By choice or by force, many business are quickly turning into free. Default price in many services tends to be zero, and this situation which at first affected music, books and other items, easily reproducible by digital means, now starts to have an effect on physical items too: this was one of the impacts of the transformation of atoms into bits, and this will be one of the consequences of the transformation of bits into atoms. The free circulation of files on-line and the spread of digital fabrication join to create a new background where obtaining a particular object won’t be necessarily related to its purchase, as it could be made for free.
In his book <<The Curve: From Freeloaders into Superfans>>, Nicholas Lovell analyzes in detail this new business context where free products are taken for granted, and proposes solutions for those who are searching for a way to gain their earnings in the current situation. In Lovell’s book, you can find a very interesting and up-rising thesis: you can earn benefits from a free-of-charge business model, the key is just to understand what can you give without cost, who your customers are, and what are they willing to pay for.
Of course, this needs further explanation.
First: What can you give for free? From the many different aspects of your business, surely there are somethings that you can make one single time without assuming a significant cost. This is what you can give for free to anyone interested, or even not interested, in your product or service. This can be a free book about your field, or specialized information, videos, apps… anything which gives the consumer a good idea about who you are or what is your company offering. According to Lovell, this will draw a full crowd of possible customers attracted by the free item. Many of them won’t pay much more attention to you, but some of them will: from there, you can transform a tepid audience into an attentive one, and pick those who might be “fans” or even “super-fans”.
Second: Who your customers are? The Curve goes from freeloaders to superfans, with several halfway levels between them. It is essential to identify your potential customers amongst the crowd of freeloaders, and obtaining the necessary information to satisfy each individual according to their wishes and budget. To gather all this information, you need to use technology not only to get data but to create effective paths of communication. Proactiveness is a crucial point: in a world where producers have become retailers, there is no place for ivory towers. Lovell proposes a decisive turnaround on the freeloader concept: they are the true basis of any business, and fundamental to understand who your customers really are. Even if freeloaders do not provide you with money earnings, they can fulfill other important benefits as evangelists and testers. If you analyze properly your freeloaders, you will understand your consumers. And once you understand your customers, you will infer what they really value from you.
Third: What is your audience willing to pay for? From the explanation above comes the conclusion that you might have a diversified audience: from those who won’t spend one cent for your product, to those who are willing to spend lots of money for the sake of being a serious fan. Between them, a more or less calibrated scale of customers will provide the backbone of your audience. The goal is to establish a wide range of diversified products or services that you can pull out from your current business, and develop a scale of prices that enables everybody to buy accordingly to their level of interest. Give people a good experience for free, and then they will try you by paying. But do not give them just one way of paying for your product, because it could be that they are interested in something else from you or in something more from you: be creative, and give them the chance of spending their money diversely and as much as they want. With clever remarks, Lovell gives examples of creative diversification to make this “curve” (the one which goes from freeloaders to super-fans) in many different areas.
This is a very simplified version of Lovell’s thesis, as the book shows a wider range of possibilities, summarizing many practical cases and exposing pragmatical solutions that need to be read and analyzed case by case. Chris Anderson influence is palpable in many pages: in some ways, the Curve seems the heir of the Long Tail. But even if we just take the core of the book, we can see that it has the great virtue of proposing specific solutions for an actual matter. Nowadays they are appearing exciting defenses of openness as a way of creating a new economy, and they are truly propelling a fresh vision of economic relations and a creative revolution. But discussing openness we always end in the same question: which is the business model? Few people can answer this in realistic terms. In a simple, easy-to-assimilate way, Nicholas Lovell suggests a solution that may be useful, probably not for every kind of business, but at least for many of those whose feasibility start to become impossible.
In our opinion, this might be a solution for small business struggling to survive, but the Curve won’t solve the issues of bigger companies, which are fighting a battle in very different terms. Will lobbyists assume that their business model has to shrink to a more personal, P2P method? Or will they still focus their survival on hardening IP laws, blocking the Internet freedom? Unfortunately, it doesn’t seem to us that in a near future this really might change. The only way that the Curve turns a standard is that it proves so successful that even the biggest players want to play that game for real (I underline this, as we can find a lot of marketing simulation in that sense).
Anyway, this skeptical remark doesn’t reduce the validity of Lovell’s thesis for a considerable assortment of start-ups and endangered companies. The Curve is an spirited proposal which switches on a light at the end of the tunnel, and gives us hope in an economy that allows people to fulfill their interests in a closer scale, based on credibility, thoroughness and keenness. Even if just a few set out on this path, it will be worth to witness it.
3 thoughts on “The Curve: From Freeloaders into Superfans – Nicholas Lovell”
Hi Postdigital! Quite interesting!
Imagine that from now on all teachers -beginning at HE- became entrepreneurs, ie, instead of being civil servants or working full time for only one institution they would have to sell themselves and teach at different universities.
Imagine now that my business would be providing material to this new born entrepreneur teachers such as real short business cases, methodology and the like. I should interview some companies and depict the cases. Indeed, this is basically what I do with my blog, although some are invented.
Should I begin giving this cases away for free? What would be the next step? What about you? (My business and yours are pretty similar, maybe we should cooperate, the same interview, a case for me and a post for you… 🙂
Regards to Alicia!
Hi Pere! Well, not so long ago (IV century a.C.) teachers actually were entrepreneurs, weren’t they? They gave their services in public spaces like marketplaces to whoever wanted to listen to them or, more exactly, to walk with them (peripatetic school). Some of them were hired for their time’s V.I.P.s: i.e. Aristotle was hired as a teacher for Alexander the Great.
It is really an interesting dilema, your question about how to apply “the curve” to education, and it opens multiple debate lines: it makes us think about institutionalization of educational means, about the Internet as a “peripatetic” marketplace, and the crash between the old “Academia” and the new ways of learning. Aren’t MOOCs a reflection of that? In his book, Lovell writes a brief section about Coaches and Trainers which might interest you. In our opinion, your blog is an excellent example of what he advises teachers to do: to create a direct connection with your target.
We really like your blog, and your sharp analysis of real-life cases. Barcelona is living a decisive moment, and you are cleverly remarking problems and solutions there. Something big can happen here! We’d love to collaborate with you. Alicia will contact you separately to explore this further.