Thursday, March 05, 2009

"Zero" Creates Brilliant New Business Models

If you understand where the zero fits into the business model, then there are plenty of business models that work great.
It makes plenty of economic sense for certain things to be free and then the scarce goods are what you charge for. The trick is enabling a business model where the infinite goods make the scarce goods you control more valuable. This is absolutely possible for any business -- and, in fact, failing to understand how you do this will most likely doom your overall business.

One simple example of this is to use that item that "costs" zero as a promotional good for something that does not have a zero marginal cost.

The band No Doubt, is giving away their entire catalog of music as a download, for folks who buy certain concert tickets.

No comments: