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Three Rules of Free

July 13th, 2005 · No Comments

Tom Evslin writes:

Todays three rules are for those who want to be in the business of establishing a new category by providing free goods or services via the Internet. This is an exponential-curve hit business. The vast majority who try it will fail. The success of the few is spectacular.

The twin lessons of Internet Bubble One are that the free strategy CAN work spectacularly because of friction-free distribution via the Internet AND that the free strategy USUALLY fails.

The winners have three things in common:

1. They lead their category;
2. There is almost no incremental cost to them of providing another unit of whatever it is they give away free;
3. They change the way their users do something which is significant to the users.

The losers fail one or more of these three tests.

Tags: Management

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