Embracing Free

We all agree that change is taking place in digital media. What surprised me the most is how our fear for loss sometimes overshadows joy for new opportunities.

Looking at the model again: Facilitation Cost / Aggregate Value

Facilitation method is being revolutionized, facilitation cost is going down, way down. So any business and career built around that value proposition will be difficult.

Aggregate value represents the value created by aggregated participation (facilitated by digital media). Facebook uses software and web technology for facilitation. The aggregate value include the enjoyment and opportunity for communication among members, as well as commercial value enjoyed by owners of Facebook.

Aggregation value is the real upside, that’s where we want to be. Writing a reivew or contribute a piece for Wikipedia provides a certain amount of satisfaction. Starting a popular blog and drawing a large crowd may lead to a modest financial gain. Yet it takes special skills and creativity to develop a social media platform, reaping even more rewards.

Why would Yahoo hesitate to match the “free” offer? In the email market, wasn’t it already in the enviable position Google wanted to be in? There is prehaps the factor of margin erosion, and different financial and competitive positions. The real difference is the mindset, one says “free is going to cost us”, and anther says “free is going to help us”.

I believe “topple rate” applies only to companies and individual who fall behind in mindset. Yahoo is focused on keeping facilitation cost down, but lost sight of creating exponential aggregation value. Microsoft never lacked the cash, and still doesn’t today. “Free” is a mindset to embrace a new world, but it takes courage and vision.

Loss of an “institution” may not be so comforting, but it is not nearly as horifying as some would want us to believe . Change is inevitable. “Free” is a a world of opportunities to embrace.