Post on 13-Jun-2015
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The Danger of FREEAlex Iskold
Founder/CEO AdaptiveBlue
Can FREE Backfire?
Example 1:
Open Source Gone Wrong
What is Open SourceSoftware?
Movement to make code accessible
Does NOT mean software should be FREE
A lot of followers and passionate believers
Success stories: Mozilla, Apache, etc.
Fine Print:
Kills off the competition by making basic Java software development tools FREE. Up sells WebSphere, Blades andconsulting.
The Aftermath:
Small Software Vendors are now extinct. Mediocre tool dominates the market. Lack/barrier of innovation.
Example 2:
Using Free toEnter the Market
Freemium Model With Low Free Storage
Entered the Marketby offering much
more for Free
(ad click-through: ~0.2%?)
You can argue that GMail issupported by ads, but what
about Google docs?
1. CompletelyFree
2. Funded by adrevenue
3. Competes withMicrosoft Office
Is this fair?
has
has wants
wants
You Are Welcome!
Example 3:
The AdvertisingSupported Business
Advertising: the 3rd bodyin the 2 body problem
B
C
BC
A
1. Complexity:Before: Business <=> CustomerAfter: Advertisers <=> Business <=> Customer
2. Overhead:
Need to learn the intricacies advertising.
3. Challenge:
Serve 2 masters: Consumers and Advertisers
Example 4:
The Moral Implicationsof FREE
FREE Things create sense of entitlement and shift in values.
Will they work as hard as their parents?
Discussion
Does FREE create a barrier for innovation?
Does FREE aid unfair market entry?
Does Advertising make businesses more complex?
What are the moral implications of FREE?
Alex.Iskold@gmail.comhttp://twitter.com/alexiskold
http://ReadWriteWeb.comhttp://GetGlue.com