I had an interesting conversation on Saturday with Bruce Spector, the founder and CEO of a new web service called LifeIO. (See the end of this article for an explanation of what LifeIO is all about.) Bruce was part of the team that developed WebCal, which Yahoo! acquired in 1998 to form the core of its own calendar service, so he has been watching the web with an entrepreneur’s eye for some time now and he had an interesting take on the whole “free” debate and how it might apply to book publishing.
If you somehow missed the recent back-and-forth about Chris Anderson’s book Free, read the pro-“free” comments by Anderson, Seth Godin and especially Fred Wilson, and the anti-“free” perspective by Malcolm Gladwell and Mark Cuban, among many others. This piece by Kevin Kelly, not directly about “free,” is very good, too.
For the uninitiated, the issue boils down to this: The marginal cost of delivering a bit of information over the web — a song, a video, a bit of text like this one — is approaching zero. As a result, information is increasingly available, and consumers increasingly expect to get it, for free. So traditional “legacy” information-sellers like musicians or movie studios or newspapers, whose actual costs are very far from zero, have to figure out how to turn free-riders into paying customers — and fast, before they go out of business. Fred Wilson’s answer is “freemium“: you lure the customer in with a free basic service, then up-sell the heaviest users to a premium version of your product. As Wilson puts it, “Free gets you to a place where you can ask to get paid. But if you don’t start with free on the Internet, most companies will never get paid.”
How does all this apply to book publishing?
Here are some of Bruce Spector’s ideas. He is a great talker, though, and a summary like this doesn’t do him justice. Also, this was a private conversation, but Bruce kindly gave me permission to repeat some of his comments here.