Learn and Lead

About continual learning and leadership

Is Free a Concept that Works Only in Abundant Economies?

I have been quite enamoured by the whole open source, free software concept, coming to believe that companies can make money by giving things away for free. So when Seth Godin wrote about two lemonade stalls applying different business models, it made perfect sense. There's one stall selling lemonade at $1 per glass and another giving it away free with a tip jar. And the little girl giving away free lemonade made a fortune in tips. But then I wondered what would the situation be for the two stalls if they were located on a roadside or on a street in an Indian city or town. Would the stall giving away free lemonade still make money? I am not quite sure if it would (it might be an intersting experiment to do though). Which makes me wonder if the whole "free" concept is primarily a concept that works in economies of abundance. Would this work where the primary customer doesn't really have cash? What do you think?

2 comments:

Yogesh Malik said...

Free concept is wonderful. In the opensource world you give it free so that people who want to start off ( or try out )without putting any money in to it. You can always ask price for premium features and support, which is essentially customer experience and than counts more than the product itself. People are always ready to pay for the customer experience after you buy the product, it could be indirect. Like you get audio book free, that may lead you to buy the print version. Or you sell your product free but you generate money from the clicks on your website. Geographies and economies are mostly irrelevant here.

Manish Gupta said...

Hi - I think it's about the value one is willing to assign to a particular thing - be it a glass of lemonade or a software product. If one sees value in something, then they would for sure shell out money irrespective of first, second or third world.

And the best example of this would be our temples - Tirupathi or Vaishno Devi may well be the richest religious centers in the world - visit is absolutely free - nobody forces you to pay, and you pay only what you want to.

I think, we as a society value religion more today - the day majority of us start valuing productivity gains from open-source software products - we would start paying handsomely for them as well.

My two cents :)

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Disclaimer: The opinions expressed here are my personal opinions. Content published here is not read or approved in advance by my employers and does not necessarily reflect the views and opinions of my employers.

Creative Commons License This work by Manish Mohan is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 India License.

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