the business of free gbenga kogbe. something wrong here!

The Business of Free

Gbenga Kogbe

Something wrong here!

“Business is Booming”

Tony Rabbits who runs the Four Crosses in Cannock

Free v1

• Buy 2 get 1 free

• Free cell phone

• Media model (advertiser pays)

Free v2

• Digital economics

• World of zero (marginal) cost

• Access to global community

Disruptive!

“If we’re successful, we would fundamentally change the operating system market,”

Mark Shuttleworth, the lead evangelist for Ubuntu Linux

Where is the freedom?

• Data freedom

• Freedom of tools

• Interface freedom

How much is enough?

Income vs. Impact

• For profit

• Non-profit

• Not only for profit

Focused or Hybrid?Business Models

• Freemium• Value add• Platform• Segmentation• Third party “partnering”

Freemium

Up-sell model× 0.1% of 10,000 = 100.1% of 100,000,000 = 100,000

E.g.

Some pay for an upgraded service!

Value add

• Value add (what else can we provide)• Services (OS Model)

• Reputation• Complements• Customisation• Consulting…

E.g.

pay for added value

Platform Play

Ecosystem of businesses• Help others make money• A small/big slice of the pie

E.g.

Figure out how to get a cut of value created

Segmentation

• segregation model– Corporate/Personal– Industry groups– Academia/Business

E.g. craigslist,

Craigslist founder Craig Newmark with CEO Jim Buckmaster

Charity Model

Donate!• Active Fundraising• Volunteer based

E.g.

Paid for social value

Third Party Funded

• PCs Dell

• Searchers Google

Someone else pays (not only advertisers)! Users pay nothing…

$

$

$

$

Firefox

Ubuntu

Revenues: $30 Million

Market Share Summary

Global: 20%

Europe: 30%

Implications of the New Free

• Business cost structure

• Strategic Alignment

• Challenges of Scale

Free Models

• Freemium – users pay for more

• Value add – users pay for something else

• Platform – paid for delivering ecosystem

• Segmentation – only some users pay

• Third party pays – others pay for users

• Charity – please donate!