What Drug Dealers can Teach us About Free

Free has worked as a great business strategy for drug dealers for ages. Give them the first taste for free, get them addicted, they will come back for more and be willing to pay for it. Unfortunately, I’m not selling drugs.

Free can only work, as drug dealers have taught us, when it is backed up by some other way to make money. When it is used as a marketing tactic and not as a business model. Because, it turns out, when given the option of paying for something or getting it for free, most people (and some businesses) pick free. Not Free, just free. And not just free beer, they want mixed drinks.

This free marketing tactic used for the one thing has to support the paid business model of some other thing. Otherwise there is no revenue. Revenue. It is not evil or bad or republican to want to make money. It is what allows my company to pay me (and many 1000s of others). This is not evil. It is good. Good Witch of the North good.

Free has been enormously successful for many businesses to drive adoption. But free is just the first half of the equation. It goes like this. Give something useful away for free and people will pay for this other thing in order to do more, get more, run more, be more. Problem is the second part of the equation where at some point someone pays someone for something.

The problem for businesses is that we can get what we need for free and we can support ourselves through our extended communities online and offline, and we hardly need to pay for anything anymore. Which is great for us as consumers, but not for us as companies and not for us as employees of those companies.

No, I don’t really believe that free is going to go away, but more focus is going to have to be put on the second half of that equation where someone pays for something. We are emerging flushed and fulfilled from the Consumer Age of Free. Time to batten down our wallets, I believe we are about to enter the Impulse Age of Cheap. We got our first taste for free, but now we are addicted. Pay up.

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11 responses to “What Drug Dealers can Teach us About Free

  1. Thanks to Hugh for referring! Great re-start.

    I think trading is a good way to go. Makes it more personal, not scalable easily, but more rewarding maybe.

    Peace.

  2. Daniel, I completely agree. I think barter is a great system.
    Peace out!

  3. Pingback: tecosystems » Google and the Case for Telemetry: What Vendors Could Learn

  4. But Sara, dear, I’m not sure who would argue against what you’re saying. I can’t think of a single credible person who argues in favor of giving away everything for free.

    What I’ve argued in the past is that when there is an abundance of something, in this case software, the price tends to go down. What your employer has discovered, IMHO, is that some things that used to require payment have now moved into plentiful commodity territory – the bar has been raised.

    Fortunately, you have a veritable arsenal of things people will continue to pay for, now and in the future – look for a turnaround at $COMPANY by 2010.

  5. John Mark,
    No need to be humble. 🙂

  6. Free is cool so long as it doesn’t transform INTO un-free. Like gmail for instance. It’s awesome, and it’s free. But what if three years down the road it becomes part of an overall subscription service, and in order to access your gmail account, you now have to pay?

    This has happened before. Hotlinks, for instance, provided a service similar to the gmail bookmark toolbar (and other now free toolbars). You could store your bookmarks online and access them from anywhere. Not a big deal nowadays, but when it first came out in the 90s, it was new and cool and FREE. Until the dot-com crash. Then they needed money.

    So, Free is cool – but can you trust it?

  7. Check out Freakonomics by Steven D. Levitt and Stephen J. Dubner. They ran the numbers and found that drug dealers only make about $3.30/hour on average (http://freakonomicsbook.com/thebook/ch3.html). Indeed, we are talking about the age of cheap. 🙂

  8. Are you aware that you are now on the wordpress list of fastest growing blogs? Yay you!

  9. Nothing collapses an economy better than dumping free goods on its markets – why do you think aid hasn’t solved the Third World’s problems?

  10. Pinnythewu, Yay me. I didn’t know. Thanks. Any idea how that list is compiled so I can continue to feel good about myself?

  11. Years ago I would avoid “free” as it would inevitably mean “this is gonna cost more than if I had just bought it to begin with”. Nowadays though, “free” stands on its own. Much different than how it used to be.