What would Google do? Charge nothing. Make it up in volume. Literally.
An outdated business joke has become an economic reality:
First Salesman: “We lose money on every sale.“
Second Salesman: “How do you do it without going out of business?”
First Salesman: “We make it up in volume.”
In an economy fueled by social networks, data and technology, companies that want to thrive need to replace questions like ‘HOW MUCH can we make from each transaction?’ with questions like ‘HOW LITTLE can we charge and still get by?’
According to Jeff Jarvis, author of What Would Google Do?, businesses that rely on the formerly-reliable ‘law of supply & demand’ to guide financial strategies are likely to fail in today’s economy. Why? Scarcity doesn’t ensure value. IF ANYTHING, it attracts a wide field of competitors striving to underprice you and deliver your once-scare commodity faster.
“Scarcity was about control: those who controlled a scare resource could set the price for it. Not anymore”Jarvis said. “Google has found a business model based on creating , exploiting and managing abundance. The more content there is for it to organize, and the more places there are for it to place ads, the better.”
Jarvis invites business owners to join the open-source, gift economy — where companies forgo traditional marketing strategies and partner with (and listen to) customers in order to create reasonably-priced products, with continual product improvements driven by customer suggestions. Customers can help design products. Constituents can help write legislation. If you put your product roadmap in the hands of its customers, the result will be innovation.
Guidelines for the new economy, according to Jarvis? Listen. Trust the people. Make mistakes well. Be honest. Be transparent. Collaborate. Don’t be evil. And, begin everything as a beta. This approach popularized by Google means releasing products early with basic functionality and using customer reactions to determine added features and functionality.
Commodification happens. It’s the new norm. Companies that use this trend to their advantage (rather than fighting it) will prosper: “Google has turned commodification into a business strategy,” he said. “Content is commodified… Media is commodified… The audience is commodified… Advertisers are commodified… Serve a niche well rather than the mass badly.”
Beyond the book
Jarvis’ Twitter stream (@jeffjarvis) is active, personal and academic. He Tweets dozens of messages a day. Although Jarvis has more than 16,000 followers on Twitter, I’m not one of them. Why? I enjoy his blog much, much more.
I’m not sure whether I’d consider Jarvis’ blog, www.buzzmachine.com, an extension of his book — or the reverse. Both are evolutions of the same conversation. The same fact finding. The same curiosity and passion. This is intentional. Jarvis includes an open invitation to readers to continue explorations with him:
“You no doubt have seen rules of the Google age that I have missed. You have corrections to make, facts to add, experiences to share and opportunities to explore. I hope you will come onto my blog…to continue the conversation.”
But, continue it does. Jarvis’ blog contains nearly five years of archived sentiment.
The right stuff? Or, no stuff at all
Does your company have the right stuff? One of the principles of Google’s success is to provide a platform and environment for people. They have the ability without selling physical products, aka “stuff”. WWGD says having no stuff is better than having a lot of stuff. George Carlin agrees.