FOLLOW THE FREE

Act as if your product or service is free.

Magazine publishers do this. The cover price on a magazine barely covers the cost of printing it, so publishers act as if they were giving it away (and some actually do). They make their money instead on advertising. Says pundit Esther Dyson, “The creator who immediately writes off the costs of developing content–as if it were valueless–is always going to win over the creator who can’t figure out how to cover those costs.” Memberships in serious discounters such as Cendant are also “as if free.” Cendant “gives away” the merchandise very near the cost of manufacturing, as if the stuff were free. They make the bulk of their profits not from selling goods to its members–who get fantastic retail prices–but from selling $40 per year membership fees.