That the new free is not a left pocket out of the right pocket into the marketing strategy

He argues that the new "free" is not a marketing strategy for a left pocket and a right pocket, but a new type of excellence that lowers the cost of goods and services to zero. One is based on computer-byte economics, not the economics of the past built on the basis of physical atoms.

A unique feature in the digital age is that if something becomes software, its costs and prices inevitably tend to zero. This trend is creating a huge new economy, which is unprecedented, in this new economy, the basic price is "0".

For us personally, "free" is a way to wash away the old thinking business experience, and for enterprises, "free" more is a survival law, a can change the old development model and realize the "power machine."

It's not important to be free, it's the law behind it.

In the free Psychology chapter, the "Mental transaction cost mental transaction costs" is discussed. In fact, all transactions have this mental cost, and the final deal is the final decision on the willingness to trade. Maybe it's cheap, maybe it's luxury, maybe it's being bullied by the boss, maybe it's for kickbacks, maybe it's a trick. And when we put the most flexible factor in the transaction of "price" to the extreme, 0 price, nature has a strong impact on the human mind. As a micro-payment, it is true that the impact is not enough. So, no matter whether it is free or not, we really need to consider the state of mind when the client trades.

"Free is also a double-edged sword, it is the best way to maximize the promotion of products and services, but if this is not your ultimate goal, then it will be counterproductive." ”

Three mole elements (elements that conform to the Moore's Law): the three elements in the IT field are the processors, storage devices, and bandwidth. Or is called the element that conforms to the learning curve.

"If you're producing something that's going to cut prices regularly, you might as well try a seemingly magical pricing approach." You don't have to price the product at the price you're selling today, but you can price it in the future. ”

"The duty of the technologists is not to understand the reasonable use of technology." Instead, the focus of technology experts is to make technology products cheaper, easier to operate, ubiquitous, so that everyone can use it, and that technology can reach everywhere. We consumers will naturally decide what the technology product should be used for, because each of our consumers is different, we need differently, different views, different knowledge backgrounds, and different ways of dealing with the outside world. ”

"In the long run, the price trend is determined by the technology itself, the more the quantity of a commodity, the cheaper the price will be."

Say law: "Supply creates demand" (according to the author's 18th century French economist Jean-Baptiste)

At the first hacking conference in 1984, Stewart Brandt raised the third of the seven guidelines proposed by Stephen Levy: "On the one hand, information wants to be expensive, because it's so valuable that knowing the right information at the right place can change your life." On the other hand, information also wants to be free, because the cost of releasing information has been falling. So the two trends are in the way of each other. "People always remember to take half the words for free and forget about the expensive half." And note that the subject of this passage is "information".

"Free to bring more liquidity to all markets"

"Liquidity is often regarded as a financial term, but in practice it is applicable to any system that has a related party." ”

Anthony Courneau: "All competitive relationships between companies are related to the number of products they produce."

Joseph Portland: "In a competitive market, the price equals the marginal cost"

So when the marginal cost of Internet products is close to 0, then free is the inevitable choice.

"Who is the most respected customer in the gym?" The guy who never showed up after paying dues. Of course, it would be even more wonderful if he/she could continue to renew the fee.

"Any abundance will bring on the other hand of scarcity."  For example, the supply of abundant will cause "customer attention" "Customer time" shortage. "Mammals have the least offspring in the animal kingdom, so we devote a lot of time and energy to protecting each and every one of our offspring so that they can grow up." A person's death is a tragedy, sometimes even the living can never be able to recover from the tragedy of grief. We value the lives of individuals more than anything else. ”

Free business model:

Mode 1: Direct cross subsidy

It's like buying a product to send a service, buy one get a

Mode 2: Tripartite market

For example, we look at the website for free, and the website charges to the third party advertiser

Mode 3: Free surcharge

Limited time: 30 days free

Qualifying features: such as the basic version free

Limit the number of users: such as 5 users within free

Qualifying Customer Categories: education free

Free + fees to pay attention to the conversion rate of both

Free times are the times when individual economy prospers again

This book tells us the difference between two kinds of business that we can all touch, one is to buy instant noodles, one is to watch video on Youku. For instant noodle manufacturers, he would try to satisfy 80% of customers with a limited variety of goods, and give up 20% unique customers. For Youku, he will be free to 80% of the customers, and 20% unique needs of the customer charges (advertising-free, high-definition, etc.).

The former's profit comes from 80% of customers with roughly the same tastes, and gives up 20% of the niche customers, whose profits come from 20% unique customers and are free to 80% of the mass users. The reason for this difference is that the former sells "physical" goods, where marginal costs exist; the latter sell "numbers" and "information" with marginal costs of almost 0 per cent-because the underlying prop: the price of processors, bandwidth and storage media has been falling.

For the next two or three weeks, the news from the media has some "free" economic features:

Zhang Zhenyue free to publish his own music;

Millet release ultra-low price TV;

Baidu, Gould almost at the same time announced its map, navigation products free;

Beijing Public transport Company opened a custom bus line, passengers can design their own routes, as long as the number of peer passengers enough, you can open this line. Although it is more expensive than the ordinary bus, but because the vehicle can travel in the bus lanes, it is very attractive;

A mooncake factory in Guangdong can allow guests to make DIY mooncakes on site. Due to the large number of applicants, customers need to wait two or three months to arrange.

None of these cases is similar to Youku's sales of "numbers", but they all have one thing in common: keeping the public demand low or even free, charging high fees for small-audience demand. This also said the free era of "business", began to focus on the small and personalized needs to provide customized services.

Before the industrial Revolution, production was almost all about satisfying its own needs. The industrial Revolution brought about a leap in production capacity, the production of products by a large number of manufacturing, people's needs are being met with less and less cost. However, the price behind this is that consumers are being standardized, format, no longer eat the real "hand rolling face", can not find the same care as their mother month sister-in-law service. But the latest industrial revolution seems to have continued to break the balance by reducing the cost of producing homogeneous products and providing similar services, even to "0".

The trend is not just in the Internet, but even in the manufacturing industry, the center of the Industrial Revolution, which is changing with the advent of 3D printing. I believe that products and services that aim to meet personalized needs will prosper again, just as it was before the industrial Revolution, but the premise and extent of it have been vastly different.

In this free time, as long as you have skills, advanced technology can let you at a very low cost for the public to provide personalized service. It will be an era of individual economy, end-to-end service prosperity, and a time when everyone can feel the progress of science and technology and enjoy more personalized service.