Re: [projectvrm] The free customer and the three base business models ...

[Peter Cranstone < >]

I agree.

I always remember 2 things:

1) Free is not a business model (there is no such thing as free, it¹s
merely subsidized)
2) Hope is not a strategy.

What I see a lot of, is what I call soliloquy chats - we all talk about
the Œcustomer¹ but we never identify the customer by name and we never
actually show the value of VRM to that customer AND vendor. For all this
to work we¹re going to have to have a named customer, a named vendor and
we¹re going to need to prove empirically that value is created, exchanged,
AND preserved, (inasmuch as the customer continues to trust the vendor and
they exchange more value over time).

It¹s really fricking hard to go from soliloquy chats to the real world.
You have to ship working code, get the customer to switch, get the vendor
to integrate new tech and then you have to measure the results.

Companies will never do VRM unless as Johannes says it allows them to
compete on the merits in the marketplace and with negligible switching
costs to the customer, drive net new margins for themselves. Again this is
why I push the browser approach - the cost to switch for the customer is
simply a URL and NOTHING new to learn. (UI remains the same).

It¹s no longer enough to postulate how much our privacy is worth because
Œwe the customer¹ never get to touch that value in our bank accounts which
is where it really counts. It¹s like a mortgage on a house - the second
you make that down payment you¹ll never see that money again - it simply
moves with you from house to house.

We have to show that item 1 below really works.



Peter





On 12/13/13, 12:58 PM, "Johannes Ernst" 
<
 >
 wrote:

>Doc's talking about the "free customer" got me thinking.
>
>There are only three base business models I can think of:
>
>1. Compete on the merits, with negligible switching costs for the customer
>2. Acquire and exploit a critical resource
>3. Regulatory capture.
>
>(For detail, I just blogged about it here:
>http://upon2020.com/blog/2013/12/there-are-only-three-base-business-models
>/ )
>
>It seems to me that only the first of these models is compatible with the
>idea of a "free customer".
>
>If I am right, this means that all of our business models are severely
>constrained if we pay more than lip service to VRM and related things. I
>don't mean "constrained" in a negative sense, but certain business models
>would have to be rejected out of hand for new companies. And existing
>companies will never "do VRM" unless they buy wholesale into my model #1.
>
>Thoughts?
>
>Cheers,
>
>
>
>Johannes.
>