Comments on: The “Free” Model is Killing Start-Ups; Why I Built Trackur to be Different http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html Internet Marketing News Fri, 10 Feb 2012 17:00:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chris http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-57020 Chris Fri, 03 Oct 2008 07:34:47 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-57020 I agree wholeheartedly about avoiding VC capital - why make yourself a slave to debt and push back your breakeven point right from the start. I began my first business without a loan, VC capital or much in the bank and it was a real struggle at first - but boy am I glad I did it that way now. I agree wholeheartedly about avoiding VC capital – why make yourself a slave to debt and push back your breakeven point right from the start. I began my first business without a loan, VC capital or much in the bank and it was a real struggle at first – but boy am I glad I did it that way now.

]]> By: Pick Of The Week - 31st May 2008 | Dalton's RTFM http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-51149 Pick Of The Week - 31st May 2008 | Dalton's RTFM Tue, 01 Jul 2008 10:58:17 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-51149 [...] Beal writes The “Free” Model is Killing Start-Ups; Why I Built Trackur to be Different taking a look at the FREE business model saying “The biggest flaw with the “free” [...] [...] Beal writes The “Free” Model is Killing Start-Ups; Why I Built Trackur to be Different taking a look at the FREE business model saying “The biggest flaw with the “free” [...]

]]> By: Andy Beal http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48523 Andy Beal Thu, 29 May 2008 13:26:22 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48523 @Marc - I guess I'm trying to make the post about the model, not the product. Still, you could have clicked the link to the Trackur site. ;-) @Marc – I guess I’m trying to make the post about the model, not the product. Still, you could have clicked the link to the Trackur site. ;-)

]]> By: Marc Meyer http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48522 Marc Meyer Thu, 29 May 2008 13:16:59 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48522 It's funny Andy, but I did not see a brief explanation of what your product does in your opening post. While granted, some will work harder to find out what it is exactly, others who are skimming the post might have benefitted from a quick blurb on what exactly it is... Maybe it's the inner marketer in me who has too much time to look at silly things like that. I even re-read twice to see if I missed it... One question I have for you is, are their tools that you use, that are free? And if they were not offered for free would you be willing to pay for them? What about the RadioHead business model? I know some have used that with varying degrees of success.. <em>Marc Meyer's last blog post..<a href='http://emersondirect.wordpress.com/2008/05/28/10-random-social-media-facts-lists-and-questions-i-have-for-our-web-20-world/' rel="nofollow">10 random social media facts, lists and questions I have for our web 2.0 world</a></em> It’s funny Andy, but I did not see a brief explanation of what your product does in your opening post. While granted, some will work harder to find out what it is exactly, others who are skimming the post might have benefitted from a quick blurb on what exactly it is… Maybe it’s the inner marketer in me who has too much time to look at silly things like that. I even re-read twice to see if I missed it…

One question I have for you is, are their tools that you use, that are free? And if they were not offered for free would you be willing to pay for them?

What about the RadioHead business model? I know some have used that with varying degrees of success..

Marc Meyer’s last blog post..10 random social media facts, lists and questions I have for our web 2.0 world

]]> By: Fernando Bresslau http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48461 Fernando Bresslau Wed, 28 May 2008 20:12:45 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48461 Hi Andy, I agree more with your last comment that "free has its space", but not too much with your initial post on thw WSJ. "Free" by itself will not bring revenues. Revenues come when free is used in a sound business strategy which has a clear way of generating money. Twitter is free but does not (yet?) have a business plan. Google is free, but generates revenue through ads. So, in the end, it comes down to what you support throughout your post: the business model. And this model can make use of free or not. You chose not to. A good article on the same WSJ article is, IMHO, this one at techdirt: http://www.techdirt.com/articles/20080522/1545021204.shtml They are much better at explaining the necessary connection between free and business model and between scacity and zero marginal cost. Cheers, Fernando Hi Andy,

I agree more with your last comment that “free has its space”, but not too much with your initial post on thw WSJ.

“Free” by itself will not bring revenues. Revenues come when free is used in a sound business strategy which has a clear way of generating money. Twitter is free but does not (yet?) have a business plan. Google is free, but generates revenue through ads.

So, in the end, it comes down to what you support throughout your post: the business model. And this model can make use of free or not. You chose not to.

A good article on the same WSJ article is, IMHO, this one at techdirt:
http://www.techdirt.com/articles/20080522/1545021204.shtml

They are much better at explaining the necessary connection between free and business model and between scacity and zero marginal cost.
Cheers,
Fernando

]]> By: Brian Clark http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48433 Brian Clark Wed, 28 May 2008 18:13:38 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48433 Imagine that... charging for stuff. :-) You know you'll get no arguments from me on this issue. And I hope to take a closer look at Trackur this week... I'm way behind! <em>Brian Clark's last blog post..<a href='http://feeds.copyblogger.com/~r/Copyblogger/~3/299917867/' rel="nofollow">A Cranky, Skeptical Loudmouth Looks at Social Media Marketing</a></em> Imagine that… charging for stuff. :-)

You know you’ll get no arguments from me on this issue. And I hope to take a closer look at Trackur this week… I’m way behind!

Brian Clark’s last blog post..A Cranky, Skeptical Loudmouth Looks at Social Media Marketing

]]> By: Andy Beal http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48422 Andy Beal Wed, 28 May 2008 15:26:20 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48422 @Adam - I agree, "free" has its place, but shouldn't be the standard. @Don - you hit the nail on the head with your last paragraph. I'd shudder to think what CTR ads on Trackur would get, and I'm sure I'd need a lot of clicks to make any money that way. @Adam – I agree, “free” has its place, but shouldn’t be the standard.

@Don – you hit the nail on the head with your last paragraph. I’d shudder to think what CTR ads on Trackur would get, and I’m sure I’d need a lot of clicks to make any money that way.

]]> By: Don Draper http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48420 Don Draper Wed, 28 May 2008 15:10:34 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48420 We've had the same issues over at Promote-My-Site. We provide some free tools with the goal of getting awareness, and we monetize with ads. The problem is that this doesn't work well with tools -- people are focused on their task and tend not to click the ads. But for building up a group of users, it's been a great strategy. Our plan is to start rolling out some premium tools with a ready audience. But if it were all free, I doubt you could bring in enough revenue to cover the cost of the development. I think a lot of what we see "free" on the internet is because people wouldn't pay for it. It's a question of business value. Do the math: if you can sell ads for $1 CPM, you'd need 250K hits to make the same money that you could get from 5 paying customers at $50. The free model doesn't work with small target audiences. It's a heckuva lot easier to find 5 paid customers than 250K hits if you're providing real value. <em>Don Draper's last blog post..<a href='http://promote-my-site.com/index.php/229-Social-Suite-Beta-Tester-Saves-a-Week-a-Month-with-Digg-Analytics.html' rel="nofollow">Social Suite Beta Tester Saves a Week a Month with Digg Analytics</a></em> We’ve had the same issues over at Promote-My-Site. We provide some free tools with the goal of getting awareness, and we monetize with ads. The problem is that this doesn’t work well with tools — people are focused on their task and tend not to click the ads. But for building up a group of users, it’s been a great strategy. Our plan is to start rolling out some premium tools with a ready audience. But if it were all free, I doubt you could bring in enough revenue to cover the cost of the development.

I think a lot of what we see “free” on the internet is because people wouldn’t pay for it. It’s a question of business value.

Do the math: if you can sell ads for $1 CPM, you’d need 250K hits to make the same money that you could get from 5 paying customers at $50. The free model doesn’t work with small target audiences. It’s a heckuva lot easier to find 5 paid customers than 250K hits if you’re providing real value.

Don Draper’s last blog post..Social Suite Beta Tester Saves a Week a Month with Digg Analytics

]]> By: Adam Sherk http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48419 Adam Sherk Wed, 28 May 2008 15:01:30 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48419 Makes sense. I think the "free" model has merit but there has to be a logical connection, as in some of the examples in that article - giving away razors to create demand for and sell razor blades, giving away music to create awareness and sell concert tickets and merchandise, etc. With web services that connection is typically generating ad revenue or gaining enough attention and users to be acquired. But advertising is not always a logical fit, and hoping to be acquired is not exactly a sound business plan...In addition individual entrepreneurs are not always in a position to use a loss leader model. Makes sense. I think the “free” model has merit but there has to be a logical connection, as in some of the examples in that article – giving away razors to create demand for and sell razor blades, giving away music to create awareness and sell concert tickets and merchandise, etc. With web services that connection is typically generating ad revenue or gaining enough attention and users to be acquired. But advertising is not always a logical fit, and hoping to be acquired is not exactly a sound business plan…In addition individual entrepreneurs are not always in a position to use a loss leader model.

]]> By: Andy Beal http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48409 Andy Beal Wed, 28 May 2008 13:39:33 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48409 @Adam - I read that article while flying to a conference. It made me think long and hard about Trackur's revenue model. After much back and forth, it came down to this: a free model would bring more publicity, but not revenue. A paid model would take more work, but generate revenue from day one. How many start-ups do you know generate revenue--or make a profit--from day one? ;-) @Adam – I read that article while flying to a conference. It made me think long and hard about Trackur’s revenue model. After much back and forth, it came down to this: a free model would bring more publicity, but not revenue. A paid model would take more work, but generate revenue from day one.

How many start-ups do you know generate revenue–or make a profit–from day one? ;-)

]]> By: Adam Sherk http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48407 Adam Sherk Wed, 28 May 2008 13:26:48 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48407 It's funny, just today I was reading a Wired article from a few months ago called "Free! Why $0.00 Is the Future of Business." It's a different situation to your case but Chris Anderson makes some interesting points. http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=all It’s funny, just today I was reading a Wired article from a few months ago called “Free! Why $0.00 Is the Future of Business.”

It’s a different situation to your case but Chris Anderson makes some interesting points.

http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=all

]]> By: Frank Reed http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48403 Frank Reed Wed, 28 May 2008 11:37:16 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48403 Andy, Couldn't agree more. The "entitlement" mentality that we see in life in general has bled over into the idea that everyone deserves what they want just because they want it. Not sure what happened along the way, but the last time I checked the definition of "profitable" there neede to be an exchange of funds! Keep up the great work. Andy,

Couldn’t agree more. The “entitlement” mentality that we see in life in general has bled over into the idea that everyone deserves what they want just because they want it. Not sure what happened along the way, but the last time I checked the definition of “profitable” there neede to be an exchange of funds! Keep up the great work.

]]> By: Tyler Banfield http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48386 Tyler Banfield Tue, 27 May 2008 22:34:41 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48386 It's funny that we've gotten to a point where many people actually think it's strange to have a business model that involves charging customers :) It’s funny that we’ve gotten to a point where many people actually think it’s strange to have a business model that involves charging customers :)

]]> By: Gregory Brine http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48384 Gregory Brine Tue, 27 May 2008 22:15:06 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48384 Great article Andy. I'm still a firm believer in the "you get what you pay for" ideal. Advertising/marketing space will only go so far - but it can make a nice top up. But charging for a service makes it much more sustainable, and you're less likely to run into financial problems that may alienate and drive away your loyal users. <em>Gregory Brine's last blog post..<a href='http://www.gregory-brine.com/2008/05/24/when-building-a-successful-website-think-beyond-the-presentation-and-back-end-code/' rel="nofollow">When building a successful website, think beyond the presentation and back-end code</a></em> Great article Andy. I’m still a firm believer in the “you get what you pay for” ideal. Advertising/marketing space will only go so far – but it can make a nice top up. But charging for a service makes it much more sustainable, and you’re less likely to run into financial problems that may alienate and drive away your loyal users.

Gregory Brine’s last blog post..When building a successful website, think beyond the presentation and back-end code

]]> By: Profitable Signals: » Blog Archive » Is the issue really ‘Web 2.0′ Properties? http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48380 Profitable Signals: » Blog Archive » Is the issue really ‘Web 2.0′ Properties? Tue, 27 May 2008 21:41:24 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48380 [...] great web applications built on revenue streams other than advertising. I think it’s great some entrepreneurs are choosing this path and don’t want to discount this at all. I am just reacting to the fact [...] [...] great web applications built on revenue streams other than advertising. I think it’s great some entrepreneurs are choosing this path and don’t want to discount this at all. I am just reacting to the fact [...]

]]> By: Profitable Signals: » Blog Archive » Is the issue really ‘Web 2.0′ Properties? http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48381 Profitable Signals: » Blog Archive » Is the issue really ‘Web 2.0′ Properties? Tue, 27 May 2008 21:41:24 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48381 [...] great web applications built on revenue streams other than advertising. I think it’s great some entrepreneurs are choosing this path and don’t want to discount this at all. I am just reacting to the fact [...] [...] great web applications built on revenue streams other than advertising. I think it’s great some entrepreneurs are choosing this path and don’t want to discount this at all. I am just reacting to the fact [...]

]]> By: Andy Beal http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48379 Andy Beal Tue, 27 May 2008 21:30:34 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48379 @Elections guy - don't make me hurt you! ;-) Seriously, go ahead and use the free tools. I listed many of them here: http://www.marketingpilgrim.com/2007/08/26-free-tools-for-buzz-monitoring.html Trackur is much more sophisticated and offers more than Google Alerts or Bloglines. I built Trackur because I thought there must be a better option than using 26 different tools and having to manage each one--and there was, Trackur! :-) @Elections guy – don’t make me hurt you! ;-)

Seriously, go ahead and use the free tools. I listed many of them here: http://www.marketingpilgrim.com/2007/08/26-free-tools-for-buzz-monitor ing.html

Trackur is much more sophisticated and offers more than Google Alerts or Bloglines.

I built Trackur because I thought there must be a better option than using 26 different tools and having to manage each one–and there was, Trackur! :-)

]]> By: Elections guy http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48378 Elections guy Tue, 27 May 2008 21:25:03 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48378 There are a number of free alternatives for TrackUr. With some work you can use bloglines.com Google Alerts, etc. <em>Elections guy's last blog post..<a href='http://chasinggoogle.blogspot.com/2008/05/obama-wins-oregon-primary.html' rel="nofollow">Obama wins Oregon primary</a></em> There are a number of free alternatives for TrackUr. With some work you can use bloglines.com Google Alerts, etc.

Elections guy’s last blog post..Obama wins Oregon primary

]]> By: Don Draper http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48373 Don Draper Tue, 27 May 2008 20:16:24 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48373 To paraphrase BSG, "All of this has happened before, and it will happen again." The first Dot-Com bubble had the same sort of VC and startup excesses. They haven't learned anything from the first brutal lesson. I'd say we're partying like it's 1999 right now. BTW, the companies that survived the last bust all had business models that involved customers paying them money. Imagine that. <em>Don Draper's last blog post..<a href='http://promote-my-site.com/index.php/229-Social-Suite-Beta-Tester-Saves-a-Week-a-Month-with-Digg-Analytics.html' rel="nofollow">Social Suite Beta Tester Saves a Week a Month with Digg Analytics</a></em> To paraphrase BSG, “All of this has happened before, and it will happen again.” The first Dot-Com bubble had the same sort of VC and startup excesses. They haven’t learned anything from the first brutal lesson. I’d say we’re partying like it’s 1999 right now.

BTW, the companies that survived the last bust all had business models that involved customers paying them money. Imagine that.

Don Draper’s last blog post..Social Suite Beta Tester Saves a Week a Month with Digg Analytics

]]> By: Mike Morabito http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html/comment-page-1#comment-48368 Mike Morabito Tue, 27 May 2008 18:49:40 +0000 http://www.marketingpilgrim.com/2008/05/the-free-model-is-killing-start-ups-why-i-built-trackur-to-be-different.html#comment-48368 This is a perspective to have. Thanks for sharing your business philosophy. I would probably do things the same way. <em>Mike Morabito's last blog post..<a href='http://moreburritos.com/2008/05/killer-quotes-that-couldve-been.html' rel="nofollow">Killer Quotes that could've been Creativity Killers</a></em> This is a perspective to have. Thanks for sharing your business philosophy. I would probably do things the same way.

Mike Morabito’s last blog post..Killer Quotes that could’ve been Creativity Killers

]]>