhappy with the settlement terms because Facebook has recently been valued as high as $50 billion.I’m calling it Winklevoss Syndrome.

Winklevoss Syndrome = the false belief that an idea is ownable and that the real value of a business is strongly linked to the idea. People who suffer from this syndrome believe that they have some kind of ownership rights to something because they thought of it.

Although Mark Zuckerberg may have taken their idea, but he’s the one who built, it, funded it, promoted it, resourced it and expanded it. I’ll go as far as saying that the Winklevoss brothers are delusional if they believe they had anything to do with the success of Facebook. The idea of a social network has nothing to do with the act of building and populating a social network. Ideas in isolation have no value, ideas once executed ‘may’ have value. It’s also worth remembering that every idea that any number of people could or did have, would always be executed very differently. I think the Winklevoss brothers are the luckiest entrepreneurs on the face of the planet. They received a $65 million dollar gift for an idea and some unfinished pieces of code. They got very lucky they ever met Zuckerberg.

Every fresh idea usually has thousands of entrepreneurs around the world toying with it or building it. Simply because they have foundations in common trends, insight and technology evolution. So next time you see your ‘idea’, being brought to life, remind yourself that you didn’t ‘do’ anything about it. And then resist the temptation to suffer from Winklevoss Syndrome. Instead we should go and build something and see how limited the value of the original idea is.

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The great media rumble

Posted in entrepreneurship by Steve Sammartino on August 8, 2010

The internet has been a boon for entrepreneurs. The commerce said entrepreneurs have created has been one of connection, more than revenue with social media networks being the greatest love child of the internet age. The overwhelming majority of them are free to use, which has resulted in a dramatic power shift in the industrial media landscape. More succinctly social media is very quickly stealing eyeballs from traditional media.

While startups are busy creating the new forums which people connect and entertain themselves on, advertising and media agencies are scrambling to stake their claim on new media. It’s shaping up to be the demarcation dispute of the decade. Both parties believe that social media is rightfully theirs:

Media Agencies claim it is ‘Media’ and so their clients should engage them strategically.

Advertising Agencies claim it is ‘content driven’ and so their cleints should engage them straetgically.

What’s clear is that is isn’t about to go away and it will continue attract larger percentages of the marketing budget as time progresses. And just in case your wondering what I think about social media and who rightfully owns it, my viewpoint is very clear and is given below:

Just like any emerging technology or industry, no one rightfully owns it. It’s up for grabs. The companies (new or existing) who move into the space the quickest and add the most value will take home the trophy.

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Media Exponential

Posted in entrepreneurship by Steve Sammartino on July 12, 2010

The speed at which media consumption has grown is mind boggling. So I thought I’d pull together a little info graphic titled Media Exponential using my Artline 725. Makes you wonder what’s next? Answer = what we create.

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Micro Fame

Posted in entrepreneurship by Steve Sammartino on September 19, 2009

Recognition of effort is an important to the human psyche. We actually don’t like money as much as society would have us think. We what like is the recognition that people believe money buys. In this sense the human brain of the ‘uber consumer’ breaks it down a little like this:

I want to be recognised as a worthy

I want people to know I have achieved

If achieve I will be rewarded with payment in the form of money

People can’t see my bank account and wont know how successful I am (my self worth)

So I’ll buy things with my money which are on public display (car, house, holidays, clothes)

People will know these things require lots of money

People will know I have earned lots of money

Only people who are successful at ‘something / anything’ get lots of money

I can be happy that people will know ‘I am somebody’.

I am a worthy person

Then there’s people who know all this but take the short cut and just buy stuff they can’t afford on credit cards to define their success through consumption.

Smart startupss can use this human pshyche to their advantage as well. Rather than the success, money consumption trail, they can provide something much more immediate and altruistic. They share reconigition. The reward and promote their people as part of the success process. They provide micro fame.

This can be done is so many simple ways. Ways which rarely have a large financial burden on either party, but create a union between the two players for mutual benefit. Stuff not limited to but including:

- Member ratings

- Access to exclusive services, parties, insider events.

- Recognition in digital and print media

- Crowd sourcing & revenue sharing of such User Generated Content

- View counts

- Followers / friends / subscribers

- Most forms of social quantification

- Overt branding which has ‘user personlilty rub off’

obama girl

So the question then begs:

What sort of Micro Fame is your startup or business providing its people?

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Social media – Numbers are irrelevant

Posted in entrepreneurship by Steve Sammartino on August 4, 2009

I saw this little 1 minute video from Seth Godin (Who I used to worship, and now just ‘like’) and had to post it here. Be sure to read my comments below the video.

Why the numbers are irrelevant to me….

  • My blog has few promotional elements on it (they’ll find me if I deserve it)
  • I only follow people on twitter I know. I want a conversation. Mind you if you @sammartino at some point I will follow you…. yes I’m interested in conversation.
  • Quantity loses to quality every time. Scores are misleading. Numbers are pointless.
  • Yes you can meet people on line and then create strong physical friendships. I have many times.

In summary I’d say this. If it doesn’t make sense in the real world (physical life) then there’s a good chance it doesn’t make sense on line. In ‘real life’, that is our off line life we think of our friendships and even business contacts in terms of quality. We don’t go around trying to make 1000 friends and wear a t-shirt that says ‘I have 1000 friends’. Rather, we prefer to have strong meaningful relationships which are one on one. Where both parties benefit. We don’t have a list in spread sheet with the people we’ve met. Sounds ridiculous doesn’t it?

Startups should be using social media to build relationships – not gathering numbers.

From now on I’ve changed my twitter link below on my blog posts. Can you see the change?

I am on Twitter Click here to chat with me


Free – is not a business model

Posted in entrepreneurship by Steve Sammartino on July 2, 2009

Firstly – I’ll start by saying I think Chris Anderson is an incredibly clever guy. I thought his book ‘The Long Tail’ was and is the future of business. But when it come to ‘free’ he has got it wrong this time. As has Seth Godin and all the other ‘free’ converts.

As Malcolm Gladwell correctly points out, they are forgetting many of the fundamentals in business, by getting caught up in the stale newspaper argument, which in the new digital economy, is the easy and soft target of who will disappear. The irony of this ‘newspaper’ argument is certainly lost in the broader economy. The non digital economies are a lot bigger than newspapers and other beleaguered digital industries.

Picture 15

So why is it that ‘Free’ is not a business model. Quite simply, any business without a revenue generation model wont exist over time. We only need look at the the dot com bust of the late 1990’s to see this reality. It’s also much too easy to get caught up in the success of Google and others which ‘started free’ to build demand. But many of the subsequent ‘Free’ offers like Youtube, Facebook, Myspace, Flickr may have been successful for the owners, only because they sold to a business with a large chequebook – not because the business itself was financially successful. The Google business model is not too dissimilar to that of Network TV – generate eyeballs, sell advertising….. Nothing new here.

The real question in the so called ‘Freeconomy’ is how many businesses can be supported by the advertising sales model? So why the idea of ‘Free’ is being touted as new is beyond us here at Startupblog.

Here’s what ‘Free’ really is – it’s part of the marketing mix. It’s the 4th P – Promotion. It always has been and always will be. Anything a company gives away for free is a promotional tool to sell something. If these businesses who use the so called ‘free model’ fail to sell something there are only two options for them as time passes:

  1. Go broke & run out of cash
  2. Get bought by large company who values what they have created, albeit ‘non-financial’

Whether it be Proctor & Gamble, giving free shampoo in letter boxes in 1957 or Google giving free search and maps in 2009. It’s part of the mix to attract potential customers, who will be converted into on going revenue. It isn’t free. Free is not a business model, moreover it’s sampling & promotion for associated revenue generating activities. So to call it the future of business as ‘free’ is absolute folly.

Sure Anderson can argue that digital stuff is becoming so cheap it may as well be free – as per the transistor example he uses. But the thing that really costs money is building demand and infrastructure – the kind of stuff that’s really expensive. The other point to consider is the example of some things which previously cost money (a newspaper) is now available free on line, doesn’t mean everything is heading down the free path. Rather it means that certain industries are dying – not that ‘paying’ will be a thing of the past. In fact there are just as many examples of items which were once free, consumers are now being charged for Education, Toll roads, Water, Seeds.

The advice I’m giving here is simple.

No business can survive without revenue. Free, isn’t free, but a promotional expense, the 4th P. If your industry is getting flooded with free – it’s on it’s deathbed – look elsewhere. Industries die all the time when the revenue dries up just like those trying to cope with the current digital conversion. Don’t assume you can build something awesome and give it away with the ability to sell it (the business) or something associated later – chances are you’ll run out of money before that.

The future of business isn’t Free, and the idea isn’t new, it’s part of a complex marketing mix. And if you want to own a startup to thrive, my advice is simple. Have a price which isn’t all zeros.

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