Chris Anderson’s at Wired discusses where, why and how free products make sense today and will make make even more sense (and cents) in the future. Starting with the story of Gillette and bringing us to the plummeting cost of computing and networking, Anderson argues that the traditional cross-subsidy model is not required when incremental costs approach zero. This opens the way for numerous value creation models when a product is given away and allows companies to avoid the “penny gap” or the difference between cheap and free as coined by Josh Kopelman.
“People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that’s the difference between a great market and none at all.
“The huge psychological gap between “almost zero” and “zero” is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.”
Running to a breakfast meeting, I was forces to pull to the side of the road and snap a few shots of this mornings brilliant sunrise behind a foggy frosted field.
This week’s Sunday news programs were chock full of election experts sharing some interesting comments and many that were less so. My favorite was Dan Rather’s depiction of Hillary Clinton’s closing comments at the Tuesday night Austin debate as the best statements of the campaign. Surprisingly, earlier in the day, Meet the Press demonstrated that these statements included almost word for word the same lines as one uttered by Bill Clinton sixteen years ago and another used by John Edwards in an earlier debate during this campaign. Interesting…
Speaking of the TXU purchase, Mr. Bonderman said the company was adept at running a profitable company and equally bad at politics from price increases to ecology to labor relations. These shortcomings lead tothe opportunity which focused on addressing these public concerns.Opportunities for private equity include exploiting public investorsfocus on short term focus, their dislike for debt or leverage, fixingbroken companies and putting companies together that changes thecompetitive landscape.His advice to students wondering which classes to take for a career inprivate equity, which job to take this summer, which classes to takenext year is to “Just relax”.In looking at the public policy of the US, Bonderman says ourlawmakers are thinking like it is 1975 when the US represented 50% ofthe world’s GDP. Now that we are less than 30% and falling the rest ofthe world has choices and will not play by any US tax code.Best run companies are those which build value over long periods oftime. However, fund managers often are looking for short term gains.This makes creating proper incentives for publicly traded companies’managers sub optimal if not downright harmful.
PlayPumps International has a goal to help 10 million people in 4,000 African villages by 2010 by installing merry-go-rounds in the villages. What’s the catch?
Each turn pumps clean drinking water into a tank increasing the health of everyone in the village. The time and effort for water carrying, mostly done by young girls, is greatly reduced, allowing for more time in school. Talk about your good ideas…
If your in the mood for a smile (and if not, perhaps you need to check this out even more) then head over to VC Wear to see the t-shirts these guys have cooked up.
Interested in helping kids connect with their community? Want children to be exposed to giving back at an early age? Desire for middle school kids to appreciate the environment. Then please consider a financial contribution to Colorado Youth Program. This Boulder County organization provides a free after school program, Adventure Club, engaging middle school children in community service projects at the Humane Society, Community Food Shares, and cleaning up the Boulder Creek and other hiking trails.
Colorado Youth Program also offers a ten day summer camp in the Mountains near Ward focused on environmental education. Most campers would not be able to enjoy a summer camp experience with the generous scholarships made available by contributors. Check out this great group.
Attended my first Boulder Open Coffee Club this morning at The Cub on Pearl near 16th. I was dropped in after the planetarium trip with my son’s first grade class was postponed due to snow and cold (we were scheduled to walk past the CU solar system model to the show). As I arrived they were discussing the best places to find professional support such as legal, accounting, etc. And quickly finished promoting a new source for collaborative support the Boulder Tech Bootstrap site. The site will contain both a wiki and a discussion forum for entrepreneurs to help each other just git it done.
