Leveraging Free

"Free" has been a founding concept in the Linux world since before there was Linux — or GNU/Linux, if you prefer. In his history of the GNU project, Richard M. Stallman begins, "When I started working at the MIT Artificial Intelligence Lab in 1971, I became part of a software-sharing community that had existed for many years. Sharing of software was not limited to our particular community; it is as old as computers, just as sharing of recipes is as old as cooking."

And the rest of the world is finally, irrevocably, catching up. Chris Anderson, Editor-in-Chief of Wired, is Free! Why $0.00 Is the Future of Business. In Will Money Follow Free, Jay Deragon (co-author of The Emergence of the Relationship Economy) — a book for which I wrote the forward), makes a subtle and important point about how business works:

In the old business models markets were chased and developed based on “relationships”. The old business models served the markets with a mindset of “capture and contain” rather than “attract and give“. In the old business models the predominant influence was from sales and marketing divisions because they had or created the relationships. If the top sales and marketing people left one firm for another the relationships typically followed. The old system tried to contain relationships by putting “non-compete” agreements on people and heavy handed legal agreements with customers and suppliers, people. You can institutionalize processes but the choice about relations has always been and will continue to be free.

Jay also points to Kevin Kelly's Better than Free, in which Kevin says it's helpful to think of free in terms of replication:

The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free....

This super-distribution system has become the foundation of our economy and wealth. The instant reduplication of data, ideas, and media underpins all the major economic sectors in our economy, particularly those involved with exports — that is, those industries where the US has a competitive advantage. Our wealth sits upon a very large device that copies promiscuously and constantly.

Yet the previous round of wealth in this economy was built on selling precious copies, so the free flow of free copies tends to undermine the established order. If reproductions of our best efforts are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can't be copied becomes scarce and valuable.

When copies are free, you need to sell things which can not be copied.

Well, what can't be copied?

There are a number of qualities that can't be copied.

Kevin then outlines eight "generatives" that can't be copied: immediacy, personalization, interpretation, authenticity, embodiment, patronage and findability.

Jonathan Zittrain has a new book about the generative power of both the Internet and PC, titled The Future of the Internet — and How to Stop It.

I'm writing this at Logan airport, just a few minutes before boarding a plane, so I don't have time to add much beyond my expectation that those who bet on generativity will win, and that those who bet against it will lose.

The sweet irony of the success of free software is that little of it was written for profit. Most of it was written simply to solve practical problems. The result is an endless abundance of highly practical and easily copied (or, in RMS's terms, shared) building materials from which anything can be made, quickly and easily.

All of the scarce things Kevin lists can fall under the heading of relationships, which — far more than transaction and money flow — are the binding connective tissue of business.

A year ago I wrote here about Building a Relationship Economy. A year before that I wrote about The Intention Economy.

At ProjectVRM, we're working on both. But we're not alone. Look for public radio to make the most of free. And soon.

Stay tuned. :-)

(Looking to add more to this after I get to Los Angeles... In the meantime, this will have to do.)