Freetards ruining the web?
photo by: Kirk Tanner
Hank Williams over at Silicon Alley Insider has a guest post up about how VCs are ruining the online tech economy by fueling free services, wrecking it for small and/or premium services. Matthew Ingram has a response out that resonates much more closely with how I feel.
First of all, SmugMug is living proof that you can make it as a premium service. Second, I think you’d be hard pressed to name a market where there isn’t stratification. Cars, airlines, music players, shoes – you name it, there are premium brands and there are commodity brands. On the web, commodity = free. That’s just how the game is played.
There are a lot of reasons why it makes sense for us not to be free, but perhaps my favorite is: We’re forced to hone our business. If we do don’t do it right, we don’t eat. Doing it right becomes priority #1 rather than growth.
There are quite a few reasons I love that there are *lots* of free sites with deep pockets in our space, too:
- Free training. Lots of our customers go chew up customer service dollars somewhere else first, learning the basics of how to upload, share, etc, before coming to us. By the time they get to us, they know the ropes and getting up to speed is easy.
- They’ve seen how bad it is elsewhere. By comparison, our product looks amazing. The ‘Wow factor’ is huge.
- Coattails marketing. We don’t have to spend a lot of money raising awareness of the photo sharing concept – other, bigger companies are doing it for us.
- Keeps us on our toes. As if our customers weren’t enough to keep us nimble, big deep-pocketed competitors surround us on all sides. Try slowing down and we die.
There is one big nasty downside, though, that really gets me. Every time a free site dies (and they’re dropping like flies), some of those burned customers get gunshy. Sure, we pick up lots of refugees, but there are some people who just get turned off by all photo sharing sites. They lost their priceless photos, afterall. That sucks. 😦
With the market downturn, that last point really scares me. If we really do have another bubble burst in the web space (and I predict we will), free photo sharing sites are going to be devastated.
I just hope they don’t burn an entire generation.
UPDATE: I found our problem! We don’t have a FreeTardis! I’m gonna get one.