One thing that business principles revolve around is the basic idea of providing value. All businesses revolve around the exchange of value.
Cost then, is merely the determination of value. If I price something at fifty dollars, that means that I am determining that the value of my product is worth the value of fifty dollars. In fact, by selling something for fifty dollars, that means that the value of fifty dollars is more valuable to me than the value of my product to me.
However, as Seth Godin comments, the internet age is now throwing a curveball into the game.
“In a competitive, undifferentiated market, the price will generally be lowered by competitors until it is just above marginal cost. Think about that… If it costs a dollar to make something, and your competitor is selling for $1.10, then in an efficient market, you have every incentive to sell your item for a penny less than that. It’s better than not selling it.
There are many implications of this, the first being the explanation of why so much stuff online is free. Free is a magical concept, the place where trial and virality live. If the marginal cost of a new user is virtually zero (and in an ad supported business, a new user is actually profitable, not a cost) then it’s no surprise that it’s hard to charge for your app when there are other apps that do precisely what yours does.
Big, established companies have traditionally had a difficult time understanding this concept. The market for ebooks, for example, ended up in Federal court because otherwise smart people in book publishing couldn’t get their arms around the idea that their marginal cost of an ebook delivered by Amazon was precisely zero. No paper, no shipping, no ink.” – Seth Godin
The reason that Facebook is able to offer a social network for free is because there is nearly no marginal cost for adding another user, and by adding another user, they have a larger collection of users that they can leverage for advertisements, publicity, etc.
As a new experiment on diplateevo, I have decided to give away one free book every month through a random drawing. It is called polyglot, and you can check it out here. I am doing this for a number of reasons.
- I want to provide a resource for people to learn more. By providing a free book, hopefully someone will be able to benefit from the wisdom written in the book. This will hopefully also be a way for my readers to expand their knowledge of what people are currently publishing.
- I want to experiment with the idea of giving away free books and see how people respond. I am interested to see what kind of community I can build by giving away free books, and have a better feel for what people need.
- I want to see how knowledge gets passed around. As part of the polyglot program, books that have been given out for free are encouraged to be continually given away and passed around for free. I am interested to see where my books will end up.
So go ahead and let all your friends and family know, and I will be picking the first winner next Wednesday!
Connection today is more powerful than it has ever been before.
On a daily basis, thousands of tweets fill my stream, hundreds of posts fill my feed, countless emails fill my inbox, new TED talks are uploaded, and all my favorite blogs have new updates. While the access to and amount of information is incredible, it’s nearly impossible to keep up with it all.
But the reality is that you don’t have to be up to date with everything that is happening in order to make a dent in the world. Being well informed has little correlation with the impact they have.
It’s tempting to want to follow every single blog and news source in the world to see what other people are up to. It feels good to know what has been done and what has not. But the truth is, it’s easier to listen to something than it is to do something.
The effectiveness of the content that is consumed depends not only on the content itself, but the space and context that it is consumed. Reading a news article without actually doing anything about it makes the news merely informative entertainment.
In designer’s terms, negative space refers to the space around and between the subject of an image or design element. It’s often the white or blank space that subtly adds meaning and significance to the positive space, or the subjects in focus.
When it comes to acquiring new information, the negative space between information that you consume matters just as much as the information you consume. The negative space is what allows you to process and synthesize your own thoughts about the content you are taking in.
There’s nothing wrong with reading every single business book in the world. There’s nothing wrong with keeping yourself updated with every blog post someone puts out. But there comes a point where you can no longer be merely a consumer.
Take time after reading an article or book and ask yourself what it actually means to you. Let the new ideas spin gears in your head and inspire you to actually do something. It helps to regularly block out input from information sources, and organize your own thoughts in the negative space.
It’s only been a couple of weeks since I read this book, but many of the principles are becoming pretty evident.
Learning how to make and break habits is a very powerful thing. Habits emerge because the brain is constantly looking for ways to save effort.
Habits are made up of a three step loop, the cue, the routine, and the reward.
The cue is what prompts the routine. Generally, cues are divided into five different categories: location, time, emotional state, other people, or an immediately preceding action. The routine then, is the set of actions that a person executes as a response to the cue. And finally, the reward is the feeling or result of performing the routine.
Understanding how to take control of the habit loop is they way to build new habits or change existing ones. Reading this book made me even more aware of habits I never thought of. Toothbrushing only became a regular practice when the minty, refreshing flavor was introduced, leveraging the reward of brushing your teeth. Many little habits form a person’s behavior, whether they realize it or not.
Reading this book made me realize how passion alone is not enough. While structure is something that can become dry or ineffective without passion, the most effective people use passion in order to intentionally create structure in the form of habits in order to achieve their passion. And when the habit is formed, people can use those habits to their advantage without even thinking about it.