http://www.newyorker.com/arts/critics/books/2009/07/06/090706crbo_books_gladwell

Finally gave up on “Free” by the way. Just couldn’t get past point where Anderson claims that Google can’t be extracting monopoly rents because it gives so much away for free; GMail, Google Reader, etc. Totally misses the point that the rents are on the advertiser side; yes, it is two-sided. He goes on to claim that the fact Google uses an auction system for advertising also means it can’t be monopolistic. Actually, an auction is one of the most efficient ways to extract monopoly rents.

I’ve read both catalyst code and free and both seem to be afraid of the very simple concept of service in their explanation of business models. Neither does a good job of clearing up the discussion because they want to sound cool. It’s fun to talk about free, and it sounds complicated when you come up with complex ‘double sided’ business strategies, but really all I see from most of their examples is a recount of players who are looking at a market and editing business models to change who gets served.

Of course, I’ll use the gell-o (sp. mine) model that Chris Anderson uses to start off his book. In that case giving away cookbooks with free recipes is a way of serving the consumer, by offering up a mnemonic for getting the brand name jell-o to the friendly neighborhood grocer. If you break down this example Anderson is really saying that trade spend (sales focus, marketing materials etc.) went primarily to the grocer, rather than to the consumer. The pre-kraft makers of jell-o (geneesee?) were just using judo tactics, moving the priority to where the scarcity is. Chris Anderson does talk about shifting priorities, but I agree with you using Free is not always the clearest way to do so, it’s just the most controversial.

I think that both books should have been free and they should have a web service that teaches you how to use their ‘new’ business tactics such that you can apply them to your business using statistical scenario planning software.