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Actually, I have to admit this is not something we have never used before... but I dont think just because a lot of people are already participated in it makes this any less important.

so this is my post from 2 weeks ago:

In lieu of time, I will just quickly roll over point 3 from exhibit A, Embrace market mechanisms (Giving stuff away rarely works as well as
selling it.)

I am convinced, and so are others, that this does not hold true. While it is important to embrace market mechanisms, there are a lot of examples, that giving stuff away does actually comply with market mechanisms.

If you buy 2 iced teas for the price of one, the price of the second tea has either been worked into the first product itself and it provides an incentive to actually buy the product itself or it is a promotional campaign for new products.

However, the 'buy one get one free' thing barely scratches the surface.

But in a lot of cases, giving one thing away actually helps sell another, while with Google, giving away search results for nothing (at least nothing monetary) made them into a multi-billion (advertising) dollar company (which I doubt would have happened if they had charged for results).

Also, hostels give away wi-fi to attract backpackers who wish to tell mum they are fine by email to stay the night and pay for room and board.

Chris Anderson of Wired Magazine has written a great book about this: Free - the future of a radical Price, which coincidentally is available FREE for download as an Audiobook. Of course its also available in print - just not free.

Anderson, who I have also chosen to cover as my 'hero', takes a thorough and creative look into a wh*** economy built around the price of zero.

While most of the things he covers will not apply to or help African economies (which I believe to be in some way the point of the assignment) directly, better understanding the web and what Anderson calls 'the bits economy' means better understanding human desires and networks, and if that leads to understanding humans just a tiny bit better, it is worth more than just some attention.

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Comment by Simon Brookes on March 19, 2010 at 10:30am
Thanks for this Agent Lampe. I'm interested in this "price of zero" concept. I wonder if you can stretch the paradigm to fit some of these massive problems that the EVOKE network are looking at though Lampe. We need to look at "ground-up" solutions and a massive part of this is recognising that we need to apply the rules of economics, social-psychology, market forces and good, solid, business-principled thinking to them. I'm giving you +10 for knowledge share and hope to encourage your thinking in this direction. Great work.

Comment by Jan Lampe on March 19, 2010 at 2:51pm
thank you for that, simon. i would award you +10 THX if i could ;-)

your are correct in thinking that these priciples should be applied, but i think evoke is already applying some of those - after all, the wh*** thing is free and without ads (granted that it couldnt be if not backed by the world bank) and only rewards participation in social capital and some imaginary 'game points' thus still creating a large network of creative thinkers.

As for the application to evoke, i have contacted chris anderson, and we will see what he thinks - hopefully.

but continuing thinking in this direction, i will propose a challenge about extending the reach of the evoke network soon. since you seem to have some sort of influence in the network, id be delighted if you could share your thoughts.

Comment by Simon Brookes on March 19, 2010 at 2:56pm
Let me know when you move things on then thanks Jan.

Comment by Shakwei Mbindyo on March 19, 2010 at 3:04pm
+1 KS. I wonder why "...most of the things he covers will not apply to or help African economies". Guess I will just have to download the ebook and find out :).
Comment by Ng Zhilong Jerome-Christian on March 19, 2010 at 3:27pm
Hi Agent,

Thanks for you thoughts.

I don't quite buy your reason for 'Giving stuff away actually works.'

Firstly, in your example about ice tea and promotional products, this is really working on the insufficient knowledge consumers have about these products, hence they are sold in this manner. Since in this case, the supplier has better knowledge about the product, he is able to make better profits out of the consumer.

Also, should this model be used in helping with food shortage, it would mean that food will be provided at a price that the supplier wants and the people will not be able to get the most of whatever money they have to purchase it.

Secondly, in Google example, if thought of simply, Google really is a middle man. What it is selling is a route for companies to find possible buyers. By providing a free search service, we, the users, have become the supply that Google uses to earn revenue. Google is really 'buying' this supply by providing it's search functions.

Of course it is unarguable that the freedom to search has benefited all of us tremendously.

Comment by Jan Lampe on March 19, 2010 at 4:52pm
Simon - as promised, im updating you on my challenge (for some reason i can not write on your wall) - its called EVOKE others! and it is also on the alchemy blog now.
looking forward to collaborate!

(others check this out too - i think its a great idea)

Shakwei, most of the things he talks about work well online but are impossible offline for reasons he explains in the book. (be advised: its not an ebook, although you can read it on scribd: http://www.scribd.com/doc/17135767/FREE-by-Chris-Anderson

Jerome, while i do not really understand your first point (more profits for the seller means that it might just work better than selling just one bottle, which is basically what i said) i do understand your concern about food - i am actually not sure if or how the concept could be applied on a large scale to feed millions, but i will let everyone know as soon as i figure it out. i have contacted mr. anderson and am awaiting his response.
And with Googles market share above 90%, i prefer to think of it as the connecting entity between suppliers and demand.

All of you, thanks for the feedback.
Comment by Greg Stevenson on March 24, 2010 at 9:28pm
I follow seth godin who is on a similar tack.
Comment by Turil Cronburg on April 12, 2010 at 10:51pm
As far as free food goes, there are plenty of cases where it makes sense to give away food. If it's going to rot before you can eat it, because you have too much, for example. Give it away to others who need it, and then they will see you as generous and be more inclined to help you out when you need something.
Comment by Sarah Shaw Tatoun on April 12, 2010 at 11:10pm
I agree. A lot of internet marketing businesses in particular are built on free material. If it weren't for the cost it would probably be a lot commoner in off-line businesses too.
Comment by John D. Boyden on May 10, 2010 at 3:59pm
good discussion. Grabbing some URLS. A well wriiten article to jan, it has me thinking! +1 E


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