Washington DC- March 11, 2010

The opening morning of Yanik Silver's Underground Seminar kicked off with young "Moguls" discussing their stories on how they made, and lost, tons of money.  There were some very interesting human interest stories, like Andrew Thompson, and some good, humble, "stuff that makes sense" stories from Neil Patel.   The most interesting part of the morning came from a panel discussion of young entrepreneurs .

There was a spirited divide on the "free line", as it is called in the Internet marking world.  The debate was basically over how much content, or product, you should give away for free. On one hand, there is the Kernsian (after Frank Kern) theory of giving away tons of free stuff and also give away your best stuff.  This model works well for some because you collect valuable information like email addresses and contact information for thousands of people.  Then, at some point, since the user now either "knows, likes, or trusts you", you hit them up with an offer for a billable product. 

The other side of the argument , a trend that is now emerging in Internet marketing, is "pulling the free line back" and NOT offering as much for free, or offering very little.  The theory being that free trials and free users convert very poorly to products sold.  "Once they are used to the free stuff, you have a hard time telling them in the future, okay, now it's time to pay."  I will call this Deissian (after Ryan Deiss) who says if you bring value to a person and you have a good product, you should get paid for it, and subsequently, people will pay for it.

I am fascinated by the movement of the group toward no longer giving stuff away for free.  My question is this, "Is the movement away from lots and lots of free stuff part of a cyclical pattern that is just natural progression and will reverse course in a few years and everyone will give tons of stuff away for free again?  Or is it more of a results of the recession we are in where everyone is seeing their numbers drop and looking at their websites and trying to figure out how to create more revenue per visitor.  Credit card companies are doing it, airlines are doing it (charge for a bag).  Is this a movement toward "nickel and diming" followers because times are tough and every $27 charge helps right now?  Check out http://www.TheInternetTimeMachine.com for more information on how to get great ideas on what to sell people, believe it or not, it is actually just what they are looking for..

My feeling is that the strong will survive this argument and if you can hang on during this recession and still give out tons of free content and goodies, you will be rewarded by the massive list you will create, as well as good will, and when things turn around economically, you will reap the benefits. They say in the stock market "this time is different" all the time, and each time, it is always the same.  The same rule applies for the business model where the "money is in the list".  The bigger the list of interested people in your product the more money you are going to make over time.  It is all about the list, in good times and in bad.

I would love to hear other peoples on this so feel free to Facebook or Tweet this in order to get a conversation started.  If you are on YouTube, leave a comment.