Hi, I’m Sam

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Does Free Diminish Value?

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Lately I've been thinking a lot about this question: Does free diminish value? A recent Microsoft commercial about the new Surface something or rather mentioned they'd give you the best smartphone for free if you bought a Surface. Obviously it's some Microsoft phone and they are touting the camera.

To me, I immediately dismiss the possibility of it being the best phone. If that is really the case, there is no way they could give it away for free. At least that's my line of thinking. If this is truly the best, it must be using some cutting edge technology and that junk isn't cheap.

What about Mavericks?

Someone twitter had a good point:

I am using Mavericks. Apple's new operating system that is completely free if you own a Mac. Apple claims it's the best operating system, but it's free. Windows costs quite a lot.

While trying to be as unbiased as possible, I thought about this a lot. At first OS X did cost money. It was reasonable, but still it wasn't free. We've used it for years and understand how great it is. You also can't get it without paying hundreds or thousands of dollars for an Apple computer.

So maybe since it has an already established value and requires other purchases to use it, Mavericks being free doesn't diminish its value. I don't really think that's the case though. It does have less value now. If there are things that are broken people can say "Well I guess since it's free Apple won't fix this."

Different Cognitive Mode

Things that cost have a contract with the consumer. If I pay for something, I have a higher sense of respect for the product and expect it to be better since I am paying for it. As a producer, if someone pays me, I need to take that seriously and produce a higher quality product.

Recently, I encouraged a friend to charge for his service. It's a premium service that is currently invite only and is free. My thinking was if you're not trying to get everyone on earth to sign up (which they aren't to keep the quality of interactions high) then there is value in charging. Obviously charging for things will decrease the number of people that use it, but these people will be better customers.

My point was he should charge something like $5 or $12 one time. Not to make money off of those users, but to enter into this contract of users expecting quality and them being obligated to provide it. It also solves the problem of a more curated segment of users.