The Power of Free - For Entrepreneurs: Good and Bad Procrastination

The Power of Free - For Entrepreneurs: Good and Bad Procrastination

In the world of entrepreneurship, there are many strategies and techniques that can be used to acquire customers and achieve success. One of the most powerful techniques available is giving away a free product or service. This strategy, known as the "Free" or "Freemium" business model, has been proven to be highly effective in acquiring customers at a low cost.

The key to successfully implementing the Free strategy is to ensure that the product or service being given away for free is of very high value to the customer. This not only leads to high customer satisfaction but also increases the likelihood of them telling others about your product or service, resulting in viral effects. Unfortunately, many entrepreneurs and executives fall into the trap of taking out valuable features that would make the product interesting and valuable, stopping short of providing true value to the customer.

However, the smart crowd of entrepreneurs and executives understand the power of offering a free product or service. They realize that in a typical business, the biggest expense is sales and marketing. By offering a free product or service, they can acquire customers at a low cost and then monetize them in a different way. This strategy allows them to shift the expense of customer acquisition to the product development group, ultimately leading to a larger customer base and market share.

A prime example of the power of the Free strategy can be seen in the high-priced acquisition of SpringSource by VMWare. Although VMWare may have overpaid for SpringSource based on revenue multiples, the real value of SpringSource lay in their large base of developers inside enterprises who were strongly committed to the Spring free Open Source framework. This market leadership and large customer base made SpringSource an attractive acquisition target, highlighting the importance of market share and footprint.

On the other hand, there are entrepreneurs and executives who fall into the "wrong" camp. They are so focused on extracting the maximum dollar out of every customer that they fail to realize the slow and expensive customer acquisition that comes with it. Their focus on immediate monetary gain leads to a small footprint or market share, limiting their long-term success.

In addition to the power of Free, there is another concept that plays a significant role in the world of entrepreneurship: procrastination. Surprisingly, some of the most impressive people are terrible procrastinators. However, there are different types of procrastination, and not all of them are bad.

The three variants of procrastination are: doing nothing, working on something less important, or working on something more important. The last type, which involves working on something more important, can actually be considered good procrastination. This type of procrastination involves putting off small tasks or errands to focus on big, important projects.

Startups, in their early stages, are often the most productive because there are no interruptions. The founders can fully focus on the big problems and work on the most important things. This highlights the importance of prioritizing and working on the biggest problems in your field. If you're not working on the most important things, you're simply procrastinating, regardless of how much you're getting done.

The fear of wasting time and the lack of immediate rewards often prevent people from working on big projects. However, big problems cannot be tackled directly. They need to be approached obliquely, finding the right angle to face them. This means working on small things that have the potential to grow into big things or collaborating with others to share the moral load.

To overcome procrastination and work on big things, it's important to let delight pull you instead of relying on a to-do list to push you. Find an ambitious project that you truly enjoy and sail as close to the wind as you can. By doing so, you'll leave the right things undone and achieve greater success.

In conclusion, the power of Free and the concept of good procrastination can both play significant roles in the success of entrepreneurs. By offering a free product or service of high value, entrepreneurs can acquire customers at a low cost and build a larger customer base. Additionally, by prioritizing and working on big, important projects, entrepreneurs can make significant strides towards success.

Actionable Advice:

1. Consider implementing a Free or Freemium business model to acquire customers at a low cost. Ensure that the product or service being given away for free is of high value to the customer.
2. Prioritize the most important problems in your field and focus on working on them. Avoid getting caught up in small, insignificant tasks that won't make a significant impact.
3. Embrace good procrastination by putting off small tasks or errands to work on big, important projects. Trick yourself into tackling big problems by starting with smaller tasks that have the potential to grow into something significant.