Can Free Produce Revenue?

by Jay Deragon on 06/04/2008

Many people get perplexed as to “how” free can produce revenue. Traditional mindsets view the social web as a “mesh” of communicatons in which the only revenue model is advertising.

With the old web based advertising models now proving ineffective the media is quick to suggest that all this “social networking” is coming to a fork in the road. Those that quickly learn and capitalize on turning free into revenue, besides ad revenue, win and the others lose.

What Isn’t Free?

With all the free access to social media, social tools and people to connect with we get used to “free” and expect it. As soon as a platform tries to institute subscriptions we reject it because similar functions and features are elsewhere for free.

Even knowledge is free. There is an abundance of “free” knowledge about anything and everything. Social tools aimed at helping people and organizations find relevant information and new knowledge surrounds us. With the explosion of advanced “social technologies” the price of this knowledge is the learning curve which takes time and attention, two things that are scare for everyone.

While the access to the knowledge is free the acquisition of knowledge cost time. The acquisition of knowledge is also used to mean the confident understanding of a subject with the ability to use it for a specific purpose. The specific purpose being sot by everyone is “how” to turn free into revenue.

Are The Answers to “How” Free?

Those things that are scare in the “free” market are those things that represent the greatest value. You can charge for value or earn revenue by enabling others to earn revenue from free.

Google earns in excess of $4 Billion a year providing free technology that enables others to create revenue. Googles earning come from the power and value of enabling others to generate revenue. 99% of what Google offers the market is free while 1% of their offerings are aimed at enabling people and organizations to generate revenue.

Just having the knowledge of “how” free works doesn’t mean an individual or organizations knows “how to use the knowledge” for their benefit. The difference between gaining knowledge and using it is the answers to “how”.

For business the Socialutions path to revenue lies in the answers to “how” to use “free” As an example:

  1. How to increase customer satisfaction
  2. How to create market differential
  3. How to lower operating cost
  4. How to increase sales
  5. How to create new markets
  6. How to be “social”
  7. What free value would create the most revenue

The list goes on and on representing normal questions business leaders usually ask themselves regularly. However the system of creating value has changed and the path to revenue lies in two new dynamics and the knowledge of “how” is the value which seems to be scarce. The dynamics are “Free and Social” but the business mindsets are locked on revenue and anti-social processes chasing revenue.. Time to set your mind “free” and learn to be social and produce revenue from free.

Get it? What say you?

{ 1 comment }

Nicholas Young June 4, 2008 at 8:42 am

Free can produce revenue, especially in the case of social networks, and peer to peer protocols. Anywhere that data or other information is stored, there’s a potential source of revenue.

When people share, it creates buzz. Buzz, that if your business can tap into it, and become the very sound itself (or at least a side channel) you’re in.

I’ve wrote more about this over at http://ArtistOneAnalytics.com .

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