Value proposition

Posted on | February 27, 2006 | Comments Off

Anita Campbell is writing today about the two-pronged business strategy of giving away stuff for free in order to garner attention, penetrate a market, or develop a community followed by charging for stuff.

It resonated for me because of my experiences with The MicroEnterprise Journal. When I started writing the Journal’s predecessor back in 1999, it was a free publication. But it wasn’t long before I saw that ad revenues weren’t really viable for me if they were going to be my only revenue stream. I experimented with paid reports and even with creating entire books from previously published articles (both E-Commerce for the Unfunded and Financial Management 101, published by Wahmpreneur Books, are article compilations). I was unsatisfied with the results.

Hence my decision to take the Journal to a paid subscription format. And I can’t tell you how much grief and general discouraging words I got when I made that decision. People told me I’d be forced out of business and that nobody would pay for a subscription. I still don’t have mountains of subscribers but I’ve found that there are enough people willing to pay for my unique and exclusive content to pay the bills.

Anita writes:

I see a lot of startups that are good at the first phase. Then they run into a brick wall when it comes to the second phase. In fact, the free and open model becomes a mental block. Once you start giving stuff away — content or software or services or whatever — whether you realize it or not, a mentality of giving everything away for free takes over. You start thinking, “We can’t charge for that, the community would never stand for it, yada yada yada.”

I, too, have seen people struggle with that, and it’s a trap of our own making. Yeah, sure, there are plenty of freeloaders online but the success of firms like Amazon.com and eBay establish that there are plenty of paying customers online, too.

My experience with The MicroEnterprise Journal suggests that people will pay if you provide value. It really is just that simple.


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Category: Management


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