Practical Wisdom from the Entrepreneurs Creative Edge by William Reed

Scarcity is one measure of value, and rare things fetch a high price. The opposite of scarcity is abundance, and things which are readily available tend to be sold at low prices as commodities, or can be had for free.

Over the last ten years, systems for delivery of information and media over the Internet have brought the world to our fingertips. Information, advice, expertise, many things are now free, that used to cost money or be hard to get.

Watching a video on YouTube is not the same as seeing it live. Many of the things that we consume in digital form may not measure up to the experience of having it in your hands. Nevertheless, an increasing number of people are now opting for the free virtual substitute, over the expensive real deal.

Bonus offers have become so common that they have created the expectation that things should be available for free. Why should you pay money for something, when apparently you can get something similar for free? That makes good sense to the consumer, up to a point. But what happens when the bonuses turn into a bonanza? You may find yourself with fistfuls of Monopoly money, but no place or time to redeem it. Plenty of books on the shelf, but most of them unread.

Free is not just found online. It is a phenomenon that has creeped into the way that virtually everything is sold. This phenomenon is described in detail in the bestselling book, FREE: The Future of a Radical Price, by Chris Anderson. The author describes Free as a phenomenon that is redefining markets, and which is virtually unavoidable and unstoppable. Companies are competing with what he calls Freemium tactics, offering products and services which are free for a limited time, free versions with paid upgrades, free to the first number of people who sign up, or free to certain types of customers.

Computer and software manufacturers, cell phone carriers, casinos, magazines, and malls are competing to attract customers by offering products and services for free, or by subsidizing some services in order to sell others. This has been driven by a number of factors, falling prices, abundance of commodity parts, and a runaway piracy economy.

Apparently, not everyone is sold on free. The downside of free is that there are often strings attached, hidden costs, and compromised value. Free is often a Trojan horse for advertising, a way that marketers use to break down your defenses and get inside. Perennial proverbs tell an old story: there is no free lunch, and you get what you pay for.

Free is very attractive, but it is no place for amateurs. Businesses competing for customers can slash prices until they practically end up giving away the store. If they stay free of profit for too long, they will be out of business. Prices have dropped for seminars and speakers, as trainers too get caught up in the free frenzy, promoting themselves into oblivion for free.

Where will it all lead? Can a free economy really sustain itself? How long will it take before customers and clients realize that free is not what it appears to be?

The big question to ask is, what is on the other side of free? As a consumer of content, look for the real value in free. It may not be manifest unless you invest time, attention, effort, or money to make it yours. As a provider of content, continually seek to create, deliver, and improve the value that you offer. In a world where advertising dresses as free content, which turns out to be content free, seek to be the real deal.

Learn to leverage that which is free into that which is truly worth the time, energy, and money that it costs. One measure of value is the return on investment. Nothing is worth it simply because it is free. It is only worth it if it gives you back more than you put in. Until you put something in, you cannot expect to get anything out. The reward is in the return.

Next time you go bargain hunting, take a good look at what you are really getting in return.

William Reed

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