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.

Food for Thought: Series II

I had shared some noteworthy articles last month and decided that it’s a good habit to keep up.

Search: Not Provided: What Remains, Keyword Data Options, the Future

What happens to SEO efforts and Digital marketing when one of your major chunks (organic keyword level data) is not available. Avinash Kaushik gives advice on how to go about working with keyword data and why Google started encrypting organic traffic.

This is a far better approach than simply bitching about Google and hatching conspiracy theories of Adwords trying to maximize their revenues!!

Google+ Guide for Small Businesses

A detailed and step by step guide for Small Businesses to develop their presence on G+. Not only is it very thoughtful, but also it provides links and answers to all the quetsions that you might get stuck. And an awesome UI to boot as well!!

Disillusioned with Facebook? Here’s a way forward

It’s easy to dismiss Facebook as a time sink and a negative ROI generator. I did that. However as time went by, I realized that maintaining a presence on social networks is almost a health factor these days. Darren Rowse of ProBlogger walks us through some of the more important things to keep in mind as you go about trying to rustle up a community on Facebook. All the Social Media Managers out there, you HAVE TO read this.

How to track online RoI of offline marketing

This post is quite close to my heart. It is about measuring the Return on Investment (RoI) of Offline advertising. Traditionally to calculate the RoI, brands would use agencies which specialized in marketing surveys. However, with the boom of Indian e-commerce and the influx of venture capital, most of the online mediums have started offline advertising as well. How does the digital marketing manager of such a firm tackle the RoI calculation? Here is a basic explaination of how you go about Trackign RoI of Offline advertising.

What is Life?

What is Life? is based on a series of lectures delivered at the Dublin Institute for Advanced Studies by Erwin Schrodinger. This was first published more than 50 years back, and it has found its way in the blue nothing. The PDF file is a lengthy dialogue which meanders through the physical composition of a cell to the destruction of the identity of life using means such as hypnosis. I have to warn you that if you do not take lightly to abstract concepts and discussing them for the sake of discussion itself, then do not read this document. Having said that, this is Food for thought after all!

New social network on the block So.cl

On 2nd Feb 2012, I received a mail from FUSE Labs. It was about Microsoft Research team’s new experiment. Happy to get a beta invite, I jumped on-board – it was 7am early in the morning when I had decided to check my mail. I got so absorbed checking out the site that I hardly noticed an hour fly by!

Up front So.cl is less confusing than Google+, here’s what it seems to do –

  • You can get in touch with random people and can follow-unfollow them (ala Twitter, G+)
  • Rich media looks really good on the site
  • A new feature which I found really cool was Video Parties (crowd-sourced video playlists which keep playing in one section of the site)

Here’s the catch!

To add posts on this social network, you have to search for terms … on Bing. Yes. on Bing.

They have really taken search social. Something that Google+ is doing slowly and carefully, Microsoft has twisted the entire approach and done a bold step under the name of an experiment.

It’s definitely worth a shot, do give it a whirl here.

You will require a Facebook ID to register and login, which kind of acknowledges FB as the king of all social networks.

Facebook monetizes

Facebook keeps changing its layout, looks, etc ever so slightly and so constantly that most users do not even notice the changes … until it hits them smack on the head. That’s what I like about these FB Apps, revisit the games after 3 months, and the game has also evolved … it has got more items, more plots … somehow it has become more interesting.

That’s why when I started playing Hero World, I couldnt help but notice that instead of having micro transactions through pay-pal or some such payment gateway, the game also had Facebook credits as a currency source. On further digging, I found that Facebook is offering users to buy Facebook Credits. Users can then exchange these credits with different applications.

Instead of carrying out micro transactions within games, now we can carry them through Facebook itself. Good to see a definitive revenue stream other than eyeballs and ads.

Edit: After seven years, revisiting this post in the December 2017. Facebook now boasts of a robust advertising model.