How Fast Can You Get To Free?

by Jay Deragon on 05/28/2008

The faster a business can get their products or services to a price of “zero” the more money they are likely to make in The Relationship Economy. This perspective is emerging as the new Socialutions theory driven the current digital economy.

The digital economy is driven by the dynamics of free technologies that are and will continue to disrupt traditional processes that support or create commerce.

The Socialutions that create the greatest value for a business are the processes centric to maximizing consumer and business value by reducing waste and providing more time and value for free. Social technologies that flatten production, distribution, and communications are the driving forces to “freeing up time” by eliminating historical waste.

Waste surrounds us everywhere and is a by-product of past management models designed around old command and control mindsets. Control is based on an assumption of scarcity of knowledge and trust. Command is an old model based on the psychology of power contained by the few which assumes more power can be gained through command and control.

Is It a Change in Assumptions?

Chris Anderson of Wired Magazine writes: “It took decades to shake off the assumption that computing was supposed to be rationed for the few, and we’re only now starting to liberate bandwidth and storage from the same poverty of imagination. But a generation raised on the free Web is coming of age, and they will find entirely new ways to embrace waste, transforming the world in the process. Because free is what you want — and free, increasingly, is what you’re going to get.”

To assume that “free” will not last as a business model is like saying your business doesn’t need customers to survive. The free model introduces a set of new assumptions including:

  1. The cost of production will continue to decrease
  2. The cost of distribution will continue to decrease
  3. The cost of communications will continue to decrease
  4. Marketing and Public Relations is a by-product of communications with new rules for creating attention
  5. The cost of labor will go down while the scale of output will go up

Maximization of resources, technology, knowledge and relationships will be the four primary elements required to make money from “free”. By maximizing these four elements you create new value centric to people’s needs and wants. It is this new value created that enables businesses to make money from the free because the free begets the attention to the value which people will gladly pay for. Not only will they pay for the value but they will tell everyone how much value they also received from the free/

Don’t believe it? Stand by and watch other businesses that not only believe it but are living it to the benefit of their shareholders. Have you checked Google’s stock price lately?

What say you?

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