Lately, I’m hearing a delayed echo of the popular mantra of the Web in the pre-bubble late 1990’s…
“Hey, it’s FREE!”
The phrase is used as an excuse - for something that won’t work.
The phrase is used as a reason - to clutter your life with one more download.
The phrase is used as an incentive - to invest your time and energy on stuff.
That’s just downright STUPID.
Nothing is ‘FREE’.
Not really.
For those who think a free giveaway is free, here’s a term you may have heard about (or not)…
Opportunity Cost
It’s the cost of an alternative opportunity you might have had, one that you lost because of the free thing you were trying instead.
Opportunity cost is measured in time. What else could you have been doing in the time you wasted reading that trash filled ebook - just because it’s free?
Opportunity cost is measured in space. What else could have occupied the space of that widget that you displayed on your site or blog - just because it’s free?
Opportunity cost is measured in effort. What else could you have achieved with the resources, money, effort and energy you invested in trying out that service, product or biz-opp - just because it’s free?
When you ruthlessly measure your wasted opportunity in terms of dollars and cents - or anything else you treasure and consider precious - you’ll see that everything that’s ‘FREE’ has a significant (even if not immediately apparent) cost attached to it.
And remember - if FREE is your only consideration to trying out something, you’ve got a sorry life ahead. Just on the Web today, there are over 10 MILLION free ebooks you can download instantly and read. It’ll take you many lifetimes to get it done… that’s an extended analogy of ‘OPPORTUNITY COST’ for you.
So the next time you’re tempted to do something just because you hear folks saying: “Hey, it’s FREE”…
STOP and THINK.
What else are you giving up?
What else could you be doing?
What else is could you gain?
Be smart. Be focussed. Be analytical.
And make wise decisions - with your time, your talent, your resources.
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3 Comments Received
October 1st, 2007 @2:59 pm
Dr. Mani
Excellent post on opportunity cost.
This reminds me of an now amusing incident which happened to me a long ime ago.
I was then a doctoral student and was trying to explain to an accounting stdent , I was dating at that time, the concept of ‘no free lunch’ and opportunity cost.
Unfortunately my example was not a good one to tell a date.
I explained to her how the time I spent with her, even if we did not spend any money going out for dinner and hence free, had an opportunity cost. I explained(?) that I could have been using that time to study or work on my dissertation.
That was the opportunity cost I was incurring.
Nedless to say, it cost me more time and effort to mollify her.
I learned my lesson about examples for opportunity cost.
Sankar
October 1st, 2007 @3:47 pm
That’s a funny story, Sankar.
I’d have recommended you to take the opposite tack - and show her how by wasting time on studying and dissertation, you were incurring an opportunity cost… that ‘wasted’ time could have been more pleasurably spent in her presence!
Marketing will be useful anywhere, for anything!
Dr.Mani
October 3rd, 2007 @3:46 pm
Dr. Mani
I was young, then (long time ago) and was trying to impress her with my knowledge and intellect.
Learned one can be knowledgeable and still be very stupid. You are right about marketing being useful anywhere, anytime- especially if one understands the target audience very well and caters to the needs of the ‘market’.
Sankar
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