Monday, February 18, 2008

Better Than Free

We all know that the Internet enables us to replicate and duplicate information at warp speed and at virtually no cost. So what does that mean to organizations whose business model includes the sale of information? How can you possibly continue to sell something that people can get for free on the Internet?

According to Kevin Kelly, author of The Technium, the more abundant information becomes, the more valuable the intangibles - such as trust, personalization, and interpretation - become. Kelly calls these qualities generative values. He writes, "A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated uniquely, in place, over time. In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold." Read Kelly's article, Better Than Free.

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At 7:56 PM, Blogger Misty Garrick Miller said...

Wired has an interesting article this month called Free! Why $0.00 Is the Future of Business by Chris Anderson this month (I'm a subscriber, but you can also read it online for, you guessed it, free).

One of the key points was that cost can't be defined in terms of money alone:

"There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today."

So, the information you have has basically become a commodity. You can give it away, but the real value is in the analysis. You sell the analysis, the connecting of the dots, which saves the customer time. On the reputation angle, your customer can really only have a limited pool of sources that can be trusted, as Kelly points out. You might not make a profit by doling out the info now, but you can use being top of mind to make it later.


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