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Free Just Means Startups Are Afraid to Compete

free(Note: For new startup-related blog posts, head to my ME Consulting Website)

I don’t like free.

Free makes me uneasy because nothing is really free. There’s always some kind of cost involved, even though it can be difficult to see at first.

My aversion to free includes startups that offer free services.

Yes, free is a powerful marketing tool because who, after all, doesn’t like getting something for nothing.

Far too often, however, free is a lazy marketing short-cut that does little to create or drive a business.

There are still too many startups that offer a free service, and then plan to create premium services after they’ve attracted lots of users.

At the same time, there are VCs happy to pour money into these startups, which are popular but hoping they can somehow make their product even better so a small percentage of  users will pay for it.

To me, startups that embrace free (not fermium) are afraid.

They’re afraid no one will like their product enough to pay for it.

They’re afraid the competition is too strong.

They’re afraid of not being good enough at sales and marketing.

They’re afraid to build a business.

This is not to suggest free-first never works but free strikes me as the emperor with no clothes.

Everyone is so enthralled with the idea of attracting lots of eyeballs that no one wants to be the little boy who says “Startup, how do you plan on making money?” (Note: A must-read is Mark Suster’s blog post on why startups need to “ring the cash register”)

There are people who contend free is different for online startups but that’s just digital gobbledygook.

Can you imagine free in the “real world” where you could, for example, walk into a restaurant for a free meal because the owner believes they will be able to charge once it has enough patrons?

Over the past year, I have started to slowly but surely buy or subscribe to more online services.

While it has a lot to do with more features and customer service, a key consideration is supporting startups trying to become businesses as opposed to emperors.

What do you think? Is there any merit to only free or free-first?

More: Check out Connor Tomas O’Brien’s article about how we need to move away from a free culture.

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  • two cents

    How much merit should I give to this “free” advice / opinion? Why not charge for it?

  • http://www.arielmarketinggroup.com/ Amy McCloskey Tobin

    I so GET it. Sometimes I think the same things about consultants – it’s a lot harder to build a BUSINESS than a consultancy.

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