Free stuff is awesome. Since we love getting free stuff ourselves, a large part of Brave New Rich’s energy is devoted to curating the best free resources for entrepreneurs on the web.
But despite popular business folklore, you can’t build a successful business based on giving stuff away forever. You can – and should – give out tons of free samples of your product/work/expertise to generate buzz and new customers. You can do this forever. But unless you’re running a charity, eventually an economic transaction must take place. Somebody needs to get paid.
Allegedly, this was the lesson of the dotcom bust…but as usual we all forgot and the ‘eyeballs first’ model is again front and center in the web 2.0 world. We’ll see it again in 3.0, 4.0, and all other iterations.
Wouldn’t it be nice if a successful entrepreneur could stand up and say “This is DUMB”. That, in a nutshell, is the theme of this awesome, FREE, video by David Heinemeier Hansson, the founder of 37Signals and the creator of Ruby on Rails.
It’s nice to dream about becoming the next Facebook or Twitter, but as Hansson explains to Forbes, it can be dangerous for most start-ups to build their business model based on those assumptions.
“Startups these days are getting all the wrong lessons,” says Hansson. “[They think] that all that matters are users, that they should take on plenty of debt from venture capital investments because something magical will come along at some point and everything will be okay. But you can’t make up something in bulk that is a losing prospect to begin with. Isn’t that self-evident?”
