
The end of the free lunch - again  - mixmax
http://www.economist.com/opinion/displaystory.cfm?story_id=13326158
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yters
It's a good argument and all, whether it's made by Matt or the economist. But,
why does everyone focus on money? Is wealth relevant or not? Surely giving
away free stuff creates more wealth, if it is sustainable. The real answer to
this dilemma is to somehow redirect the outflow of wealth partially back to
the producer without the use of money.

For example, say you created free, online computer games where people spent
all day reconfiguring proteins. The game is completely free, thus providing
wealth to people, and people pay the service back by using it.

The only reason money is ever mentioned is because it is the simplest, catch
all solution. But, like the no free lunch theorem for search, money is your
Monte Carlo baseline. For a limited problem domain there is quite likely a
better technique than random sampling, and therefore a better wealth
redirection technique than money. People just need to be more creative. (And,
perhaps the comp sci analogy is more than just an analogy)

~~~
swombat
Very interesting idea.

I've just finished reading Accelerando by Charles Stross, and one of the
characters there is what he calls an "agalmic entrepreneur". He doesn't
actually start businesses himself, just has half a dozen brilliant ideas
before breakfast, finds the right person to implement those ideas and gives
that person the idea (and the crucially missing connections to make it happen,
etc). In that novel, he has no money - lives off of favours that he can call
in at any time from the numerous people he's made rich.

Now, that's obviously not very realistic, but perhaps a mix between those two
ideas might bear fruits.

~~~
jwilliams
There was a good article around called something like "the well that Google
built"... (Ironically I can't find it on Google).

But the basic idea is like building a village well. The rich people of the
village may band together and build a well - naturally, they don't make money
off it, as the general populace would be too poor to pay.

What happens is that the prosperity of the whole village increases. Disease
goes down, productivity goes up - so the demand for what the richer
inhabitants have to offer (e.g. goods & services) goes up.

The Internet is all about this - Google isn't the only example, but is a prime
one. Whilst many of their services do not directly make any money, they make
the Internet a more useful, better place... And the more that people turn to
the Internet, the better off Google is.

Edit: pg touches on this too, with his comment about a startup tackling an
issue like malaria: <http://www.paulgraham.com/good.html> Curing malaria isn't
going to immediately/directly make anyone any money - but it's possible the
downstream effects could generate a lot of wealth.

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davidw
It is, of course, worth noting, that The Economist's on line edition has
gotten gradually more and more free, with time.

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9oliYQjP
What worries me about this trend is that I don't think the free lunch can end
without websites/services getting in bed with the ISPs. Having to deal with
hundreds of subscriptions to websites/services is just not going to fly with
your average consumer. I highly suspect what will happen is that your ISP will
negotiate with websites/services and offer up bundled tiered Internet packages
like they do with cable TV. Should that prove to be successful, that will mean
the end of the world wide web as we know it. Then again, that may not be
saying much as the world wide web as I know it today is not the same one that
I knew even 5 years ago.

~~~
ntyntyesr
Which means you wouldn't be reading this story - The Economist is owned by the
FT, which competes with the Times, which is owned by Murdoch. If you internet
is from Sky then they aren't going to be shipping a competitors content over
their fibres.

AOL your time has finally come!

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ewjordan
With all the talk of advertising "crashing" (I've heard a lot of these claims
lately), I'd really like to see some numbers to back it all up and prove the
point.

Are advertising revenues down significantly more than, say, the Dow average?
Because otherwise I would have a real hard time agreeing with the assessment
that another advertising bubble is popping...

The problem with a switch to paid content is, of course, that it makes very
little sense to assume that the customers that you want to pay you or what
they're used to getting for free are any better off financially than you are,
or any more willing to pay for the content than advertisers are willing to pay
for eyeballs.

However "unproven" the advertising business model on the web may be, the user-
pays-for-content model has even fewer success stories - I'm getting a little
tired of people claiming that it's the clear way of the future when just about
nobody has made it work yet.

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metalacorn
from what i am reading it seems you can either be 'free' or 'not-free'. in my
opinion there is nothing wrong with free, it's doing 'free' for ever that I
think brings about the contention. giving stuff away for free catalyzes a
conversation with the consumer that you might not have had in the first place
if you had charged. This falls in line with the article discussed in
<http://news.ycombinator.com/item?id=523616>.

Given these numerous interactions with your free product - build a perfect
product and know that it is exactly what people are looking for. Make that
'not-free'.

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andrewljohnson
I keep reading these articles, but I'm still making a free website.

In my estimation, the big internet sites serve everyone, not just the chosen
few with money. And I want to build a big internet site.

So it must be free.

~~~
dbul
Building a big Internet site and providing the service for free is great. It
isn't impossible to do that and be successful. But why _not_ have services
that users pay for in addition to the free content? Surely there are some
services where users who are getting what they need for free wouldn't be
concerned with and likewise there are people who are willing to pay for
"something more."

