Business Models Built on Free

  • Posted on: 16 March 2016
  • By: Shawn DeWolfe
In the book, "Free: The Future of a Radical Price", Chris Anderson lists fifty examples on free business models. These are broken into three groups, Direct Cross-Subsidies, Two-sided markets, and Freemium.

Free 1: Direct Cross-Subsidies - Any product that entices you to pay for something else
  • Give away services, sell products
  • Give away products, sell services
  • Give away software, sell hardware
  • Give away hardware, sell software
  • Give away cell phones, sell minutes of talk time
  • Give away talk time, sell cell phones
  • Give away the show, sell the drinks
  • Give away the drinks, sell the show
  • Free with purchase
  • Buy one, get one free
  • Free gift inside
  • Free shipping for orders over $25
  • Free samples
  • Free trials
  • Free parking
  • Free condiments
Free 2: Three-party markets - A third party pays to participate in a market created by a free exchange between the first two parties
  • Give away content, sell access to the audience
  • Give away credit cards without a fee, charge merchants a transaction fee
  • Give away scientific articles, charge authors to publish them
  • Give away document readers, sell document writers
  • Give woman free admission, charge men
  • Give children free admission, charge adults
  • Give away listings, sell premium search
  • Sell listings, give away search
  • Give away travel services, get a cut of rental car and hotel reservations
  • Charge sellers to be stocked in a store, let people shop for free
  • Charge buyers to shop in a store, stock seller merchandise for free
  • Give away house listings, sell mortgages
  • Give away content, sell information about the consumers
  • Give away content, make money by referring people to retailers
  • Give away content, sell stuff
  • Give away content, charge advertisers to be featured in it
  • Give away resume listings, charge for power search
  • Give away content and data to consumers, charge companies to access it through an API
  • Give away "green" house plans, charge builders and contractors to be listed as green resources
Free 3: Freemium - Anything that is matched with a Premium Paid Version
  • Give away basic information, sell richer information in easier-to-use form
  • Give away generic management advice, sell customized management advice
  • Give away federal tax software, sell state
  • Give away low-quality MP3s, sell high-quality box sets
  • Give away Web content, sell printed content
  • Give away online games, charge a subscription to do more in the game
  • Give away business directory listings, charge businesses to "claim" and enhance their own listings
  • Give away demo software, charge for the full version
  • Give away computer-to-computer calls, sell computer-to-phone calls
  • Give away free photo-sharing services, charge for additional storage space
  • Give away basic software, sell more features
  • Give away ad-supported service, sell the ability to remove the ads
  • Give away "snippets" sell books
  • Give away virtual tourism, sell virtual land
  • Give away a music game, sell music tracks
Free 4: The Fourth Free that is not listed is not considered a business model: Non-monetary Markets. An example that comes to my mind is to spend nights writing a blog without advertising to build a reputation, continuously develop ideas and concepts, keep yourself updated in a field, get feedback, and get into contact with smart individuals...

Last updated date

Wednesday, March 16, 2016 - 18:29