Tom Sawyer, IT and the 'free' world

Many of us thought that the great chasm that divided us into free and not free ceased to be a model of the world orderabout the time that the Berlin Wall fell. Politically, that's true, but a similar chasm is developing today in the worlds of business and IT. In fact, any IT professional who is not thinking in terms of free vs. not free is behind the times. You need to polish your strategy lens and recalibrate your business model. You need to get busy giving stuff away and getting it for free.

Companies -- and their IT shops -- that are in tune with the times embrace the idea of "free"; those that don't are proto-Victorians clinging to notions of proprietary technology and information. That's the kind of statement that can make the bean counters among you go into shock, but you have to realize that free is a two-way street. Organizations that choose to live in the free world don't just give things away. They also get things for free -- from customers, suppliers and the government. Companies that succeed in the free world gain a deep and broad understanding of the entire value chain, including the value preferences of customers, suppliers and society.

Capitalism requires multiple viewpoints operating simultaneously. Every stock trade depends on someone saying, "Time to sell," and a connected party concluding, "Time to buy." It's long been so, but today's capitalists are finally figuring out how to match the inventiveness of that great entrepreneur of 19th century literature, young Tom Sawyer. The hero of Mark Twain's novel The Adventures of Tom Sawyer was able to persuade his pals not only to do his work for him, but to pay him for the privilege of painting a fence. Thus, we have the victors of the Web 1.0 wars -- Amazon.-com, eBay, Google -- all differentiating themselves from the competition in their ability to get customers to paint a part of their fences. FedEx does the same thing for data entry, and Burger King and McDonald's have turned all of us into soda jerks and busboys.

These companies are not just trying to rein in costs by harnessing customers to the yoke of their business proc­esses. There are strategic implications as well. Strategy used to be all about finding rich customers. But if Clayton Christensen (author of The Innovator's Dilemma and The Innovator's Solution) and Chris Anderson (author of The Long Tail) are to be believed, the real money today is to be collected not from the heavily contested high end of the marketplace but from the much less contested and all-too-often forgotten low end. As Christensen has said, today's low end is tomorrow's mainstream.

You are going to have to go one better than Alfred Sloan. In 1924, when he was president of General Motors, Sloan developed the brilliant formulation of "a car for every purse and purpose." The result was the concept of model lines -- Chevys for the less affluent and the upwardly mobile young, who would prosper and then move up through Buicks and Oldsmobiles and perhaps finally make it to the "Top of the world, Ma!" Cadillac. The lesson: You are going to have to reach out and connect with people who have no money at all.

There's a wonderful expression: "There is no such thing as bad weather; there is just inappropriate clothing." In the emerging free world, there is no such thing as a bad customer; there is just inappropriate pricing, service levels, business models and cost structures.

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