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# Free: How Today's Smartest Businesses Profit by Giving Something for Nothing

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desertcart.com: Free: How Today's Smartest Businesses Profit by Giving Something for Nothing: 9781401310325: Anderson, Chris: Books

Review: Atoms and Bits - Based on reviews here and comments across the blogosphere, Chris Anderson's "Free" is nothing if it isn't controversial. Which I find amusing, but not surprising, considering the rough-and-tumble, Wild West culture of the Internet and Internet business models - a culture where ideas trump dollars - at least in technology-rich Silicon Valley. So in this environment, while accusations of plagiarism are justifiably not taken lightly, the alleged plagiarism (of Wikipedia?), if true, were neither relevant nor distracting to me in what I found an entertaining, informative, and sometimes provocative treatise on the business of giving stuff away. In building his case, Anderson lays a foundation that stretches all the way back to 3000BC and the first mathematical concepts of "zero", to the origins of the "free lunch", to the cultural underpinning of piracy in the Far East. The author liberally spices his points with several encapsulated examples from the "free" economy: free music, free cars, and even free air travel. To familiar services that are both free and widely accepted (broadcast television, radio...), several current online and real world businesses and business models are compared. One of the more fascinating concepts was the philosophical difference between "free" and "not free", not only from the obvious perspective of implied value, but also in the much more subtle thought process of determining if any payment - even payment of only cents - is worth the intellectual effort and implied time commitment and implied risks of making the transaction. That is, the determinant is often not simply the price, but the implied commitment of a purchase, no matter how small. Anderson writes in the light, hip, highly understandable style one would expect from Wired magazine's editor-in-chief. The result is a book that should have broad appeal to an audience much wider audience than economists or Internet start-up junkies (who, in fact may be disappointed in the dearth of charts, graphs, supply and demand curves, and not a single mention of "guns and butter"). So "Free" may not help get you that PhD in web-based economics, nor will it walk you through a step-by-step guide to becoming the next Internet billionaire. But if you are looking for an insightful and illuminating business book, a pleasant way to spend a few down hours, or a great source of interesting facts and anecdotes to pick up the pace in this season of mostly boring holiday parties, "Free" is a highly recommended, um, "purchase."
Review: Making Free Work! - Below are key excerpts from the book that I found particularly insightful: 1- "The "free" part of freemium is simple, but the "premium" part is tricky. Every company and industry is different, and each business must figure out what its customers will pay for even as it uses Free to attract them in the first place. Although the book includes hundreds of examples of how successful firms found premiums to go with their frees, there are countless others. There is no silver bullet, no universal freemium model that can offer salvation to all. Making Free work is hard, which is why it's sometimes so scary." 2- "Those who understand the new Free will command tomorrow's markets and disrupt today's—indeed, they're already doing it. This book is about them and what they're teaching us. It is about the past and future of a radical price." 3- "Today the most interesting business models are in finding ways to make money around Free. Sooner or later every company is going to have to figure out how to use Free or compete with Free, one way or another. This book is about how to do that." 4- "Cross-subsidies can work in several different ways: Paid products subsidizing free products...Paying later subsidizing free now...Paying people subsidizing free people." 5- "Most transactions have an upside and a downside, but when something is FREE! we forget the downside. FREE! gives us such an emotional charge that we perceive what is being offered a as immensely more valuable than it really is. Why? I think it's because humans are intrinsically afraid of loss. The real allure of FREE! is tied to this fear. There's no visible possibility of loss when we choose a FREE! item (it's free). But suppose we choose the item that's not free. Uh-oh, now there's a risk of having made a poor decision—^the possibility of loss. And so, given the choice, we for what is free." 6- "The lesson from Harris's experience is that in a digital marketplace, Free is almost always a choice. If you don't offer it explicitly, others will typically find a way to introduce it themselves. When the marginal cost of reproduction is zero, the barriers to Free are mostly psychological fear of breaking the law, a sense of fairness, an individual's calculation on the value of his or her time, perhaps a habit of paying or ignorance that a free version can be obtained. Sooner or later, most producers in the digital realm will find themselves competing with Free. Harris understood that and figured out how to do it better. With his survey, he looked into the mind of the of the pirate and saw a paying customer looking for a reason to come out." 7- "Commodity information (everybody gets the same version) /ants to be free. Customized information (you get something unique and meaningful to you) wants to be expensive." 8- "It's easy to see e why this is scary for the industries that are losing their pricing power. "De-monetization" is traumatic for those affected. But pull back and you can see that the value is not so much lost as redistributed in ways that aren't always measured in dollars and cents." 9- "In 1971, at the dawning of the Information Age, the social scientist Herbert Simon wrote: In an information-rich world, the wealth of information meat a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention." 10- "There is nothing new about this—people have always been creating and contributing for free. We didn't call what they did "work" because it wasn't paid, but every time you give someone free advice or volunteer for something, you're doing something that in a different context could be somebody's job. Now the professionals and amateurs are suddenly in the same marketplace of attention, and these parallel worlds are now in competition. And there are a lot more amateurs than professionals." 11- "The idea that knockoffs can actually help the originals, especially ir the fashion business, isn't new. In economics, it's called the "piracy paradox," a term coined by law professors Kal Raustiala and Christopher Sprigman. The paradox stems from the basic dilemma that underpins the economics of fashion: Consumers have to like this year's designs, but also quickly become dissatisfied with them so they'll buy next year's design. Unlike technology, say, apparel companies can't argue that next year's models are functionally functionally better—they just look different. So they need some other reason to get consumers to lose their infatuation with this year's model. The solution: widespread copying that turns an exclusive design into a mass-market commodity. The designer mystique is destroyed by cheap ubiquity, and discriminating consumers have to go in search of something exclusive and new." 12- "The lesson from fiction is that we can't really imagine plenty properly. Our brains are wired for scarcity; we are focused on the things we have enough of, from time to money. That's what gives us our drive. If we get what we're seeking, we tend to quickly discount it and find a new scarcity to pursue. We are motivated by what we don't have. not what we do have."

## Technical Specifications

| Specification | Value |
|---------------|-------|
| Best Sellers Rank | #514,004 in Books ( See Top 100 in Books ) #291 in Social Aspects of Technology #483 in E-Commerce (Books) #815 in Systems & Planning |
| Customer Reviews | 4.1 out of 5 stars 382 Reviews |

## Images

![Free: How Today's Smartest Businesses Profit by Giving Something for Nothing - Image 1](https://m.media-amazon.com/images/I/611yNkGOPIL.jpg)

## Customer Reviews

### ⭐⭐⭐⭐⭐ Atoms and Bits
*by G***S on December 8, 2009*

Based on reviews here and comments across the blogosphere, Chris Anderson's "Free" is nothing if it isn't controversial. Which I find amusing, but not surprising, considering the rough-and-tumble, Wild West culture of the Internet and Internet business models - a culture where ideas trump dollars - at least in technology-rich Silicon Valley. So in this environment, while accusations of plagiarism are justifiably not taken lightly, the alleged plagiarism (of Wikipedia?), if true, were neither relevant nor distracting to me in what I found an entertaining, informative, and sometimes provocative treatise on the business of giving stuff away. In building his case, Anderson lays a foundation that stretches all the way back to 3000BC and the first mathematical concepts of "zero", to the origins of the "free lunch", to the cultural underpinning of piracy in the Far East. The author liberally spices his points with several encapsulated examples from the "free" economy: free music, free cars, and even free air travel. To familiar services that are both free and widely accepted (broadcast television, radio...), several current online and real world businesses and business models are compared. One of the more fascinating concepts was the philosophical difference between "free" and "not free", not only from the obvious perspective of implied value, but also in the much more subtle thought process of determining if any payment - even payment of only cents - is worth the intellectual effort and implied time commitment and implied risks of making the transaction. That is, the determinant is often not simply the price, but the implied commitment of a purchase, no matter how small. Anderson writes in the light, hip, highly understandable style one would expect from Wired magazine's editor-in-chief. The result is a book that should have broad appeal to an audience much wider audience than economists or Internet start-up junkies (who, in fact may be disappointed in the dearth of charts, graphs, supply and demand curves, and not a single mention of "guns and butter"). So "Free" may not help get you that PhD in web-based economics, nor will it walk you through a step-by-step guide to becoming the next Internet billionaire. But if you are looking for an insightful and illuminating business book, a pleasant way to spend a few down hours, or a great source of interesting facts and anecdotes to pick up the pace in this season of mostly boring holiday parties, "Free" is a highly recommended, um, "purchase."

### ⭐⭐⭐⭐ Making Free Work!
*by O***H on November 2, 2013*

Below are key excerpts from the book that I found particularly insightful: 1- "The "free" part of freemium is simple, but the "premium" part is tricky. Every company and industry is different, and each business must figure out what its customers will pay for even as it uses Free to attract them in the first place. Although the book includes hundreds of examples of how successful firms found premiums to go with their frees, there are countless others. There is no silver bullet, no universal freemium model that can offer salvation to all. Making Free work is hard, which is why it's sometimes so scary." 2- "Those who understand the new Free will command tomorrow's markets and disrupt today's—indeed, they're already doing it. This book is about them and what they're teaching us. It is about the past and future of a radical price." 3- "Today the most interesting business models are in finding ways to make money around Free. Sooner or later every company is going to have to figure out how to use Free or compete with Free, one way or another. This book is about how to do that." 4- "Cross-subsidies can work in several different ways: Paid products subsidizing free products...Paying later subsidizing free now...Paying people subsidizing free people." 5- "Most transactions have an upside and a downside, but when something is FREE! we forget the downside. FREE! gives us such an emotional charge that we perceive what is being offered a as immensely more valuable than it really is. Why? I think it's because humans are intrinsically afraid of loss. The real allure of FREE! is tied to this fear. There's no visible possibility of loss when we choose a FREE! item (it's free). But suppose we choose the item that's not free. Uh-oh, now there's a risk of having made a poor decision—^the possibility of loss. And so, given the choice, we for what is free." 6- "The lesson from Harris's experience is that in a digital marketplace, Free is almost always a choice. If you don't offer it explicitly, others will typically find a way to introduce it themselves. When the marginal cost of reproduction is zero, the barriers to Free are mostly psychological fear of breaking the law, a sense of fairness, an individual's calculation on the value of his or her time, perhaps a habit of paying or ignorance that a free version can be obtained. Sooner or later, most producers in the digital realm will find themselves competing with Free. Harris understood that and figured out how to do it better. With his survey, he looked into the mind of the of the pirate and saw a paying customer looking for a reason to come out." 7- "Commodity information (everybody gets the same version) /ants to be free. Customized information (you get something unique and meaningful to you) wants to be expensive." 8- "It's easy to see e why this is scary for the industries that are losing their pricing power. "De-monetization" is traumatic for those affected. But pull back and you can see that the value is not so much lost as redistributed in ways that aren't always measured in dollars and cents." 9- "In 1971, at the dawning of the Information Age, the social scientist Herbert Simon wrote: In an information-rich world, the wealth of information meat a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention." 10- "There is nothing new about this—people have always been creating and contributing for free. We didn't call what they did "work" because it wasn't paid, but every time you give someone free advice or volunteer for something, you're doing something that in a different context could be somebody's job. Now the professionals and amateurs are suddenly in the same marketplace of attention, and these parallel worlds are now in competition. And there are a lot more amateurs than professionals." 11- "The idea that knockoffs can actually help the originals, especially ir the fashion business, isn't new. In economics, it's called the "piracy paradox," a term coined by law professors Kal Raustiala and Christopher Sprigman. The paradox stems from the basic dilemma that underpins the economics of fashion: Consumers have to like this year's designs, but also quickly become dissatisfied with them so they'll buy next year's design. Unlike technology, say, apparel companies can't argue that next year's models are functionally functionally better—they just look different. So they need some other reason to get consumers to lose their infatuation with this year's model. The solution: widespread copying that turns an exclusive design into a mass-market commodity. The designer mystique is destroyed by cheap ubiquity, and discriminating consumers have to go in search of something exclusive and new." 12- "The lesson from fiction is that we can't really imagine plenty properly. Our brains are wired for scarcity; we are focused on the things we have enough of, from time to money. That's what gives us our drive. If we get what we're seeking, we tend to quickly discount it and find a new scarcity to pursue. We are motivated by what we don't have. not what we do have."

### ⭐⭐⭐⭐⭐ I Got It Free, But It Is Worth Paying $9.99 For!
*by P***R on July 31, 2009*

Free is a well-written book by Chris Anderson, the editor of my favorite magazine, Wired. The style and tone of the book is much like the long articles in Wired magazine. If you like those long articles and are interested in pricing models of various businesses, you will like this book. If not, it may be too much detail. (Some have quibbled with his use of Wikipedia for research, to me, it fits in with his thesis that information wants to be free, and takes nothing from his work.) Anderson's thesis is that "making money around free will be the future of business." In the digital world, marginal costs are near-zero, in contrast to the world of "atoms." As he states in his book, for many, especially the generation that has grown up with the internet, "the response is usually `And?' It seems self-evident to them." This was exactly my reaction. Nevertheless, the book was worth reading. My favorite key points: "Between 1980 and 1990, the world's population grew by more than 800 million. But by September 1990, without a single exception, the price of (various metals) had fallen, and in some cases had dropped through the floor." Great argument against all the commodity bulls. The same "genius" that predicted commodity prices to go up also predicted famines of "unprecedented proportions." This looks ridiculous now, with the massive obesity epidemic. The author slyly notes this genius still received a MacArthur Foundation Genius Award. Great point about how so-called experts are awful at making accurate predictions. "Simon complained that, for some reason he could never comprehend, people were inclined to believe the worst about anything and everything; they were immune to contrary evidence just as if they'd been medically vaccinated against the force of fact." I often wonder about this myself. In a slow economy, we read all the doomsayers saying, "we're in a big hole." Yet we always come out of it in time. More data for the scarcity crowd: "Today basic necessities such as clothing can be made so cheaply as to be essentially disposable." The author explains that in 1900 a man's T-shirt cost about $1 wholesale. Today, that same T-shirt still costs about $1 wholesale, but $1 today is worth about 1/25th of what $1 was worth 100 years ago. Transistors are even more amazing: in 1961, they cost $10, 2 years later $5, and now 0.000015 cents each. The author discusses what I have called "The Encarta Complex:" the decline of the encyclopedia industry by Microsoft CD-ROMs, and subsequent total destruction by Wikipedia. In 1991, the market was a $1.2 billion industry. In 1993, Microsoft launched the Encarta CD, and by 1996, the market had shrunk in half to $600 million. In 2009, the market was effectively zero, as Microsoft stopped selling Encarta altogether, as Wikipedia was free. So is all of industry doomed to failure, as all prices approach zero? How do businesses compete with the inevitable downward pressure on prices? Anderson answers: "But the short form is that it's easy to compete with free: simply offer something better or at least different from the free version. There is a reason why office workers walk past the free coffee in the kitchen to go out and spend $4 for a venti latte at Starbucks - the Starbucks coffee tastes better." Because the dinosaurs like newspapers and telecom companies don't recognize this reality, and don't want to change, Anderson concludes: "Your voice mail inbox is full" is the death rattle of an industry stuck with a scarcity model in a world of capacity abundance.

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