The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Welcome to the only entrepreneur forum dedicated to building life-changing wealth.

Build a Fastlane business. Earn real financial freedom. Join free.

Join over 80,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.

Free registration at the forum removes this block.

Unpopular Opinion: "Give Value for Free" is Bullshit More Often Than Not

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
647%
Dec 26, 2014
2,274
14,724
32
Chicago, IL
I know that this opinion on this forum will be unpopular, and that it goes against what all the gurus teach, but after years of reading stories of misled entrepreneurs, I needed to make a post.

Time and time again I see people following this business model:

Give value for free --> People will eventually start paying you. --> You'll be rich.

The theory preached behind this "model" is that to make money, you have to give people value (upfront). You give them value. They understand your worth. And then if they so choose, they'll give you money.

Ok. Nothing wrong with that. However, I want to point out that this model is nothing more than a funnel. It's a marketing tactic.

It has a lot of pitfalls and potential traps for starting entrepreneurs.

For the majority of businesses, it is not a "business model" that you want your business to be centered around. It is one of many tactics that you want to try out before deciding where to allocate your sales/marketing budget, but not something that you want to bet the house on before looking elsewhere.

The biggest problem with the model is that it comes with the requirement of giving value upfront. You give before receive. In a large number of scenarios that could work, but there's one key point that this sort of thinking leaves out:

99% of people will only give you money for FUTURE value. They don't give a F*ck about what you did for them for free before.

Let's go through an example of a bakery in multiple scenarios:
A bakery wants to sell more cookies. To sell more, they have a person stand outside giving samples away.

Scenario #1 where things go well:
Because enough people try and taste the samples, a few realize that the cookies are good, and end up buying a dozen cookies each to take home. The bakery is ecstatic and considers it a success. They end up building their entire business model around giving away samples for free.

Scenario #2 where things go bad:
People try the cookies. Eat as many as they want. End up buying no cookies because they already got their sweet fix for the day. Tomorrow, or whenever they choose, they know they can get another cookie for free, so they end up buying none. The bakery goes bankrupt and the people feel bad, but not to the point where they'll donate to open the bakery up again; they'll just buy they cookies from now on.

Scenario #3 the default scenario without samples:
A bakery puts great looking cookies in the window. Whoever wants cookies, comes and gives them money for cookies.


Using this example above, gurus will tell you that Scenario #1 is the only way that you can build a business. You need to give value upfront before having a chance to receive value.

Bullshit.

Scenario #3 is the most common scenario for a reason. How many of your local bakeries are giving away top quality samples all the time for free? They might do it once in awhile, but there's little to no chance that they're doing it everyday, and if they are, they're only giving you a taste.

This is the same reason why Groupon doesn't work for most businesses.

Or why all the Youtube gurus like @AndrewNC that make videos for free end up getting zero customers. Edit: Alright, maybe they end up getting two or three and then start calling themselves successful entrepreneurs.

It is merely a funnel/marketing tactic for you to get sales.

But to get sales: YOU NEED TO CREATE FUTURE VALUE.

You need to have a product or service that is valuable enough for people to give you money. The book Ca$hvertising puts it best: For someone to give you $20, they have to believe that the $20 they're giving you is worth less than what they're getting. If they believe they're getting $30 worth of value then they'll give you money with zero hesitation.

The only time you should be giving value for free is when you're attempting to increase the perceived value. If you know your service is worth $30, and you're selling it for $20, but no one's buying, then giving away a TASTE for free is worth it to increase the perceived value from let's say $10 to $30.

But if you're giving value away for free, expecting the customer to eventually pay, then you're mistaken.

I saved a former mentor of mine millions of dollars by optimizing his supply chain. I fell into the trap of giving value away for free, assuming that eventually he would reciprocate. You know what I ended up getting? Not shit - because there was zero reason to give me a dollar other than "loyalty".

I have friends that have invested years into the wrong pursuits. I've read countless posts on this forum of people betting their business around these tactics and then wondering why they failed. Time and time again I've seen this model fail.

End of the day, it's a marketing tactic. It is not the only way to operate your business, and more often than not, it does more detriment than good.

You're a freelancer?

What's better? You writing a thousand forum posts here and on Quora? Or you creating a strong landing page and cold emailing a thousand potential clients with a few clicks?

I don't know what's better. That's for you to test and decide. But if you bet you whole business on just one tactic instead of trying multiple until you get traction, then you're an idiot and deserve to fail.

To summarize: Create a valuable product or service. Employ a multitude of tactics to get traction. More likely than not, giving value away for free is bad for your business.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
I'm going to disagree here, but only because the disagreement is dependent on the ultimate value being sold.

If your cookies aren't that good, they're only good FREE, but not worth paying for.

Something worth incredible value that is given away FREE will always be paid for.

If the cookies were awesome FREE, I will pay for them later.

In a more recent example, and real, I recently took a free trial on a financial simulator and backtester. I used it for nearly a month and found it incredibly useful and valuable. I ended up converting the FREE trial into a paid one.

Why?

Because the fundamental product had incredible value.

It was only FREE because the entrepreneur wanted me to see it for myself, and risk free.

When your product is of marginal value, then I would agree with the @AgainstAllOdds post.

But when you're offering real value, the FREEMIUM model is incredibly powerful.

In fact, I used it to build my company many moons ago.

So the real question is...

Is your product of marginal value, so much so that its only true value is FREE?

Or is it of great value, so much so that people can't live without it?

The two statements highlight the difference between a PRODUCTOCRACY and a marketing company. The OP statement seems to fit in with a marketing company, not a productocracy.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

MidwestLandlord

Legendary Contributor
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
759%
Dec 6, 2016
1,479
11,226
never seen a car company giving away free cars every week.

There's a used car lot in my area that gives away a free $5000-ish car every 2 weeks. His facebook posts get 4,000 or so likes every time, and 100+ shares.

I know him, and he sells more cars than he can keep up with. Has put at least half of the other used car lots out of business. He's very niched (sub $6,000 cars and cash only), and plays big on the "free bucket of chicken" mentality.

To enter the contest all you have to do is fill out a form with your name, telephone, and the criteria of what kind of car you are looking for, plus friend him on Facebook. Then magically, when you don't win, he finds a car that fits your criteria and calls you...
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
Unpopular Opinion: "Give Value for Free" is Bullshit More Often Than Not

Yes, because the product being offered is bullshit more often than not.
 

biophase

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
474%
Jul 25, 2007
9,120
43,260
Scottsdale, AZ
I'm also going to disagree. In your scenario, you did not provide value. Walking by a cupcake store and getting a free cupcake isn't value because the person walking by probably didn't want a cupcake. It's like someone giving me a free T-shirt when I don't need one. I won't value it.

With that said, if you know my business, I give away a ton of value.

Scenario 1) Non-profit asks for us to donate 100 goody bags for their event. I offer to make them custom bags for $6 a bag. The event is a big event and gets decent press. I want to ask to become a sponsor and get a place on their advertising banner, maybe get a FB and or IG post. I think a sponsorship placement is around $1000.

Time comes for their payment. I tell them, don't worry about it, it's a donation to your event, with no expectation of anything in return. They reply, thank you, how about we put you down as an official sponsor and make a dedicated FB post about you. I gave value and they reciprocated with more value worth more if I would have had to pay for it.

Scenario 2) I'd like A-list celebrities to tweet, IG my product. But celebs get inundated with free samples and requests all the time. So I try to find if any support non-profits, and find say 10 that do. I help these non-profits any way possible. I try to become an official sponsor of them. Not expecting anything in return, but at least giving myself a .1% chance of a celeb noticing me. If they decide to tweet etc... it will be their decision to help, not my asking.

Scenario 3) Not business related stuff but still great! I donate to a bunch of non-profits. People who run them offer me valuable things all the time because I've provided value to them.

One person is an interior designer for the stars in Hollywood. She says if you ever need your home redecorated/redesigned please let me know. I actually do need my house done now, so I've contacted her.

Another runs a law firm. She says if you or your company ever need any simple legal stuff done, please let me know.

Another owns a car dealership. He says if you want a deal on a new Ford, call me. (Of course, this could be just a sales pitch, but it was from the owner).

So as you can see, people do want to reciprocate if you provide them value. It has to be value though. Like MJ said, he signed up because the product was valuable. How many here pay the dropbox $99 after they ran out of space because dropbox was awesome! I bet that they all started with the free dropbox first!
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
You don't give away value for free. You sell value. But the first taste is FREE.

Ha, such a simplistic statement is so true.

If you need no better real world example of a powerful value proposition and a productocracy, the freemium business model is what drug dealers use.

The product is so powerful, they know the more free trials they give away, the more customers they get.
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
Care to go into more detail?

My paying advertisers joined for FREE. They only paid when they received opportunities. Once they started getting hit with job opportunities and booking them, they paid. They came from a world of "Pay $500 now, and pray later." I got rid of that proposition back when it was virtually unheard of.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

ApparentHorizon

Platinum Contributor
Speedway Pass
User Power
Value/Post Ratio
301%
Apr 1, 2016
942
2,836
Greenville, SC
I know that this opinion on this forum will be unpopular, and that it goes against what all the gurus teach, but after years of reading stories of misled entrepreneurs, I needed to make a post.

Time and time again I see people following this business model:

Give value for free --> People will eventually start paying you. --> You'll be rich.

The theory preached behind this "model" is that to make money, you have to give people value (upfront). You give them value. They understand your worth. And then if they so choose, they'll give you money.

Ok. Nothing wrong with that. However, I want to point out that this model is nothing more than a funnel. It's a marketing tactic.

It has a lot of pitfalls and potential traps for starting entrepreneurs.

For the majority of businesses, it is not a "business model" that you want your business to be centered around. It is one of many tactics that you want to try out before deciding where to allocate your sales/marketing budget, but not something that you want to bet the house on before looking elsewhere.

The biggest problem with the model is that it comes with the requirement of giving value upfront. You give before receive. In a large number of scenarios that could work, but there's one key point that this sort of thinking leaves out:

99% of people will only give you money for FUTURE value. They don't give a f*ck about what you did for them for free before.

Let's go through an example of a bakery in multiple scenarios:
A bakery wants to sell more cookies. To sell more, they have a person stand outside giving samples away.

Scenario #1 where things go well:
Because enough people try and taste the samples, a few realize that the cookies are good, and end up buying a dozen cookies each to take home. The bakery is ecstatic and considers it a success. They end up building their entire business model around giving away samples for free.

Scenario #2 where things go bad:
People try the cookies. Eat as many as they want. End up buying no cookies because they already got their sweet fix for the day. Tomorrow, or whenever they choose, they know they can get another cookie for free, so they end up buying none. The bakery goes bankrupt and the people feel bad, but not to the point where they'll donate to open the bakery up again; they'll just buy they cookies from now on.

Scenario #3 the default scenario without samples:
A bakery puts great looking cookies in the window. Whoever wants cookies, comes and gives them money for cookies.


Using this example above, gurus will tell you that Scenario #1 is the only way that you can build a business. You need to give value upfront before having a chance to receive value.

Bullshit.

Scenario #3 is the most common scenario for a reason. How many of your local bakeries are giving away top quality samples all the time for free? They might do it once in awhile, but there's little to no chance that they're doing it everyday, and if they are, they're only giving you a taste.

This is the same reason why Groupon doesn't work for most businesses.

Or why all the Youtube gurus like @AndrewNC that make videos for free end up getting zero customers. Edit: Alright, maybe they end up getting two or three and then start calling themselves successful entrepreneurs.

It is merely a funnel/marketing tactic for you to get sales.

But to get sales: YOU NEED TO CREATE FUTURE VALUE.

You need to have a product or service that is valuable enough for people to give you money. The book Ca$hvertising puts it best: For someone to give you $20, they have to believe that the $20 they're giving you is worth less than what they're getting. If they believe they're getting $30 worth of value then they'll give you money with zero hesitation.

The only time you should be giving value for free is when you're attempting to increase the perceived value. If you know your service is worth $30, and you're selling it for $20, but no one's buying, then giving away a TASTE for free is worth it to increase the perceived value from let's say $10 to $30.

But if you're giving value away for free, expecting the customer to eventually pay, then you're mistaken.

I saved a former mentor of mine millions of dollars by optimizing his supply chain. I fell into the trap of giving value away for free, assuming that eventually he would reciprocate. You know what I ended up getting? Not sh*t - because there was zero reason to give me a dollar other than "loyalty".

I have friends that have invested years into the wrong pursuits. I've read countless posts on this forum of people betting their business around these tactics and then wondering why they failed. Time and time again I've seen this model fail.

End of the day, it's a marketing tactic. It is not the only way to operate your business, and more often than not, it does more detriment than good.

You're a freelancer?

What's better? You writing a thousand forum posts here and on Quora? Or you creating a strong landing page and cold emailing a thousand potential clients with a few clicks?

I don't know what's better. That's for you to test and decide. But if you bet you whole business on just one tactic instead of trying multiple until you get traction, then you're an idiot and deserve to fail.

To summarize: Create a valuable product or service. Employ a multitude of tactics to get traction. More likely than not, giving value away for free is bad for your business.
The way I understood is was only giving value for free the first few times in order to build a portfolio/reputation and then charging after that point.

The first sale for my first real business came out with a hefty check and returned 4.9x on the owner's investment.

The way I see the "free" movement is as Ayanle described, plus a chance to optimize your product.

It's no harm putting together a widget for free if you're still trying to figure out what's best for your customers.

At least to get to the 80% mark of completion. Then you can start charging.

Both work. My second biz is built on giving the product away for free. Now I have a huge network of referrals to the point where I haven't had to make "a sale" in the past 2 years.

On the other hand, giving away free samples in the hopes someone pays you is nonesense.

That's like the nice guy version of business. Doing chores for a girl in the hopes she sleeps with you.
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

MidwestLandlord

Legendary Contributor
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
759%
Dec 6, 2016
1,479
11,226
This business should be scaled nationwide. This man is a genius !

And he's in a rural area (town of 13,000...aren't you in a rural area of Canada?)

He has people drive 300-400 miles just to enter the contest. They'll often leave with a car they bought anyway and just tow it home.

Being in a rural area hasn't held him back.

And this "$5,000 car" he gives away? Yeah, he pays like $1,500 for them at auction. Only puts legit book value on them, so not a scam.

He has a local mechanic that does work for 20% off if the car was bought or won from this guy too, so not only is he networking (critical in rural areas IMO) but he adds that level of comfort that his cheaper cars won't leave you with big repair bills.
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
The free model allows me as a consumer to take on zero risk.

That's the model in a nutshell.

Consumers are tired of being ripped off.

If they get to "try before you buy" the company is saying, "Hey, we know our product is so good, we know once you try it, you won't want to go without it."

Reducing consumer barriers to purchase is simple behavioral economics. Aversion to risk and loss of money is a powerful impetus for people not to make a gamble on a product.
 

Dami-B

Bronze Contributor
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
251%
Jan 25, 2015
179
449
33
Lagos, Nigeria
Great thread. @AgainstAllOdds is a poster I respect and look forward to, but I have to disagree with this post.

In my experience and constant learning as a digital marketer (a world that @andyblack opened up to me through his posts), I believe that you first need to undertand the different touch points of today's customer.
There are four separate touch points

1. Buy
2. Learn
3. Expression
4. Lifestyle

You are concerned about the first stage which is buy. You want to be there when the consumer wants to purchase a product or needs something right away, you want to be the first option. Digital marketers understand this, that's why we do SEO, SEM, Facebook ads to get you there first for a keyword or conceptual ad. But that's just the first step.

Today's consumer does not want to be sold, they hate being sold and often avoid the feeling, but they love to learn, they wonder about different things, that's gen x for you, they don't know anything, but they wonder, so they want to know how to fix a tire, they check out a YouTube video, it's the age of learning, and smart brands are taking advantage of this, see Johnson and Johnson with babycenter.com, a site that teaches you all you need to know about having a baby from conception to adulthood. So organized information is free, but it's an asset they are building, a content asset that creates a community which people will connect to. The best brands position themselves as free information source, at the point where their prospective consumers are looking to learn more about their product, service and industry

But this is just the small part.

Smarter brands know that their customers want to express themselves, in the age of selfies and self broadcasting, we live in an age where people for the first time get to say what their message is for the world and their promise to the world, it's a digital world full of expression and smart brands are finding ways to.get customers to express themselves through their products and services, engagement is the new buzz word and companies are looking for smarter ways to engage their customers, to express themselves, a great example of this is the share a Coke campaign by cocacola

Last but not least is lifestyle, Tom's shoes is the perfect example with the one for one campaign, when you know that for every Tom shoe you buy, a kid goes to school in Sierra Leone, you have just connected with that companies vision, you have connected with the companies leader and you feel like a part of what they are building, my companies goal (my person goal as well) is to have a positive impact on every business I come across through my online marketing service, once my clients can connect with this vision and see themselves part of it and believe in it to the point where they follow my.plan to achieve positive impact in their business, then price doesnt matter, I'v gone beyond the sale to build something that will last.

The sale is just the first part, it's the buying stage, but there is so much you can offer your customers beyond the sale that makes them connect with you like they would never connect with anyone else.

This is my belief and why I do what I do
 
Last edited:

RazorCut

Legendary Contributor
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
358%
May 3, 2014
2,032
7,269
Marbella, Spain
To summarize: Create a valuable product or service. Employ a multitude of tactics to get traction. More likely than not, giving value away for free is bad for your business.

Yes, an important issue of the free scenario is who are you trying to attract. The type of people who descend on your free offerings might not represent the avatar you want as customers.

So then all you are doing is attracting a plague of locusts that will strip you bare then move on once there is nothing free left. Exactly related to your cookie analogy @AgainstAllOdds

I think freeloaders is a derogatory term but rightly or wrongly it fits the bill. It might be the case that the people taking your free offerings can't afford your paid products/services but wouldn't you be better off investing the time/money attracting the customers who are a fit for your avatar?

The one area where I think free does have a worthwhile use is in information and creating authority. If you can build a broad community of loyal followers you will always have a percentage who are willing to pay for more depth, more detail, more information. Take sites like this for example, many of us are more than happy to support MJ's community by paying a yearly subscription and benefiting from ring-fenced areas of the site.

Also sites like Smart Passive Income have been very successful largely because of the shear volume of valuable information that is freely available. Obviously it depends on how you are able to monetise your business. Physical products have a finite cost so if you are not careful you can get yourself into really hot water with discounted/free offers.

Talking of which (and related to Groupon and bakeries) it reminded me of this:

Groupon demand almost finishes cupcake-maker
 
Last edited:

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
445%
Jul 23, 2007
38,076
169,471
Utah
There's another side to this story that's worth reading. Newton Mail (formerly CloudMagic) - the guys created a great product... had around 4 milllion free users, and then decided to charge $49 per year. Guess how many converted to paid (myself including) 40,000. I honestly felt $49 per year was worth it, but many didn't. Their story, they closed shop this year (pls read this).

Doesn't this answer the question and verify what I'm saying? 3,960,000 ppl thought the "value" was worth ZERO. Only 40,000 thought it was worth something.

So if you're giving away something that isn't terribly perceived as valuable (meaning, they can get it elsewhere as good and at that price) then yes, FREE isn't going to work.

Once again we're dealing with companies that aren't productocracies ... they have a product problem. And companies with product problems are subject to the whims of their marketing.
 

KLaw

Gold Contributor
Speedway Pass
Aug 4, 2012
917
1,075
ohio
I never looked at giving stuff away for free as a business model. It's just a tool in your toolbox. You do it to prove you can add value and to validate your product / services. In your bakery scenario...you don't give free cookies away everyday outside your store. You give 1 free cookie away inside your store. Potential customer comes in, smells the awesome aroma as they eat the free cookie and buys more. I know I would. Or you are launching a new flavor and you want to gage (collect data) the number of folks that like it. Use that feedback to determine the value of that flavor. Again, not a biz model...just a tool.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
356%
May 2, 2017
976
3,479
35
Pennsylvania
I just want to clarify:

I'm not saying giving away samples is bad, but that the general wisdom that this is the only way to build a business is significantly flawed.

It's a marketing strategy, and for most industries and businesses, a suboptimal one.

Obviously for tech and information based businesses it works really well, but in other businesses (especially service based businesses), it's not necessarily the best road to take.
For our service business, it's awful.
I would gladly give away the first month of accounting services for free - it lowers the risk and commitment for new clients.

The problem is, most of the work is upfront. I usually need to clean up the financials to even begin doing their accounting. One month of financials means nothing if their starting point is crap. There is a lot of time I eat up front, that only gets made up if they stay on as clients. So for our business, you are correct, giving away our actual service for free doesn't work for us.

However, I can give away content for free all day long (my only cost is my time). It establishes me as an expert, and then when people are looking for our services, we are hopefully top of mind.
That being said, if I actually calculated the amount we "earn per hour" for creating content, it's probably less than minimum wage at this point, hence why we're exploring other avenues of traffic.
 

biophase

Legendary Contributor
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
474%
Jul 25, 2007
9,120
43,260
Scottsdale, AZ
Scenario 2) I'd like A-list celebrities to tweet, IG my product. But celebs get inundated with free samples and requests all the time. So I try to find if any support non-profits, and find say 10 that do. I help these non-profits any way possible. I try to become an official sponsor of them. Not expecting anything in return, but at least giving myself a .1% chance of a celeb noticing me. If they decide to tweet etc... it will be their decision to help, not my asking.

@biophase Gonna have to call you out on your #2 scenario.
You absolutely hope (expect) something in return. Why are you targeting their nonprofits otherwise? Nothing wrong with that. But, you wouldn't pick those specific nonprofits if you weren't hoping to catch their eye and get some of their ig attention. Call a spade a spade.

Since you don't know the business I'm in, I understand your reply. However, the answer is yes, I would and have picked them any way. In fact, the ones I mention in scenario 2 consist of 5 out of the 2000 nonprofits that I've donated over $1.5 million worth to this year.

There's a reason I get offers from owners of non-profits. It's not because I send in one donation, but I consistently send in donations every week. :)
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.
Last edited:

eliquid

( Jason Brown )
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
519%
May 29, 2013
1,876
9,731
There is a lot going on in this post with @AgainstAllOdds that can be broken down.

Things that can be expanded on, things that can be broken down, etc.

I see both @MJ DeMarco and @AgainstAllOdds being right, but it's how you frame the light hitting it and under what circumstances that makes either one right.

Depending on where the entrepreneur is on their journey, makes all the difference in this topic.

I'm going to throw my 2 cents in later once I can break it down.

.
 
Last edited:

Jeff Noel

Go all in.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
219%
Oct 26, 2018
699
1,534
Quebec, Canada
Another good example of this is Sees Candy. No one who walks in there for a free sample leaves without purchased goods.

Reminds me of a high quality chocolate factory that opened here. They have a small shop and there was a long queue of people waiting to get in, in the cold. The boss took a basket and filled it with chocolate chunks. He started going through the long queue, in the cold, wearing nothing but his tuxedo outfit while greeting everyone and talking about his different chocolate types. He probably won 50 recurring customers just by doing that... and got over 500 people visiting the shop that day because of word of mouth from satisfied customers.

That same person has around a dozen of shops now. Free samples at the entrance for everyone.
 

eliquid

( Jason Brown )
EPIC CONTRIBUTOR
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
User Power
Value/Post Ratio
519%
May 29, 2013
1,876
9,731
I was going to break this down, paragraph by paragraph and decided not to.

I found what seems like some resentment or anger in your post so I didn't want to share anything that might stir the pot for you.

However, just always know that no matter the tactic, example, or scenario.. there will always be someone that will defy the rules and norms and take advantage of you and that is outside standard protocol for any setup.

.
 

AgainstAllOdds

Legendary Contributor
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
647%
Dec 26, 2014
2,274
14,724
32
Chicago, IL
Doesn't this answer the question and verify what I'm saying? 3,960,000 ppl thought the "value" was worth ZERO. Only 40,000 thought it was worth something.

So if you're giving away something that isn't terribly perceived as valuable (meaning, they can get it elsewhere as good and at that price) then yes, FREE isn't going to work.

Once again we're dealing with companies that aren't productocracies ... they have a product problem. And companies with product problems are subject to the whims of their marketing.

One of the problems I want to point out is that the freemium model for Newton Mail created significant opportunity cost for the founders.

You have smart founders that could have built anything else with their time.

By going with the freemium model, they delayed the eventual receipt of feedback ("hey, your product will never make you money because you can't sell it at a price that will cover costs and leave you with a profit").

They went in this direction:

  • Free --> Freemium --> Dead.

If they tried to charge right away they could've went in one of these potential directions:
  • "Premium" --> Dead.
  • "Premium" --> Freemium --> Dead
  • "Premium" --> Profit
  • "Premium" --> Freemium --> Profit
In this scenario, charging right away would have been a lot more efficient for the founder's net worth.

There's nothing worse than having 4 million people tell you you're awesome, and then waste years on building something that none of them would pay you for at an economically viable price point.
 

Jeff Noel

Go all in.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
219%
Oct 26, 2018
699
1,534
Quebec, Canada
There's a used car lot in my area that gives away a free $5000-ish car every 2 weeks. His facebook posts get 4,000 or so likes every time, and 100+ shares.

I know him, and he sells more cars than he can keep up with. Has put at least half of the other used car lots out of business. He's very niched (sub $6,000 cars and cash only), and plays big on the "free bucket of chicken" mentality.

To enter the contest all you have to do is fill out a form with your name, telephone, and the criteria of what kind of car you are looking for, plus friend him on Facebook. Then magically, when you don't win, he finds a car that fits your criteria and calls you...
This business should be scaled nationwide. This man is a genius !
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

ZF Lee

Legendary Contributor
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
180%
Jul 27, 2016
2,840
5,113
25
Malaysia
@Andy Black - I'd love to hear what you think. Maybe my thought process is wrong.
What do you mean? This post is soooooo late.:playful:
Great thread.

I think it boils down to whether you can fund 'giving free stuff' and how much working capital you can 'lose' before you start killing yourself. Numbers.

Giving food samples, such as chips, is fine. You can buy small quantities of the food, break them up into smaller bits to have them go around for more folks. But for tangible tools, such as the Paintbrush Cover, its a bigger pain to hook people in by giving it free.

But I think a price reduction strategy would work better. At least you get a little money, and you still potentially rope in folks looking for a deal.


Yes, because the product being offered is bullshit more often than not.
I was reading a funny tale from The Automatic Customer by John Warillow the other day.

When the Internet popped up, folks started beating on media companies like the NYT to give them free info. No more paywall! After all, we have the right to free info! The dawn of a new era!

Bloggers left and right became free news sources, so folks started going to them, leaving established news outlets in the dust. Or did they?

Pretty soon, everyone started finding that free info was crap info. Horrible writing and misleading facts. We see that sometimes on social media today. Paid info and news actually ensured that reporters and editors could be paid, data can be verified and more quality interviews can be arranged.

So yes, you get what you pay for. Pay $0, and get 0 value (or negative, in some cases)
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Andy Black

Help people. Get paid. Help more people.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Fastlane!
Speedway Pass
User Power
Value/Post Ratio
370%
May 20, 2014
18,563
68,687
Ireland

KLaw

Gold Contributor
Speedway Pass
Aug 4, 2012
917
1,075
ohio
Here is where im coming from...im a small biz owner. Come at me with "I'll build you a website, seo, blah, blah, blah"
I'll need 5 grand upfront. F*ck you. F*ck off. vs.
Build the website for free. Let me see the results of that. Guess what? I'm a loyal customer to you for life.
 

Jeff Noel

Go all in.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
219%
Oct 26, 2018
699
1,534
Quebec, Canada
I think this heavily depends on the industry you're in.

A while ago I bought a "premium" version of an audiobook player on my phone because the free version was great and they didn't lock necessary features behind a paywall.

Same thing with the course @Andy Black made that I wrote in his thread.

If he gave so much free value, how good is the stuff he's charging for? Only one way to find out.

I completely agree. Some kinds of business will definitely benefit more from giving value. I'm especially thinking of markets flooded with offers that cannot really distinguish themselves to the eyes of the customers. Free cellphones apps are pretty much the only way to get your developer firm and paid application known... it's pretty much a sales funnel by itself. If the free app is great, people who can afford it will eventually purchase the paid one if they like it. And your name will now be out there.

This is a different kind of "give value" since the free apps usually contain ads or premium currency, but the main content is still available, free of charge, to the users.

Andy is a great example. I didn't know him 3 days ago. Here I am first thing in the morning, doing AdWords search terms and keywords planning, thanks to him. His paid content must not only be gold, it must be platinum with sparkles !
 
Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

Jeff Noel

Go all in.
Read Fastlane!
Read Unscripted!
Speedway Pass
User Power
Value/Post Ratio
219%
Oct 26, 2018
699
1,534
Quebec, Canada
Netflix offers a free month of service for new customers in exchange million of people
become paid customers

It is a great, concrete example. For platforms and SaaS solutions online (pretty much any service which is cloud-based), using this method is the best way for them to make people addicted to their product.

I'm a heavy Spotify user, and I recently tried its competitor, as an audiophile. That other business is offering higher quality audio streams and lossless format audio... as a streaming service, I was skeptic about it, I wasn't expecting to need better than what Spotify offers, but the 14 days trial got me hooked (especially for holiday, classical music).

They won my money with their free trial. I'm even considering to drop Spotify for the more expensive service in exchange for sound quality, while losing the bigger library Spotify offers !

Great point.
How much time do you require to spend on a regular basis to give value away?
It's definitely something to take into account. Writing a blog article or a few ebooks that you give away for free requires no future time spend or maintenance fees that could show up in a different business. I've never seen a car company giving away free cars every week.
 

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Top