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Monday, April 23, 2012

Capitalizing On Free


Free is a strong resource in this emerging economy. Since we have access to all the buyers, free is a good way to get more of them to focus on our offer. How do we then create value from free?

I’m an old time Rock ’n Roller, and I’m giddy with my ability set up set lists of the bands I listened to and even played with on Spotify. Thanks guys! I ‘m joining friends I haven’t heard since 8 track.

Best thing I learned about my bands from 30 years distance? We just weren’t that good...and it shows. Couldn’t hear that at the time.

Last week I was talking with a veteran pre-sales software engineer in New York. His work is over, from a different business paradigm, but he now has a steady stream of cloud startups asking him to demonstrate and sell their new stuff. Since their offer is for free, he should work for free. He didn’t see how any of them had the sense to make a business. What was his better strategy?

I had a similar experience in February 2010. A dozen entrepreneurs had approached me separately over the month with their solutions looking for problems. After exhaustive research, they had determined I could create a business plan that would make their fortune. If I would do that first, I was welcome to sell their product on a commission basis, details to be defined later.

After 12 in a row, I was seriously wondering what I was doing wrong. Turns out it was a temporary aberration of the law of large numbers, and I needed more prospects. I worked past the situation, but hadn’t figured out any lesson.

Back to my New York friend, we talked a bit, and finally I said, why not take the most promising solutions, and build a demonstration that he could host on his Plus page? Whether he eventually sold anything or not, he could show some tasteful work that would be valuable both for him and the startups.

He wanted to know if he could do that with more than one company?

I answered from my extensive understanding of Soviet Economics, “Hey, they pretend to pay us, we pretend to work.”

That structure came in handy for another friend in the financial product sales just the next week. We may be on to something.

What are your strategies for dealing with free?
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