It’s easy to make Internet Marketing and entrepreneurship seem revolutionary. And a lot of the cool tools that are available now — blogs, YouTube, Twitter, Content Management Systems (CMS) like WordPress, payment infrastructure platforms like PayPal, etc. — have completely changed the game for entrepreneurs who are trying to sell stuff to a bigger audience. All of this is new, and it’s very real.
But business is still business. Economics is still economics. As a result, there’s an enormous amount of stuff that has not changed – and never will.
Jack Humphrey has a great post on this at Friday Traffic Report. He also hits on the crux the whole “freeconomics” debate.
Really, the only high-value thing we as publishers can charge for with no guilt whatsoever is saving people time. Yet there are thousands who are flat out pissed off that they can no longer sell stuff that used to sell really well, but had little true value, because the jig is up.
Nothing has really changed except that it is far harder to scam people these days. The web is growing up. Business is tougher because it is being reset to normal. Or as normal as it can be on the web.
Jack really nails it with the comment about saving people time. If a person makes $50,000/year, their time is worth about $25/hour. ($50,000/year divided by 50 weeks, divided by 40 hours/week). Obviously some folks a lot more than that, but let’s call it $25/hour.
If you can sell that person something that: a. they want or need, and b. saves them 5, 10, 100 hours…then you’ve got yourself a real business model.
GigaOM Pro is a really neat experiment along these lines. For a $79 yearly subscription, they’re selling access to research reports and “curated” links to great technology content, hand-picked by their analysts and editors.
If you had an enormous amount of time on your hands, you could probably cobble together a lot this stuff yourself. You wouldn’t get access to GigaOM’s proprietary reports, but you could probably get up to speed on, say 75% to 80% of the material just by reading a bunch of good tech blogs.
But why bother if you can pay GigaOM Pro to do it for you? If you’re interested in staying on top of the topics that they cover, $79 is a steal. To justify their pricing, all they need to do is save you an average of 3 to 4 hours a year.
There will always be people who will just never pay for anything – regardless of how awesome it may be. That’s true offline and online. You can ignore those people.
The ones that matter are the people who are strapped for time and need help with stuff. This is classic Economics 101. Here’s another way to think about it. A lawyer makes $500/hour. His secretary makes $20/hour. But let’s say the lawyer is better at everything the secretary does — he’s faster at typing, more effective on the phone, better organized, and even better at making coffee.
Why doesn’t he just fire his secretary and do it all himself? Because every hour that he spends doing $20/hour work is an hour that he can’t spend earning $500 being a lawyer. If he’s an irrational cheapskate, he might fire the secretary. If he’s rational, he will always be better off paying someone else to do the secretarial stuff. This is an Iron Law of Economics and will never ever change.
