Business Model Innovation Hub
... where visionaries, game changers, and challengers discuss business models
Give the Book Away ? Open letter to the authors
I firmly believe that you should give away a free PDF version of your book. It would be a possibility letting the book spread virally, while adopting new sources of revenue and following the great examples within the publishing industry.
Once before, I have mentioned this in a thread here on the forum. The other day I was reading your blog and thought about this again. Soon after, I found myself writing an open letter to you and people in your situation.
Please forgive me for trying to tell you what you should do. This open letter is meant as an invitation for a discussion on this forum.
Here is why you should give away a free PDF version of the book.
Go Viral
The idea behind giving a free PDF away is that it will help you spread the ideas. True viral comes when people can not only tell their friends about a great product, but when these friends also have a chance to try it out and then again tell their friends. Products like Gmail and Skype are a great examples of how great products can spread virally, without any advertising. The reason such products spread so rapidly, is that people can actually try them out as and when they hear about it.
Adopting Freemium Principles
The basis of the freemium model is that you give a product away for free, in order to sell complementary products to a certain number of the free users. Flickr uses this principle to sell pro accounts to 5-10 % of their free members. The Brazilian tecno brave scene uses this principle, by giving the music away for free and selling tickets to parties.
This principle is ideal for a writer/consultant because the books can be used to promote an idea. Once this idea spreads, the writer/consultant can profit from this in a number of ways.
Or as Chris Anderson puts it
“I don’t write books to sell books, I write books to increase my personal “fame” and then capitalise on this in other ways.”
While Chris Anderson's book is very popular and sells well, this does not compare to the revenue generated by the high-price-tag talks he is giving around the world.
Great Examples of Success
Within the publishing industry, there are various examples of success achieved by releasing a free PDF version of a book. One such great example is that of Paolo Coelho.
In 1999 he posted a free Russian version of “The Alchemist” on his website. With no additional promotion the sales climbed from 1.000 to 10.000 within a year. The next year the sales reached 100.000 and by 2002 he was selling a million copies of several titles.
Personally he is convinced that the free download made the difference.
It Will Most Probably Not Hurt Your Physical Sales
Some smart guys are looking into the effect of ‘free’ on publishing.
Their initial results include an observation that “average results in small sample were up”.
Or in other words: Based on their initial findings, it seems that a free digital book helps the sale of the printed book.
Personally I looked into around 30 examples of authors providing a free version f their book for download. What I have found is that most of these were happy with the result obtained after providing the free copy.
There was only one author who expressed bad experiences. This was from raising a book solely online and depending on donations for all of his revenue. I conclude that even this single negative experience could have been positive, if the author had also sold a physical copy.
Recently Nine Inch Nails experienced something similar in the music industry. Even though their latest album was freely available with a Creative Commons License the album made it to the top of Amazons sales charts (besides generating a lot of revenue from their other products).
Walk the Talk
I have been following your blog for a while now and like the examples of business model innovation that you provide. One thing that I see that all great examples have in common is that they are all radical innovations that are modeled towards the specific circumstances of their target group. By providing a free PDF version you would be treading this path that has proved successful to many.
Radical innovation
Most of the examples you use are radical innovations, things that make these companies change the face of their industry by changing the business model.
A great way to illustrate this would be to adopt a business model that seems radical. In the writer/consultant industry, free is only now starting to catch on. By giving away a free version of the book, your own business model would seem radical.
Modeled Towards the Target Group
Giving away a free PDF gives you a unique opportunity to shape the business model towards the target group.
Within the segment of established businesses, you have a great possibility to sell workshops and talks at a high premium. Along with this, revenue could be generated from licensing, referrals or similar.
Amongst students, NGOs and similar segments, a free giveaway would give them access to your ideas and concepts. A free book could greatly increase your spread in these segments, which will palpably have a great spillover effect into the more mainstream and profitable segments.
This Letter is also posted in my freemium blog.
Once before, I have mentioned this in a thread here on the forum. The other day I was reading your blog and thought about this again. Soon after, I found myself writing an open letter to you and people in your situation.
Please forgive me for trying to tell you what you should do. This open letter is meant as an invitation for a discussion on this forum.
Here is why you should give away a free PDF version of the book.
Go Viral
The idea behind giving a free PDF away is that it will help you spread the ideas. True viral comes when people can not only tell their friends about a great product, but when these friends also have a chance to try it out and then again tell their friends. Products like Gmail and Skype are a great examples of how great products can spread virally, without any advertising. The reason such products spread so rapidly, is that people can actually try them out as and when they hear about it.
Adopting Freemium Principles
The basis of the freemium model is that you give a product away for free, in order to sell complementary products to a certain number of the free users. Flickr uses this principle to sell pro accounts to 5-10 % of their free members. The Brazilian tecno brave scene uses this principle, by giving the music away for free and selling tickets to parties.
This principle is ideal for a writer/consultant because the books can be used to promote an idea. Once this idea spreads, the writer/consultant can profit from this in a number of ways.
Or as Chris Anderson puts it
“I don’t write books to sell books, I write books to increase my personal “fame” and then capitalise on this in other ways.”
While Chris Anderson's book is very popular and sells well, this does not compare to the revenue generated by the high-price-tag talks he is giving around the world.
Great Examples of Success
Within the publishing industry, there are various examples of success achieved by releasing a free PDF version of a book. One such great example is that of Paolo Coelho.
In 1999 he posted a free Russian version of “The Alchemist” on his website. With no additional promotion the sales climbed from 1.000 to 10.000 within a year. The next year the sales reached 100.000 and by 2002 he was selling a million copies of several titles.
Personally he is convinced that the free download made the difference.
It Will Most Probably Not Hurt Your Physical Sales
Some smart guys are looking into the effect of ‘free’ on publishing.
Their initial results include an observation that “average results in small sample were up”.
Or in other words: Based on their initial findings, it seems that a free digital book helps the sale of the printed book.
Personally I looked into around 30 examples of authors providing a free version f their book for download. What I have found is that most of these were happy with the result obtained after providing the free copy.
There was only one author who expressed bad experiences. This was from raising a book solely online and depending on donations for all of his revenue. I conclude that even this single negative experience could have been positive, if the author had also sold a physical copy.
Recently Nine Inch Nails experienced something similar in the music industry. Even though their latest album was freely available with a Creative Commons License the album made it to the top of Amazons sales charts (besides generating a lot of revenue from their other products).
Walk the Talk
I have been following your blog for a while now and like the examples of business model innovation that you provide. One thing that I see that all great examples have in common is that they are all radical innovations that are modeled towards the specific circumstances of their target group. By providing a free PDF version you would be treading this path that has proved successful to many.
Radical innovation
Most of the examples you use are radical innovations, things that make these companies change the face of their industry by changing the business model.
A great way to illustrate this would be to adopt a business model that seems radical. In the writer/consultant industry, free is only now starting to catch on. By giving away a free version of the book, your own business model would seem radical.
Modeled Towards the Target Group
Giving away a free PDF gives you a unique opportunity to shape the business model towards the target group.
Within the segment of established businesses, you have a great possibility to sell workshops and talks at a high premium. Along with this, revenue could be generated from licensing, referrals or similar.
Amongst students, NGOs and similar segments, a free giveaway would give them access to your ideas and concepts. A free book could greatly increase your spread in these segments, which will palpably have a great spillover effect into the more mainstream and profitable segments.
This Letter is also posted in my freemium blog.
Replies to This Discussion
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Permalink Reply by John Sutherland on -
I'm with the free version
Don't forget the possibilities of "just good enough"
If you make the free PDF in black and white with some reduced graphics you still provide the basics of what you are offering. Those that want the "professional" version can then pay for it.
What’s intriguing in this discussion is that as bloggers we all give it away free anyway. The only difference is the time and energy required to organize it, which is substantial of course.
So the real debate is how much of the time and energy spent in organizing do you give away?
My sense is your “organization” around this topic is breakthrough. In my opinion the structure and ideas behind this piece of work will significantly uplift what people are able to accomplish. In that sense it is a breakthrough piece of work (Organization of thoughts)
However, breakthrough is not usually understandable on its own. That is to say someone who read the book won’t be able to explain it well to another person. As evidence, look at the fact that you do workshops to get people to “get it”
That argues for a freemium model.
Make the free model a lesser version (as described above) and you should boost color sales. It will also set you up for Business Models II – How to Implement
Glad it’s your choice and not mine
Cheers
John
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Permalink Reply by Peter Froberg on -
Just wanted to share a comment that came in on my blog
"# Apr 8th, 2009, Patrick Stähler
Hi Peter
Interesting idea. I did it with my Ph.D. thesis on business model innovation already in 2001 and due to the openness of the idea, it spread. You find the book either at Google Book Search (look up Patrick Stähler Geschäftsmodelle) or on http://business-model-innovation.com
The bad part is that the book was written in German so the market is limited, but if you understand a little bit of German, check it out.
It is fantastic to see how the idea of business model innovation spread with the book. In the old days an idea diffused from the top (eg professors to the students). Today, the world turned. The students find my book easily on the Internet, cite it and then it spreads to the top. Interestingly, my book is still being sold even after 8 years. And that is definitely due to open access on the web."
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Permalink Reply by Alex Osterwalder on -
Peter, thank you for the suggestion and thank you to all others for your thoughtful comments. It was very exciting to read your opinions! We held back with our opinion, because we wanted to hear your ideas!
The conclusion:
YES we will go FREE with the PDF: however, we will go with a slightly "lesser" version as some of you suggested in order to still boost book sales! This is also what Seth Godin mentioned in his free e-mail distributed book. The idea is to give the real thing (full content, full color), but in a particular format: two pages (spread) per PDF-page. That makes it possible to read, but slightly uncomfortable (e.g. printed on large A3 format). This way the content can spread. People will see the beauty of the book and those who want to can buy it. Those who won't buy it probably wouldn't have bought it anyway.
The big question is of course: what are the things we have to pay attention to so sales take off based on the free PDF... Suggestions?
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Permalink Reply by Peter Froberg on
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Alex, that sounds great with the free PDF. I will look forward to sharing it with my network.
You ask about what to pay attention to in relation to making sure that sales take of based on the free version.
My input would be to focus on three main areas.
1 Make sure that the free version spreads as much as possible.
The logic the a free PDF version of a book is. “ The larger supply there is of a product, the greater the demand will be for it’s complimentary products”
So in order to sell as much as possible, you need to spread the free version as much as possible.
You already have some nice social media initiatives like the great slideshare presentations and the videos. I would supplement that with a focused blogger out reach. Based on some of the great advise on blogger outreach from people like Chris brogan and Brian Solis.
If this is done by help of a freelacer from a place like elance, a large campaign can be done on a reasonable budget
2 Have the right products to sell.
Nine inch Nails created a great product portfolio for their ghost I-IV album. It was possible to buy products between $ 5 and $ 300. These products where aimed at letting fans connect with NIN.
The readers of your book are trying to asses the knowledge and method. You could create a range of product that lets them do that i different ways. Besides the standard book, a few of the many possible products could be :
A set of 20 “low quality” prints, for distribution in classrooms or among employes.
A download of the canvas and related graphics, for use in powerpoint presentations.
A deluxe version that includes a 15 min phone conversation with you for questions.
A customized video presentation of the canvas adjusted to a specific business.
A monthly webinar.
3 Ease the transition from the free PDF to the paid products.
Once the reader of the free PDF starts thinking that he should buy the book, the transition should be a easy as possible. Here one of the low hanging fruits is to include a links to the premium products without the free PDF.
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Permalink Reply by John Sutherland on
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I would include an option to buy the 4 ft x 10 ft plastic canvas that you use on the wall. Similar blank canvases are sold at $50 each with discounts for multiple purchases.
I could see using two of them myself, one for the current business model and one for a competing one.
The margins will be quite high on those
John
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Permalink Reply by Matthew Milan on -
I'd like to second John's idea. I would happily pay for a couple of these canvases to use with clients.
Matthew
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Permalink Reply by Alex Osterwalder on
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@John, Matthew, thanks for the feedback - definitely a path to pursue... Any particular aspects you would like to see as to the design of the poster canvas?
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Permalink Reply by John Sutherland on
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Use this design (without the feet of course)
see files
Package it with painter's tape to put on the wall, with a few post-it note packages and a soft cloth to erase the markers they might use to draw lines. Put it all in a box and sell the kit for $65US
Cheers
John - Attachments:
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IMG_0269.JPG, 2 MB -
IMG_0265.JPG, 1.9 MB
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IMG_0266.JPG, 1.8 MB
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Permalink Reply by John Sutherland on
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Photos of extra stuff here
Don't put large packet of post-its as they weigh too much
Cheers
John - Attachments:
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IMG_0271.JPG, 2 MB
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IMG_0272.JPG, 2.2 MB
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IMG_0273.JPG, 2.1 MB
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Permalink Reply by Alex Osterwalder on
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Hey, I like the idea of the extra stuff! Maybe post-it will become a sponsor of this :-) They are already sponsoring the event on the 19th of June...
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Permalink Reply by John Sutherland on
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Don't forget to have your post-its branded with your name and web site.
You can use different colors to represent the different areas, customer, offer, organization, economics. Put a shadow category on each type.
John
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Permalink Reply by Frank Meeuwsen on
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I have been reading this discussion with great interest, since we are actually giving away free books to our audience! I am the co-founder of Lifehacking.nl, a Dutch site on working and living smarter. You could see us as the Dutch counterpart of the popular Lifehacker.com, but we try to go beyond the nifty software and geeky Mac-hacks.
So far, we have released three complete ebooks for free and also made them available in print. We have seen tremendous results in spreading the word of Lifehacking.
1. 100 Lifehacking tips: In june 2008 we released our first ebook with the 100 best blogposts from our weblog. Slightly editted for print, some new screenshots and ofcourse a nice layout. We released the ebook on the same day it hit the stores.
Everyone who wanted to download the book, we asked them to leave their name and emailadress so we could contact them once we had new cool stuff to give away. About 15.000 people did...
2. Upgrade your Life: We translated this book from Gina Trapani (Lifehacker.com) and left out some real US examples and inserted some of our own. We gave the people who downloaded the first book a sneak preview and they could download the book for free one day before the rest of the world could. A very very large percentage did so. The book got released in print the same day as the PDF
3. Zen to Done: We got the rights to Leo Babauta's great "shortcut into GTD" and we had this translated as well in Dutch. We applied the same tactic, gave people who downloaded before a sneak preview to pre-download the book before anyone else.
We worked together with two great publishers here in the Netherlands, SDU (100 Lifehackingtips and Zen to Done) and A.W. Bruna (Upgrade your Life).
About the emailaddresses: Right now we have some issues with our mailinglistprovider so we are in the process of switching. Due to that, you don't have to leave your emailaddress right now to download the books.
What have we learned?
There are a few learnings we have by giving away free content.
Free works great for paying books!
Yes, the publisher still makes money. Even though the books are free online, there are still lots of people buying them in the store. Perhaps even more, since you can get a free insight in 200-400 page book before you decide to buy it.
Make it easy to buy
We are still working on this (we are no ecommerce experts) but it should be as easy as 1-2-3 to buy the book once you have the free PDF. As I said, we have the emailadress of our downloaders, so we can contact them and perhaps give them a nice incentive to buy the book. Also, the technological improvements on the PDF-format should make it easier to buy from the PDF itself. We are still looking into this.
Pick your moment!
This is something we really discovered by accident. We released the first book just before the summerholiday. A moment where a lot of people pick their books to take with them on vacation. Because we released the 200 page PDF for free, a lot of people downloaded it and checked it out. They then decided to buy it in hardcopy to take in their suitcase on their holiday. Also, the book is 200 pages big, you don't print that very easy. We tried it again with Zen to Done to release it in time for the holidays. Not only a great Christmaspresent but also nice to give to businessrelations as a holiday present. We definitely see interesting possibilities in using the right moment to release your free ebook
Love your audience
Above all, know who you are talking to! If your readers would like to see more of a specific subject, respond to that. On the Lifehacking Academies and with our presentations, we meet a lot of our readers and we always talk to them and see where we can help them.
Spread the word
Make sure you're on Twitter or any other social network of any importance to spread the word you are releasing free ebooks. Retweets are getting easier on different Twitterclients. We also take any opportunity to talk about the free downloads. Why? Because that's the Purple Cow for us. When we say we got a new book, well, take a number and stand in line. When we talk about how we are giving them away for free, people listen.
Work with publishers!
Don't forget to work closely with your publisher. They are the experts on publishing, bookdeals, legal issues, marketing etc. But don't be afraid to speak up and have your own opinion. We were very fortunate to work with great people at great publishers who are open for these new ideas and are willing to take a risk with it.
Think networked!
Don't think in big glitzy ad-campaigns, booksigning tours and TV appearances. Think one Tweet at a time, one download at a time. This stuff takes time and takes energy. Be prepared to give a lot to get a lot more in the long run!
What have we gained?
One of the biggest things we got from it was attention. Not only on our website through press and word of mouth, but also because we get invited to give talks and lectures on this subject (giving away stuff) and we host a paid Lifehacking Academy 4-5 times a year where we give workshops, unconferences and inspirational talks on a variety of subjects.
This attention is much more valuable in the long run becuase it gives us a platform to grow on, work together with more people and have the opportunity to spread our "gospel" of working smarter to people in the dutch government, financial world and healthcare.
Our publishers have gained tremendous insight in their audience. Think about it: What would you rather have? Sell 10.000 books but you don't know who they are, if they are interested (on an individual level) in more titles from you catalog? Or have 10.000 names and adresses for you to start a conversation with about your future books, perhaps sell more titles on a personal level and find new information on your market?
The future
We are currently negotiating deals together with some publishers on releasing more free ebooks. I can't give you any names yet but it sure looks promising. We are also vamping up our own online store where you can download the books but also buy them immediately. We are also looking into the ereader market. In the Netherlands we don't have the Kindle yet, but there are some other ereaders who look promising. Think about giving away ebooks to your readers but gaining a two-way conversationchannel while they are reading the book!
Hope this helps!
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