Free

People say they’ll pay nothing, but in reality they pay, almost always with cash.

As Humaginarium develops a pitch to investors, a pre-money valuation, a robust business model, a commercialization plan, even our first working prototype, we’re struggling to answer the thorniest question: What should we charge?

It’s about more than dollars & cents price. It’s also about intrinsic worth, comparable value, fit with lifestyle, emotional appeal, unique affordances, and practical utility. These facets turn price into kaleidoscopic chimeras: none is fixed, each part depends on the others for reckoning, and all lead to the frightening concept of “free.”

Free of charge is frightening because we can’t make Humaginarium for free. If we give it away, we’ll need other ways to pay for it. The obvious way in the digital “freeconomy” is advertising. That’s of little use to a startup because advertisers require a mass audience that takes years to grow; and because advertising tends to undermine the credibility of mission.

Let’s not forget that our products develop insight and skills related to health. Can they do that honestly if we’re hawking snake oil in the margins? That’s what I asked when I learned the business model of Outcome Health, Chicago’s first unicorn. Don’t get me started.

Ask anybody what they would pay for Humaginarium and the answer will likely be “nothing.” Even if they like it, appreciate its benefits, recommend it to others, want to play it endlessly, they’ll still say they want it for free. Accordingly we should charge customers nothing and make money in other ways, like selling user data or product placements.

Yet there’s another view of economic reality. Consider:

  • Humaginarium makes entertainment. Consumers pay for entertainment. Try streaming from Netflix for free and see what happens.
  • Humaginarium makes education. Consumers pay for learning. Try enrolling in the School of the Art Institute of Chicago for free and see what happens.
  • Humaginarium makes therapy. Consumers pay for counseling. Try joining LA Fitness or Weight Watchers for free and see what happens.

Here lies the conundrum. People say they’ll pay nothing for things they need and enjoy, but in reality they pay, almost always with cash. When they don’t pay they wind up with sketchy customer experience. Facebook shows how that business model works.

Humaginarium is not sure how our thorny question will be answered. We’re working on it. The final answer may lie less in what we charge, and more in how we deliver.

Author: Robert S. Becker, Phd

Founder and CEO of Humaginarium LLC

2 thoughts on “Free”

  1. That makes sense. I hope it works. Also I signed up for the blog with an old email address to up your subscriber count. Have you shared the link on your LinkedIn?

    Like

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