The Illusion Of “Free”

Today, I participated in an interesting conversation at the Conversation Age blog hosted by Valeria Maltoni The post and accompanying comments focused on Ning's announcement last month that it was eliminating its free service to focus exclusively on serving paying customers — of which I am one. The majority of commenters agreed that Ning's announcement was a type of betrayal, and I was surprised to see several statements that Ning could no longer be trusted as a business service provider. There was even a call to boycott the service.

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I agree that Ning's announcement was brash, presumptuous and rudely delivered. It was also clear, and eliminated all possible doubt about the direction of the company. Ning gave ample notice for free account holders to decide whether to move their content elsewhere or upgrade to Ning's premium platform. (I feel badly for people who cannot easily export their content. Ning should make that easy.)

But looking at the bigger picture, any for-profit business owner who wishes to host a profitable content-based social network should understand the importance of owning or at least paying for the outlets where that content resides. I decided early on to host my social network using Ning's premium service. As a for profit business owner serving professional people, I wanted a professional community. I wanted to demonstrate to my visitors that I had invested in them before I asked them to invest in the community. This is a subtle but vital message that all community leaders must send.

Here are some additional thoughts.

  1. “Free” is an illusion. If you are getting something for free, it is either not really free or it won't be free for long. Would you give your products and services away for free as a business model for an indefinite period of time? I wouldn't.

    Even if Ning did behave as though it would always offer a free service (and it did so behave), it seems to me that the business owners using Ning to host and provide value to communities might still have spent some time thinking about making those communities a profitable part of their business.

  2. Don't use a third party service to form the basis for your business model. Small business owners should leverage as much as possible the free digital and new media services that are available today. But they should not rely on them to form the core of their business model. While there is never a guarantee that any service provider, paid or unpaid, will not pull the rug out from under you, the chances of it decrease if you are paying them to serve you.

    If you want to profit from content, you have to create relevant content and encourage others to engage around that content. This is hard work, and it cannot be done profitably unless there is a plan to generate a profit.

    Under Ning's new program, the most anyone will pay for premium service is $49.95 a month. If you cannot sell $49.95 in products and/or services each month, or find a sponsor to help you break even, there is no solid business model to speak of in the first place. Simply having a Ning site will not fix that problem..

  3. Invest in your business before expecting others to do so. It is unreasonable to ask a business owner with whom you have an arms length relationship to invest in you before demonstrating that you are willing to invest in yourself.

Free is an illusion. Ning is in business to make money. It is not in business to keep us in business without a corresponding financial benefit to itself. I don't think that's unusual or unfair. It's to be expected.

Question: What do you think of Ning's decision? What do you think of the perspective that none of us should rely on free services to form the basis for our core business model?

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About Donna Maria Coles Johnson

Donna Maria is an author, podcaster, attorney, and the founder and CEO of the Indie Business Network, providing affordable product liability insurance and mentoring. Donna Maria teaches Makers and Creative Entrepreneurs how to use technology and community to build a profitable, sustainable business.