If someone offered you a widget for free would you try it and then if you wanted a bigger widget later you would have to pay for it or if you wanted 1000 widgets later you’d have to pay for it would you agree to the deal?
I started thinking along these lines when I came across Fred Wilson’s blog this morning where he pointed his readers to a great article on Wired today, “Free! Why $0.00 is the future of business”. It’s a decent article, well worth a read. The money quote for me is where he takes on Milton Friedman’s “No free lunch” concept, with “a free lunch doesn’t necessarily mean the food is being given away or that you’ll pay for it later — it could just mean someone else is picking up the tab”.
I’m a big believer of heavy users should offset costs for lighter users, in society as well as in business. Making things free for basic service and asking the market to pay for premium services works. 37signals.com is a great example of this, I’ve used their basecamp and tadalist services and worked on projects where we had the premium version.
One thought, London could give free tube rides from 10 – 4 during the week, this would increase tourist spend in London and the commuters could offset this. You’d also be less likely to get tourists holding commuters up on a daily basis. From a market and supply side this concept makes a lot of sense. Why more business and societies don’t use free or the freemium business model more is beyond me. Free can be a great business model, just ask MySQL.
