Business Revenue 2.0: my brain hurts

by Lee Hopkins on April 24, 2009 · 4 comments

in customer service,ethics,marketing,micro-blogging,pr,revenue models,tools

new revenue models

A link from Laurel Papworth to her social media course on Scribd started my brain whirring and eventually melting under the strain.

Laurel is giving her content away for free, as her post on her own blog clearly explains.

After I had signed up to Scribd in order to be able to download it, I started reading the ‘about’ page, trying to figure out what Scribd was and why it existed.

Call me old fashioned, but I still don’t understand.

Here’s old-school thinking (i.e. before Web2.0 and social media):

Your intellectual property is your most valuable asset; choose wisely how you freely give it away lest you have nothing left to sell.

Here’s new-school thinking:

Give everything away. For free.

Am I missing something or are we on the verge of another ‘Emperor’s New Clothes’ moment as we were in the dotcom boom period?

So… “Q: Does anyone see any value in Scribd? Is everyone going mad giving away all their IP for nothing these days?”

I posed the question out on Twitter and as luck would have it two of the smartest people in Aus social media jumped on it straight away: Gary Hayes and Laurel Papworth.

Said Gary: “1) the best things in life (social media) are free 2) those who contribute freely to the cloud will reap greater rewards in time”

Said Laurel: “the reason I am giving away my Social Media courseware for download http://twurl.nl/7w7htz is that the revenue lies elsewhere…”, following up with, “think of the music industry. Or blogs :) No different :) Look to Freemium or Experiential revenue streams… ;)”

David Wallace also replied to my question with a link to an interesting resource, a slidedeck about revenue models for advertisers in this brave new world.

My mind a-whirring, I set off in search of some of Laurel’s own slideshows, knowing that somewhere she had created a presentation about revenue models online. I eventually found it and her ‘Social Media Revenue’ masterpiece is below.

 

Laurel’s presentation led me to an equally mind-shifting presentation by David Cushman:

 

Yes, I have purchased and read ‘Here Comes Everybody’; yes, I have purchased and read ‘buy.ology’; yes, I have purchased and read ‘The Impulse Factor’; yes… ditto with ‘The World is Flat’, ‘click!’ and at least a dozen more in the last eighteen months…

And I was about to call out ‘the Emperor has no clothes on!’  when I remembered that I had already seen and been involved with a very successful version of this model, proving that if you think it through deeply enough you will come up with a potential winner.

Mark Joyner, for those who don’t know the name, is the Grand Poobah of online marketing; he has invented more revenue models and marketing/advertising technology than can be believed. He is also one of the most amazing online marketers because he seriously over-delivers on his promises. Really.

A little while ago I stumbled upon the Simple.ology website and since it was for free and being run by Mark, I figured I’d sign up and see what he was up to.

I have since become a Simple.ology addict, completing my 15-minute Daily Target Praxis every day (and noticing the drop in output on those rare days when I don’t complete it).

You’ll have to sign up for Simple.ology 101 to find out what a ‘Dai
ly Target Praxis’ is, but in years of searching for ways to better organise myself, after years of spending hundreds of dollars on books, tapes, cds, dvds, seminars and software, I found the solution that works for me for free. I guess when the pupil is ready…

Anyway, I’m not going to spoil the surprise by detailing here what the revenue model is, for two fairly good reasons:

  1. I could be wrong, therefore I don’t want to appear a prat;
  2. You have to see for yourself and as it is free to participate there’s no risk to you and a ton of fantastic material to come your way over time, again all for free.

I’m still not 100% convinced that the idea of giving away one’s IP is entirely the way to go – after all, does that mean that I should just release the entire content of my to-be-published-next-week report on social media for Ark Group (that will sell for around AUD$700) in the hope that Gary is right and that I’ll eventually “reap greater rewards in time”? By doing so I put at risk royalty income from the sales of those reports.

But if ‘community’ is the way of the future (of revenue generation, and I’m quite prepared to believe it is if someone can provide with with sufficient evidence, taking into account that I don’t have a server farm like Flickr or YouTube on which to host a zillion gigabites of data), then is the ‘next step’ for businesses—after they have respectfully entered into and embraced the social media milieu—to set up communities themselves, or haphazardly follow the disintegrating and re-generating communities of interest around them.

Too many people lost too many livelihoods during the dotbomb era and I’m not convinced that this ‘give it all away’ model is completely dissimilar. How does one eat whilst waiting for those greater rewards?

However, I am old enough to know that history, whilst oft repeating itself, also shows us that genies, once out, never go back into their bottles. Web2.0 is here to stay and so new content models are going to continue to be tried out until ‘Joe EveryBusiness’ can see one that finally brings a reasonable benefit.

What say you?


  • http://www.personalizemedia.com/ Gary Hayes

    Thanks for this Lee, (quick reply)

    Firstly we are not talking about giving ‘all’ your IP away for free. Even the basic freemium business model is about incrementally charging more for premium or value add products and services. The new model is more about reputation and trust developed over time so that the individual or companies value is about IP ‘potential’

    I coined a term on the Urban Dictionary a few months ago called ‘trustonomics’, meaning soon we will all place true value on brands/individuals based on trust – it will become quantifiable (see my last tweet on Marketing Charts influence – Global Multipliers for example). Example: If you are seen to be collecting IP from others, repackaging it and putting a price on it (which is what most consultants do ) that will have much less value in the long term than being seen to be the source. How do you show you are the source? Blogging, tweeting, white papering only go part way. Giving away things people can really use for their own benefit is what Laurel is doing in this case. It is analogous to not giving the man the fish to eat but the tools by which he can become a fisherman – far more value.

    Your right that this isn’t a short term bread and butter on the table solution but everyone needs to consider the two pronged approach in these hard times 1) showing your value by giving away ‘useful’ samples of your capability 2) charging premium for specific targeted services, live performances, strategic consultancy, specially written/composed/created works.

    I don’t think this is a particularly new concept as when you break it down to it’s fundamentals it goes way back into history, especially principles of bartering and swapping services for products. Also most of this is echoed by Mr Long Tail Chris Anderson in his new’ish doctrine Free! Why $0.00 Is the Future of Business focused much more on looking at practical examples of music and product tasters etc:

    Gary Hayes’s last blog post..Tribalization, Socialized TV & Games: Seriously

  • http://www.personalizemedia.com Gary Hayes

    Thanks for this Lee, (quick reply)

    Firstly we are not talking about giving ‘all’ your IP away for free. Even the basic freemium business model is about incrementally charging more for premium or value add products and services. The new model is more about reputation and trust developed over time so that the individual or companies value is about IP ‘potential’

    I coined a term on the Urban Dictionary a few months ago called ‘trustonomics’, meaning soon we will all place true value on brands/individuals based on trust – it will become quantifiable (see my last tweet on Marketing Charts influence – Global Multipliers for example). Example: If you are seen to be collecting IP from others, repackaging it and putting a price on it (which is what most consultants do ) that will have much less value in the long term than being seen to be the source. How do you show you are the source? Blogging, tweeting, white papering only go part way. Giving away things people can really use for their own benefit is what Laurel is doing in this case. It is analogous to not giving the man the fish to eat but the tools by which he can become a fisherman – far more value.

    Your right that this isn’t a short term bread and butter on the table solution but everyone needs to consider the two pronged approach in these hard times 1) showing your value by giving away ‘useful’ samples of your capability 2) charging premium for specific targeted services, live performances, strategic consultancy, specially written/composed/created works.

    I don’t think this is a particularly new concept as when you break it down to it’s fundamentals it goes way back into history, especially principles of bartering and swapping services for products. Also most of this is echoed by Mr Long Tail Chris Anderson in his new’ish doctrine Free! Why $0.00 Is the Future of Business focused much more on looking at practical examples of music and product tasters etc:

    Gary Hayes’s last blog post..Tribalization, Socialized TV & Games: Seriously

  • http://leehopkins.net/ Lee Hopkins

    Gary, thanks for your quick reply, mate.

    I’ll nip over and have a read of Ando’s new doctrine – ta for the link. (I won’t be reading it on a Kindle, but that’s another story)

    I am sloooowly starting to ‘get it’… thanks for being patient :-)

  • http://leehopkins.net Lee Hopkins

    Gary, thanks for your quick reply, mate.

    I’ll nip over and have a read of Ando’s new doctrine – ta for the link. (I won’t be reading it on a Kindle, but that’s another story)

    I am sloooowly starting to ‘get it’… thanks for being patient :-)

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