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Rising Power Of Free

2 min read
Kevin Kelly is out there.  I mean, in 1984, he was talking about the power of networks.  And you know, few years ago, KLM invited him to speak to their leadership and he talked about making their airline seats free!   He even quoted his book, New Rules For the New Economy:
As crackpot as it sounds, in the distant future nearly everything we make will (at least for a short while) be given away free—refrigerators, skis, laser projectors, clothes, you name it. This will only make sense when these items are pumped full of chips and network nodes, and thus capable of delivering network value.
After the talk, one of the top execs of the company tells him bluntly, "This is the most ridiculous talk I've ever heard."

Except that, couple years later, RyanAir did exactly that.  And over the last decade, they've posted 25% growth each year and now, more than 30 other European airlines are following suit, offering airline tickets as cheap as five pounds!

All commodities heads toward free (as they have for century and a half).  Yes, really -- a century ago, raw foodstuff was 20% of consumer expenditure; today it's 4%.  And Kevin is simply extending that by saying everything we make will be commoditized and head towards free; the value-add economy will be for the "luxury" services.

Kevin is usually spot on, but almost always ahead of his time.   On the other hand, Chris Anderson -- the author of Long Tail -- tends to be on time.  Working on his upcoming book titled Free, he's frequently throwing out the term we live by -- "gift economy." :)

As Chris trying to sort of the complications behind "free", there seem to be  three primary categories for "free":
  1. Free to one, charge to another: Just like basic TV, Google is free to consumers, but they charge the advertisers. 
  2. Free things, charge for services:  Your cell phone, airline seats, and coming soon -- free cars!
  3. Truly Free: Wikipedia is free, large part of craigslist is free, everything CharityFocus is free.
So free is in, free is hip, and people are forced to ask the question, "How can I make it free?"  That is, how can I give it away?  Exciting times of transition  into deeper wisdom. :)

Still, this is an age-old, indigenous idea.  We're merely seeing its infant possibilities because of the connectivity that the web has manifested.  What the sages have seen, and in part, what moves us to be free, is a network that connects us all -- without the Cisco routers. :)

Posted by Nipun Mehta on December 1, 2007
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Community Reflections

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3 Reflections shared

rahul Nov 30, 2007
This idea even has support from traditional microeconomics. Something called the Zero-Profit Theorem states that as knowledge of the market approaches 'full knowledge', economic profits for suppliers approaches zero, and that this is in fact the equilibrium point of the market. That's a convoluted way of saying that no matter what you produce or supply, you make the same amount of money. Since profit maximization becomes meaningless, one would instead maximize happiness or well-being by what one produces [the economic theory doesn't mention this, but this is of course the natural conclusion for the individual]. BTW, RyanAir is a horrible airline, and they've grown dramatically because new customers don't know that until they fly. I would guess that this type of player in the gift [...]
Lorena McCree-Cheatham Dec 2, 2007
"Free," is a form of empowerment if you research the information that is being labeled as free. You can gain the free information resources but how will you use that information to better your own situation.
Matt Dec 2, 2007
Interesting topic, and the RyanAir business model is definitely an innovate one. You lay out some interesting examples, but I am not convinced that free as defined here is necessarily a good thing. Water is often times free or very cheap. But, this leads people to treat it like it worthless and over use it. Free=spam. If email cost even a penny an email, there would be no spam. While free email is great, I wouldn't mind spending $5-10 a month if I never had to look at another spam email in my life. I am not so sure that commodity prices are headed to zero. Oil prices and other energy sources are going up, and this will lead to other commodities becoming more expensive as well. While food has gotten more inexpensive in the US, it is not clear that is necessarily a good thin [...]

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