Amazing companies are built on free.

I caught a comment on Twitter recently that “a company built on free would be a pretty shitty company”. The author has since deleted that tweet, presumably because some of the best companies are built on free. Brands like Gillette ($43B), Google ($185B), Apple ($205B) all leveraged ‘free’ in some form. King Gillette gave away … Continue reading “Amazing companies are built on free.”

I caught a comment on Twitter recently that “a company built on free would be a pretty shitty company”. The author has since deleted that tweet, presumably because some of the best companies are built on free.

Brands like Gillette ($43B), Google ($185B), Apple ($205B) all leveraged ‘free’ in some form. King Gillette gave away his razors and sold the blades a hundred years ago. Google gives away ‘freemium’ access to their apps and services. The foundation of Apple’s amazing operating system is open source and given away for free and they’ve created and given away a world-class web browser engine, WebKit, which is being used free of charge by Nokia, RIM and Google in mobile products that are competing directly with Apple.

Ryanair’s Michael O’Leary celebrates the notion of free (paying for flights using anciliary revenue – in-flight meals, bag checks, hotel and car bookings, internet and games):
“The other airlines are asking how they can put up fares. We are asking how we could get rid of them.”

Amazing companies are built on free. 20th Century companies were built on the notion of scarcity. They focussed on the shipping of real goods, the transportation of atoms. The scarcity was real. With the exception of High Fructose Corn Syrup, we have a scarcity of many items because duplicating items means duplicating costs. But there’s no scarcity of bits. Bits are the lingua franca of the Internet and we have an abundance of them. Bits enable ‘virtual goods’ to be duplicated endlessly. The cost of duplication is zero so you’re left with the initial cost of creation which, when amortised over the potential millions of recipients, drives the individual cost towards zero.

Now the economics of scarcity keep some people in power – this is the essence of the haves and have-nots. But in a future where the real currency, the currency of bits, is something that is abundant, even more abundant than the air, how can these people retain their power? They can’t obviously and what’s worse, they don’t understand it and it scares the shit out of them.

The scarcity/abundance economics are the reason we’re setting up StartVI. In Belfast there is an artificial scarcity of office space (with over 1.26 million square feet of empty office space in Belfast). The scarcity is created by pricing the office space beyond the means of the businesses which could make use of them. It seems utterly insane that we’re talking about a scarcity of empty space. So, we’re removing the essence of that scarcity. And we;re providing more than empty space. Desk space in StartVI is free. Internet access is free. Light and heat are free. And we’re filling the empty space with people: hopeful entrepreneurs, wise business advisors, savvy investors. And they’re giving their time for free.

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