Red Hot or Not, Free Presents New Challenges that Require New Thinking
To be successful in a “free” world, entrepreneurs need to transition their thinkingand their companies from a “technology orientation” to “media orientation”. This means thinking in terms of content, audience, and advertising: the 3 core drivers of a media business. Shifting from technology to media means:
- Product becomescontent
- Marketing becomesaudience development
- Sales becomesadvertising optimization
The operational analogy is that the CTO becomes a Chief Content Officer, the VP Marketing becomes the Chief Audience Officer, and VP Sales becomes Chief Advertising Officer. While this may be extreme advice, the “free” business model should at least force management to consider some fundamental operational restructuring that is more aligned with a media business.
Specifically on the sales front, “free” means shifting from a tangible asset sale, software or service, to an ephemeral asset sale,audience attention. Attention is the scarcity online; it is what advertisers demand and buy. The concept of sellingaudience attention is foreign and heady for many tech entrepreneurs, and is often not what they “signed up for” when they launched their companies.
Entrepreneurs usually start companies because they’ve devised a unique solution to a nagging problem. They tend to be passionate about solving that problem and creating the best service possible. They are driven by seeing their product improve the lives of millions of people. This passion for product is essential. But in a world of “free”, the product itself does not directly drive any revenue. It is, in fact, a big loss-leader. Product is “bait” for audience attention.
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