Product Overview
Its the ultimate business question ofour time: How do real companiesmake money when customers expect(and often get) products for free?
There are millions of potential customers in theworld. Most of them wont pay anything for yourproduct. But some will pay almost anything. The
challenge is to find the latter without wasting timeand money on the former.
In The Curve, Nicholas Lovell weaves togetherstories from disparate industries to show how smartcompanies are solving this puzzle. From video gamesto pop music to model trains, the Internet helps businessesforge direct relationships with a vast globalaudience by building communities and offeringbespoke products and experiences.
In many cases, businesses can win by sharingtheir product (or a version of their product) for free,allowing it to spread as widely as possible. Eventually,a huge number of freeloaders spread the word tothe superfans who value that product the most. Anda small number of superfans will love a product somuch that they will spend substantial sums of moneyon itgiven the chance. These high-value customersare enough to fuel a profitable business. For example:
- Nine Inch Nails front man Trent Reznor gave awayhis album for free to find the 2,500 hardcore fanswho wanted the $300 limited ultradeluxe edition.
- Bigpoint, an independent game developer, releasedthree adventure games to 130 million usersandmade 80 percent of its $80 million revenue fromjust 23,000 users, who spent money to upgrade theirgame-playing arsenal.
- King Arthur Flour shares useful recipes and tipson its Web site, enchanting a cult of devoted bakers,many of whom happily travel to its Vermont headquartersfor expensive specialty baking classes.
This approach doesnt apply just to digital products anymore. With the advent of 3D printing, customizationof physical goods is easier and cheap,and companies can truly tailor their offerings totheir customers. A doll company can personalizeeverything from hair color to eye shape, and automakers
and technicians can create laser-scannedreplacement parts for classic cars.Although thepotential for piracy will spread to industries thatbelieved they were immune to such disruption, businesseshave an opportunity to make money in thisnew paradigm by offering variety, complexity, andflexibility at little to no extra cost.
What Lovell calls the Curve is a ranking of yourcompanys potential customers from those mostlikely to least likely to pay for your product or service.It charts their interest against the amount they areprepared to spendbe it nothing at all or thousandsof dollars. The curve itself separates your revenue
opportunity (willing big spenders, your superfans)on the left from your marketing opportunity (freeloaders,whose only acceptable price point is $0)on the right. The area under the curve is the totalamount of money you might be able to get from yourcustomers or fans.
Lovell offers a strategy to draw more people intoyour orbit than was possible when physical costs limitedyour ability to expand. The Curve heralds a newera of creativity and business freedom.
