

If someone can do it for free, then it will be inevitably free - mtw
http://montrealtechwatch.com/2008/07/27/building-a-profitable-business/

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mattmaroon
This is a simple failure to understand economics. Most things cannot be done
for free. It might be possible to code them for free, but hosting on an
ongoing basis, not so much. There are plenty of businesses where ad revenue
just won't cut it.

"For instance, that’s why content-based businesses (say newspapers) are doomed
because there’s always people like Mark, me or even the average guy willing to
spend one hour in their day writing articles and take pictures of what’s up."

It's sad that newspapers let it get to this. It used to be that their
journalism was a cut above. They spent the (relatively) big bucks on the good
reporters, gave them the leeway to chase stories, many of which never amounted
to anything, in order to provide hard hitting analysis. Now they just farm it
out to AP or Reuters, until some clown bloggers think their hour a day is a
solid substitute.

Newspapers that actually do quality reporting (NYT, WSJ) are struggling with
the new economy but will come out ahead in the end.

~~~
wmf
I think what they mean by "free" is "no charge to the user"; it still costs
money to run Web 2.0. Maybe a better tagline would be anything that can be
subsidized will inevitably be subsidized.

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pg
Only if it's fun or prestigious.

Corollary: The less talented the founders of a company are, the more they
should focus on things that are not fun or prestigious.

People who are very talented can do a better job even at things other people
are willing to do free, and charge for the difference. But if you're no better
than the people working for free, you can only charge for things they're
unwilling to do.

E.g. if you're really good (for some definition of good) you can make money
playing your own songs. If not, you can only make money playing covers at
weddings. The distinction in software between product companies and consulting
companies is the same.

~~~
daniel-cussen
>Corollary: The less talented the founders of a company are, the more they
should focus on things that are not fun or prestigious.

Would it be a good idea for a founder to focus on boring/lame things anyway,
if only as a way to improve his/her odds? Which viable ideas strike you as the
most boring?

~~~
pg
Of the ones I included in that recent list

<http://ycombinator.com/ideas.html>

the most boring is probably 5 (enterprise 2.0), preferably in the form of 7
(something your company needs that doesn't exist).

21 (finance software) and 29 (site builders) are also promisingly boring.

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13ren
_if someone can do it for free, then it will be inevitably free._

I agree. It's similar to reversion to normal profits through commoditization,
but where the costs (labour and capital) can be donated or supported by
advertising.

But "inevitable" means _one day_ it will be free. It doesn't mean "today",
just that your window of opportunity is time-limited.

 _People serious about business should then move to areas where people can’t
replicated it easily, for instance by having_ unique technology _[...]_

Unique technology can be protection by patent law (especially if it really is
original and non-trivial). But how effective are they against well-heeled
corporations - in practice? How effective are they against open source - in
practice? (they are not 100% effective, but I'm not saying they are 0%
effective - just asking _how_ effective)

Unique technology can also be protected by confidentiality, but usually it's
not hard to reverse engineer, if competitors want to. Saas hides your tech
better than software products (that competitors can access), but both can be
reverse engineered. Secret tech does buy you time (how long?). You can keep
ahead indefinitely if you can keep coming up with additional unique technology
Assumptions: there are additional techniques to be found... and it is you who
finds them.

I think _unique technology_ protects against free only to an extent. It can
give you a head-start, during which you can establish other protection - which
will also eventually crumble.

Maybe the best thing is to make something that can't be made for free - like
chewing gum, chocolates, soda, bricks, CPUs - and then use all these
protections to fractionally improve your profits?

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cawel
_if someone can do it for free, then it will be inevitably free._

While this is a trend, it might not always be true.

In France, Mediapart (mediapart.fr) is a website with a focus on
investigation-journalism, built on principles such as independence from
political/media groups.

Subscription fee: 9 euros (14 usd)/month. The project founders are hopeful to
reach a sustainable number of subscribers (which is 65 000, 3 years from
launch; they currently have 8000 subscribers after 4 months).

Conclusion: a high-quality customized product for a niche, although online,
could justify the price - directly paid by the users - for that product.

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saad0105050
Some services (in context of web), these days, are not only free: they offer
their users (and eventual contributors) a piece of their cake, too. Random
examples are google (search + adsense), and scour (search + annotation).

I wonder where this is going to get: how strong will the "make money too"
factor prove over "it gives me what I want" motivation?

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Eliezer
Free content drives out unfree content.

~~~
decadentcactus
_Good_ free content that is

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pierrefar
Website is timing out for me...

~~~
mattmaroon
Apparently nobody could fix it for free.

