What’s the real price for free?

I loved this quote by Tristan Harris in the New York Magazine article The Internet Apologizes … “We cannot afford the advertising business model. The price of free is actually too high. It is literally destroying our society, because it incentivizes automated systems that have these inherent flaws. Cambridge Analytica is the easiest way of explaining…

via The Price of Free is Actually Too High — Feld Thoughts

Brad Feld, the author of the above piece is a VC at the Foundry Group. He is also a regular blogger, and when you do find the time, do read through his thoughts on entrepreneurship and start-ups.

One of the discussions that I keep having with founders of different start-ups is how the free now, pay later model is slowly making users devalue the product.

The price of free

So what is the price of free?

Think about the product which is being offered for free. If you are using the product, and you have paid a cent, then, there is a good chance that the product might be using you!

Hence the reference to Cambridge Analytica and Facebook in the article. We use this social media platform so routinely, similar to Google … it has permeated into our very lives itself.

The amount of data that the free product therefore has to gather goes up. The data is then churned, and out of that valuable insights are generated.

Or else, they could simply sell the data!!

Really? Isn’t this illegal? Who does that?

Take places in this world where privacy laws are so draconian, or take countries where the common man is discovering the beauty of the internet (and its dark sides as well), or take areas where the sheer size and volume of the nation makes it difficult to really control … well anything and everything!

Does that ring a bell?

In India, the IT Act of 2000 has been reigning supreme for the past 18 years. Even then, the average joe out here barely even knows what kind of activity makes him liable for a case under the IT Act. Where the laws are not understood, how do you think the population is going to work react?

They are going to react as per their own personal code of ethics and morality. For some, it would be inline with the IT Act, for some it would be a far cry. Sending corporate data over email to a friend … sure! Email spamming a bunch of email-ids … why not!

A lot of times, since the target (or to use a nobler word – purpose) is known to people, the code of ethics is often kept aside. Let the purpose be achieved, no matter what.

In such a “purpose” driven environment, do you think that cyber crimes and leakage of data is going to be noticed?

Think about the product’s purpose

Now, think about the product.

and it’s purpose.

The initial purpose was to solve a problem. However, now we are giving it for free. The purpose shifts to getting these free users to convert. The problem changes. So does the product.

Remarketing campaigns are launched, I already spoke about this. Conversion Rate optimization is taken up … not to solve the users problem, but to get the user to pay.

I am not saying this should not be done. However, if that’s what’s kept at the center of the product, then the product’s very nature changes. That’s the real price of free.

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