If you’re wondering who writes Chris Anderson’s tweets, now that his new book, FREE, has hit the New York Times bestseller list, the answer is: he does. “No minions, @chr1sa is me,” he told me in a Q & A we did by phone this week. Anderson the longtime editor-in-chief of Wired Magazine as well as the author of The (also bestselling) Longtail, says he doesn’t have minions who do his “thinking” work.
Chris is keynoting the upcoming GrowSmartBiz conference in D.C. (Sept. 29, 2009) and I wondered how “free” (a price of $0.00) would play with a small biz audience concerned about declining sales, or even staying in business, in today’s down economy.
In our interview, he talked about what is – and isn’t – radical about free and how different kinds of free apply to small businesses, depending on whether or not their product or service is digital. (See my review of FREE.)
DW: Isn’t the notion of making products or services available for “free” threatening to small businesses?
CA: First of all, free shouldn’t be scary to everybody. And my book doesn’t argue that everything should be free. The book says that free is the best form of marketing. Free lowers the cost of starting a business, particularly a Web business. We can now use open source software, hosted servers, we don’t need to buy hardware. I’ve started two companies (ed note: the newest one is BookTour.com) on two credit cards. The technology out there is free, or close to it.
He mentions Microsoft’s BizSpark program which provides free software and technical startup to startups which are less than three years old and making less than US $1 million in revenue.
Free is the most misunderstood four letter word in the world beginning with F.
– Chris Anderson (Sept. 1, 2009 interview)
DW: Explain the freemium business model which you talk about a lot in the book.
CA: The freemium model means having two versions of your product, one free and one paid. It means you let people sample your products for free, so the product markets itself. For example, most of the iPhone apps have a free version as a way for people to decide for themselves. You figure two to five percent are willing to pay, so that’s how you make money. Everyone is coming around to some variation of freemium; of course someone has to pay.
DW: Can you comment on the death spiral of print newspapers and the obsession over what should be free vs. what should be paid?
Malcolm Gladwell is a little myopic right now. He’s just seeing the world through the media lens. The New York media world is going through an industrial shift. The problem is not free, it’s infinite competition as presented through the Internet.
DW: What is truly radical about the price of $0.00 and does it in fact apply to small businesses that are not primariy digital?
If you’re making muffins, then nothing much has changed. You use free as a marketing gimmick.
– Chris Anderson
CA: The new form of free that is, in fact, a new business model is not exclusively digital. But it only affects businesses with near zero marginal cost. That applies to a lot of intellectual property where the actual cost of the product is near $0.00. But if you’re making muffins, then nothing much has changed. You use free as a marketing gimmick.
DW: Does every small business need a blog and to be on Twitter?
CA: Every business needs a Web page. But my dry cleaner doesn’t need to be on Twitter. One rule about the Web is that you should not generalize. Ask yourself: what kind of relationship do I want to have with my customers? What do I have to say? How can I become more present in their lives?
DW: Wired magazine has been published since March 1993. What is your social media strategy?
CA: We don’t have a brand-wide social networking strategy at Wired. We have completely failed to find generizable strategies that work across the board. Every one of our blogs is different.
DW: Talk about the free versions of your book vs. the paid? (Hardcover is $21.59 on Amazon.) You’re not afraid of the free versions cannibalizing the paid?
CA: It’s classic freemium. The digital form is free but we think the physical form if better. If you believe in physical books, then you shouldn’t fear digital books. My main reason to get the book out there for free is for awareness, to get it read. I’d much rather have people read the book and then discuss it. One of the problems with a title like free is that they look at it and think it’s moronic.
I don’t know if it’s two different groups (consuming the free versions, vs. purchasing the print edition). But you can’t read 80,000 words digitally. Some people buy the print book so they can read it on the couch. Others may recommend the (free version) so it’s word of mouth. Then there are people who want different versions (audio, digital, paper).
If some aspect of what you do can be turned into software, consider it. That allows you to participate in the free economy where the digital form of free can work.
– Chris Anderson
DW: Is there a dedicated blog or site for the book?
CA: I don’t believe in book blogs.
DW: Talk a little more about the freemium business model as it applies to your book.
CA: Well, there are probably 300 freemium business models (Ed note: 50 pretty obvious ones are listed at the back of the book). There is no one size fits all. So that’s what my speeches are for (i.e. to explain to a given audience what their best freemium model is). There are an infinite number of niches. At Intel I’ll focus on one thing, at Adobe another, at Gap another and so on.
DW: So what is the one piece of advice you’d give to small businesses in this new Web-enabled economy dominated by free?
CA: If some aspect of what you do can be turned into software, consider it. Because that allows you to participate in the free economy where the digital form of free can work.
Why $0.00 Is the Future of Business (the original article in Wired Magazine)
Download the free audiobook version
PDF notes for the book with live links
Interview with Chris Anderson on GrowSmartBiz blog
Will Work for Praise: the Web’s Free Labor Economy (Business Week)