On Wednesday night, I had the pleasure of hearing Chris Anderson, author of The Long Tail and the editor-in-chief for Wired magazine, speak at the 18th annual Economic Insight Summit in Seattle. He is finishing his second book, titled FREE, which suggests as its premise that the future of business is giving away more.
In the past, the business model has been built around giving away 1% in order to sell the other 99%. Anderson’s belief is that the future of business will be giving away the 99% in order to sell the 1%.
This is a powerful concept for any service or investment provider. The internet makes it possible to distribute information for nothing, or nearly nothing. That means that all investment information is in the process of becoming free, or—at the very least—much lower cost. You can already see this taking place in specific industries like real estate. Zillow, Trulia and Redfin, for example, are taking market share and changing the rules of the game within the real estate community.
Service providers have two choices when approached with this phenomenon. They can choose to fight it, as the music executives continue to fight the idea of sharing music online, or they can embrace it. Those who choose to fight may find themselves in a situation similar to music executives who are spending their energy to hold onto slipping margins in CD sales.
Others within the music industry are embracing the change. Prince, or the artist formerly known as, recently released his entire CD free with copies of The Daily Mail in England. Why would he do that?
CDs are low-cost to replicate. My guess is that The Daily Mail or some other advertiser happily obliged to pay the cost of CD production and distribution in order to drive exposure for their businesses. Prince, on the other hand, was selling tickets to his concert at Wimbley stadium for $600 a piece. He used the CD as advertising to push his concert.
Prince used his music—a resource now abundant through online music-sharing—to drive traffic to a scarce resource—seats at Wimbley stadium. How can you use the power of the internet to share information that will become abundant (your knowledge) in order to drive revenue through your scarce resource (the specialized services you provide)?
This was precisely the question that led to the development of our “how to” article platform for alternative investment service providers. It is a way to share knowledge that can grow your business by expanding your audience, establishing your expertise, and driving traffic back to your website.
There are plenty of platforms and avenues to make this trade across the internet: your knowledge for business exposure. Consider embracing that trade now and you can gain market share in your niche. Fight it at your own peril.