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I followed a debate over Bambuser about School 2.0 at Almedalen (a camp/convention for Swedish politics). Using Bambuser was a nice touch to such a debate and the online viewers were at the start included but later on forgotten but we had our own good chat in our channel.  The debate was of varying quality but made me think about some of the things they talked about. The main thing they seemed to want to change in school 2.0 was a use of social media but unfortunately they missed the debate over what it would be used for. This miss is something I've noticed a lot lately, much discussio...
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Found a great manifesto expressing how I feel towards the internet. The internet is made of people. People matter. This includes you. Stop trying to sell everything about yourself to everyone. Don’t just hammer away and repeat and talk at people—talk TO people. It’s organic. Make stuff for the internet that matters to you, even if it seems stupid. Do it because it’s good and feels important. Put up more cat pictures. Make more songs. Show your doodles. Give things away and take things that are free. Look at what other people are doing, not to compete, imitate, or compare . . . but...
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With the emergence of new social media the gap between people seem to shrink. We share more and more about ourselves with each other over the internet and gossip has in many cases moved online. Keeping our social networks online allows us to keep track and in touch with more than the theoretical cognitive limit that we can have according to Dunbar's number (even if we may not have a 'stable social relationship' with most of them). Another interesting aspect of when clusters of people in this size form is the effect it may have on a social scale. One example of a group's altered properties c...
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Social Media is relatively new for most people and many are still exploring the possibilities and uses of it. One of the things that happen with social media is that we become more transparent, we share more of our self to more people then we normally do. This transparency is good in some ways and less good in some. There's been several stories of sharing too much information on social media. One example is the case where a British women forgot she had befriended her boss on Facebook. Another example is the recent case of a Swedish guy who published a picture of himself where he wore...
Jan

11

The problem today is that industries still work under the old traditional economic idea of ‘choice under scarcity‘. When there is a limited amount it gets expensive. We have to choose where to spend our resources (money).

The part that has changed, compared to earlier, is that information no longer is limited in this digital age. We have an abundance of information. Now we have to choose where to spend our resources (attention). One of the ways of reaching peoples attention is using Word of Mouth (WOM), a specific message that is accessible and spread by users.

The cost of copying digital information is reaching zero and we are moving towards externalities and alternative economies. New technology’s deflationary force is nothing new but the speed at which this is happening causes a problem for companies trying to adjust to this new economy.  Unfortunately this fast shift has made a lot of companies try and keep the obsolete economy of ‘choice under scarcity’ by limiting the access to information and thereby causing a shortage. This limiting has mainly been done by lobbying and creating laws to protect their outdated business strategies. We are moving away from traditional economies and towards an attention economy despite the friction caused by some companies.

This new economy benefits from Word of Mouth spreading. Compared to spam the reaching out of information by WOM becomes personal and thereby receives attention. The value is increased by sharing the product and a big mass normally amplifies the effect and usability of the product.

Free is the future of business. A few examples of this employed as business strategies could be giving away free razors (to sell disposable blades), free cell-phones (with a monthly plan), free programs (with an upgrade option) to name a few.

———————–

Business models of the ‘free’ economy:

  • Freemium
    Giving away basic model for free. People paying for premium normally pays for other 99% of people
  • Advertising
    Free in exchange for some of your attention
  • Cross-Subsidies
    Free product that will get you to buy other products
  • Zero Marginal Cost
    No appreciable cost to anyone
  • Labor Exchange
    Free in exchange for work. E.g. answer questions
  • Gift Economy
    Free for everyone, money not only motivator.

sources:
Free! Why $0.00 is the future of business
The importance of viral marketing

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  1. [...] post #3 Why Choice Under Scarcity is Replaced by Free as the Future of Business Possibly related posts: (automatically generated)Got my real blog upBack to schoolThis New [...]

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