Retail Only Matters if You Have Reach and People are Buying...
Some people make software convinced that they are giving away and losing money if they let anyone try out their software. But the retail price only matters if people see it and think it is worth spending money on. The shadier your software is the more of a viral buzz you need to make the marketing work.
A guy contacted me wanting me to promote his blog spam software for free. When I suggested advertising on Threadwatch and giving the software out to members for a day or a week he trumped up the value of his software, which makes me wonder why he had to ask me for free viral marketing if his software was actually worth $197 and already selling well.
If your software / information product / etc. has little to no incremental cost per user and is brand new you are not losing money giving it away in exchange for market exposure. Two years ago I gave away the first version of SEO Book. The first version really was not all that good, but I realized that feedback had value and I should spread it far and wide to get whatever feedback I could get.
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It seems like even back in the day when Google started ,that old skool heads like Warren Buffet were scratching their heads and saying "how do you allow these people to use this beautiful search engine free? How are you going to make money"
They finally monetised their userbase by pay-per-click and other advertising admittedly they ripped of www.goto.com later renamed Overture by Yahoo and had to pay them off. But the point is they had a huge number of users hooked on their software and were able to monetise them.
Skype has done the same and if you look at the successes recently in Flickr,Picasa and Delicious they all gave it away free.This seems to be the lesson for you young coders to learn.
Why even Napster was free and although Shaun Fanning probably didn't realise at the time of the enormity of what he had created he is probably
not living on beans on toast or peanut butter sandwiches;)
I just got done giving a client over an hour's worth of advice on how to bump up their search engine rankings without having to pay me. Why am I giving out advice for free? Because I know that many of my clients/potential clients will come to the point where they realize it's easier and cheaper to pay my firm to do the work than it is for them to take their time to learn everything and do it on their own. By giving it away, I cement in their minds that I know what I'm talking about. It builds credibility. I actually posted something on my own blog about this just a few weeks ago. http://www.donloper.com/business_and_entrepreneurship/give_it_away_now.html
This all assumes you have sophisticated security measures in place, that prevent pirating.
Should you give away free trials/demos, they can become very easy to exploit.
>This all assumes you have sophisticated security measures in place, that prevent pirating.
The people who pirate work...are they potential customers? Were they really going to buy? Or would they be really bad customers?
>Should you give away free trials/demos, they can become very easy to exploit.
And those looking for ways to exploit them would also look for ways to exploit anything. Maybe giving them an alternative way to get access to inferior versions of your products prevents you from having to deal with them directly.
When I first writing software I gave it away free, I did this for about 2 years and it was one of the best business decisions I made. Like you said with your ebook Aaron, the feedback was invaluable, and there's nothing like a genuine freebie to naturally gain quality inbound links.
Trying to convince a client to give something away though is like banging your head against a wall. One of my clients recently had a bunch of books printed, and there was some spare capacity on the print run so he got some minature versions of the book made with this spare. It cost him nothing, yet he refuses to see the value in using these as a marketing tool by giving them away free!
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