• Hi, I’m Brad Abare

  I'm a make-it-happen guy working with big idea people. I design teams and orchestrate strategy so that great ideas I believe in get done.
  
  I am Jamaica's husband, Foursquare's comm director, Personality's founder, and a catalyst for CFCC.
  
  
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Chris Anderson’s latest book, Free: The Future of a Radical Price, is a great read. The content is intellectually stimulating and compelling.

The main tension that Free seeks to address is that “people are making lots of money charging nothing. Not nothing for everything, but nothing for enough that we have essentially created an economy as big as a good-sized country around the price of $0.00. How did this happen and where is it going?”

Although Free often reads like an economics textbook, Anderson is making his case primarily to spur Free money-making. “Today the most interesting business models are in finding ways to make money around Free. Sooner or later every company is going to have to figure out how to use Free to compete with Free, one way or another.”

“While the last century’s Free was a powerful marketing method, this century’s Free is an entirely new economic model.

“The atoms economy is inflationary, while the bits economy is deflationary.”

Unpacking the idea of scarcity was the big lesson for me in this book. “If a resource becomes too scare and expensive, it provides incentive to look for an abundant replacement, which shifts demand away from the scare resource.” Think oil and the race to find alternative energy solutions.

Value moves to things that are not yet commodities. “Today’s knowledge workers are yesterday’s factory workers (and the day before’s farmers) moving upstream in search of scarcity.”

“Memorable experiences are the ultimate scarcity.”

“We are motivated by what we don’t have, not what we do have.”

Anderson talks about selling into the future to get ahead of the price decline curve. “Rather than sell [something] for what it costs today, you can sell it for what it will cost tomorrow. The increased demand this lower price will stimulate will accelerate the curve, ensuring that the product will cost even less than expected when tomorrow comes. So you make more money.”

“It turns out that our feelings about ‘free’ are relative, not absolute. If something used to cost money and now doesn’t, we tend to correlate that with a decline in quality. But if something never cost money, we don’t feel the same way.”

“The biggest gap in any venture is that between a service that is free and one that costs a penny.”

Google’s “max strategy” for information markets was also interesting. “Take whatever it is you are doing and do it at the max in terms of distribution.”

Free has the power to disrupt markets by shrinking them. Encyclopedia Britannica went from a $650 million business to less than half that when Microsoft launched Encarta. No longer were Britannica salesmen needed to sell $1,000 encyclopedia sets when you could get Encarta for $99 on a CD-ROM. Then Wikipedia came and wiped out both of them.

Anderson summarized French mathematician Joseph Bertrand’s philosophy by saying “In a competitive market, price falls to the marginal cost.” In other words, when the marginal cost becomes free or close enough to it, the price you charge will hover at the same amount: $0.00.