
Kamikaze Marketing (why usage billing kicks freemium's bottom) - hymanroth
http://lmframework.com/blog/2009/07/kamikaze-marketing
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fauigerzigerk
Micro billing is an interesting model. But I think he "underestimates" the
mental burden of checking whether a particular service or content provider is
billing me correctly. Flatrate tariffs are popular for a reason.

It makes me uneasy to think that 40 different websites would use my credit
card details to bill me whenever _they_ thought I had used their service.

Of course, there's a way to lower that mental burden by introducing a
middleman. Someone who would run an application/content provisioning platform
and hence would be able to check all usage data, enforce contracts and resolve
conflicts.

Guess what LM (the author's company) does. On their "vision" page
(<http://lmframework.com/page.php?id=vision>) they say "Our kids will not
access multiple websites. They will simply use their favourite stream
manager". So I guess LM would be that "stream manager", gatekeeper to what was
once known as the web.

It seems likely that a model like this will be popular for some sorts of
services. But I very much doubt that LM will play that role.

So many people want to be the platform on which everything runs, the store in
which everything is sold, the gate through wich every HTTP message passes, the
cloud in which all our data lives. Microsoft, Google, Apple, Amazon, they all
want to be that.

Micro billing may be a good idea, but starting a company that aims to be the
new mother of all platforms, including a new business model, application
provisioning model, data model, application development paradigm and what have
you, that's a Kamikaze business model if I have ever seen one.
<http://lmframework.com/page.php?id=lmf>

~~~
hymanroth
Thanks for a great comment.

It's true that we are attempting to solve quite few problems in one go, but
this just reflects the nature of the challenge - rather than any particular
desire to blow ourselves up.

If you look at AWS, they spent $2 billion implementing their vision of cloud
services. They understood that you can't just graft a business model onto
existing technology, so they created a platform where the technology and
revenue system go hand-in-hand.

We're trying to do something similar for the browser. We don't aim to own or
dominate the platform. It will be very open, with space for any number of
compatible billing systems.

D.

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diN0bot
i found the articles interesting. i say articles because i clicked through to
another one of the author's articles, as well as clay shirky's 2000 post.

<http://lmframework.com/blog/2009/06/freemium/>

[http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.ht...](http://www.openp2p.com/pub/a/p2p/2000/12/19/micropayments.html)

i thought the post provided a fair bit of detail and discussion. it wasn't
fluff, though also not flawless.

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GavinB
The "micro billing" proposed in this article is composed of micropayment that
are tallied in the background. As far as I can tell, the only difference
between microbilling and micropayments is that there's no confirmation dialog.

You're still deciding every day whether or not to spend the 20 cents.

~~~
hymanroth
I disagree. My interpretation of Shirky's thinking is that the dialog is the
issue, rather than the payment size.

The key is to create an almost friction-free and fair method of payment.
People are happy to pay a fair amount for content (cf. the piracy argument) as
long as it's hassle free.

The usage component is essential so that people don't end up paying for
services they don't use. If you stop using a service you stop paying for it.
No lock-in.

D.

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davidmathers
When the author submitted his previous article I replied here at HN with the
Clay Shirky link and a thought experiment. I like how the new article contains
the Clay Shirky link and a thought experiment but doesn't mention Hacker News,
or the discussion we had here, at all.

Anyway, I predict failure. Let me know when there's stock I can sell short.

~~~
hymanroth
David,

When I wrote the original article I was already aware of Shirky's views on
micro payments, but it's true that the comments both here and on my blog made
me understand that this issue was more important than I had previously thought
- and so for that I am certainly grateful to you.

As to my use of a 'thought experiment' - well I've been doing them ever since
I tried to get my head around relativity 20 years ago. I can't remember if
Shirky uses a thought experiment in his original article, but even if he does,
I don't see it as being particularly relevant.

As to you wanting to short our (yet inexistent stock) - well, I can see you're
upset, but isn't that a bit harsh?

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jacquesm
For an interesting take on microbilling in combination with web access have a
look at Ted Nelsons work.

~~~
hymanroth
Thanks, will do

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tybris
Problem is trust. You need to be a well-established retailer before well-
established banks will allow you to charge credit-cards for an arbitrary
amount without explicit permission.

~~~
hymanroth
There will always be explicit permission from the consumer.

But you're right about trust. For this reason we are not trying to roll this
out ourselves.

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pjf
Microbilling in the form presented in the article is still so unpopular as a
method of payment that I doubt its worth considering at the moment.

~~~
hymanroth
How can a model that has never been tried be unpopular?

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tumult
really tasteless (and unfitting) comparison. and your blog is ugly.

~~~
hymanroth
The term 'Kamikaze' crops up frequently in the media out of its original
context. For example, the UK chancellor used the same term to describe the
bankers who created the housing bubble (<http://bit.ly/Qdmlj>) - so I don't
see how it can be tasteless.

I'm sure if a company started giving away free cars in the hope of charging
for premium petrol then they would probably attract similar (if not stronger)
adjectives. And the workers in the plants making cars for money would
certainly get caught in the shrapnel.

As for my blog being ugly - I couldn't agree more.

