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!