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The Drug-Dealing Model of Online Business
Jason Fried is the co-founder and President of 37signals, the Chicago-based web-application company. He has co-authored all of 37signals' books, including the upcoming, "Rework," as well as the 'minimalist manifesto,' "Getting Real: The Smarter, Faster, Easier Way to Build a Successful Web Application" He also helps to maintain the company's popular blog, Signal vs. Noise, and is regularly invited to speak around the world on entrepreneurship, design, management, and software.
Question: What is wrong with free content?
Jason Fried: You know, you walk into a bakery and get a free sample because they want to sell you a muffin. That makes sense. But you go online and use a website for free and there’s nothing to sell you, that doesn’t make sense. So, I think free is a great model as long as you have something to sell also. Free should be an incentive. We like to say that you could be emulating drug dealers, basically. You know, drug dealers give you a little sprinkle or a little taste and get you hooked, and then you buy from them. They don’t just give you more free drugs all day, you buy something from them. So, we’re a big fan of emulating drug dealers, basically, or bakeries. That might be a better way to put it.
But anyway, that model works. But the open source world, that’s kind of a different thing. There are some companies that opens source software and then sell support on top of it, so that’s one way to make money off of open source. For us, we think that the opens source thing works for us because, first of all, the product is better and we get to use Rails, and so if other people are improving it, that’s good for us, we can use that in our pay products. Secondly, whenever people mention Rails, they mention 37signals, they mention Basecamp or High Rise, or us in some way. And that indirectly benefits us as well. So, that’s kind of the guiding principle for us. So, some stuff is free, most stuff is pay.
Question: What is your outlook on the ad model?
Jason Fried: Well ads do make sense in some cases, but people look at Google and they go, “Well, Google is making billions on ads, they’re putting ads next to search results, like we should put ads next to everything too because it worked for Google.” Well it works for Google because, if you think about it, if you’re going to Google to search for something, you want to find something, then advertisers are pitching their wares that are relevant, it makes sense because I’m looking to find something and they have something for me that I could find and use. That makes sense. But throwing ads up along side content that doesn’t – I’m not going in there to find and search to buy something. I’m just going in there to read an article, that doesn’t work at all. So, you see a lot of companies in software like – if I’m using software to do something, I’m not using software to do something to find an ad, I’m using software to do something to do something. So, it works for Google’s model because that’s what I’m going in there to do, to discover, to learn, to purchase something.
But in most cases, if that’s not the case I don’t think ads work all that well unless you have a tremendous amount of traffic and that’s really, really hard. There’s also a problem with a disconnect between ads and users. My belief is that you can build a better business if the people that use your product are the same people who pay for your product. In the ad supported model, the people who pay for your product are not people who use it. People paid for the advertisers, and the people who use it are the users, so there’s a disconnect. So, who are you building it for? Who do you really have to make happy.
In many cases, it ends up being the advertisers which is why you see in a lot of news sites especially, there are ads everywhere. And that’s a pretty crappy experience, I think. So, I’m not a big fan of that model. I think that some people could make it work, but I’m not a big fan of it and I think the default idea of, we’ll just put ads on it. That’s what will support it, we’ll just put ads on it is a terrible idea. And it’s much, much, much easier to get people to pay for your product or your content, or whatever than it is to throw ads up.
And the last thing I will say about this is putting a price on something forces you to make it good, and that is like, those are the constraints you need on you; a force that forces you to make something good. Because if something is free and ad supported, it doesn’t have to be that good, it’s free. I’ll use it, it’s free. I don’t care. But the moment I start paying you for it, that’s the moment it forces you to be good and give me a service that’s worth paying for and that to me is the right pressure to have on a company.
Question: What companies are now deriving value in interesting ways?
Jason Fried: I like some of the more interesting. Like, one of the things I like today is, there is a company called Twilio, I think that’s how it is pronounced. T-W-I-L-I-O. And they are basically a new type of company that’s selling, I don’t’ want to get technical, but selling API access. Basically what they let you do is they let you create conference calls and/or voice mail systems, or phone trees with really simple programming language. And what they do is they sit in between you. So, if I’m a company who wants to make a conference calling system, I might use their technology, and then I might pay per minute for their technology instead of subscribing to them on a monthly basis, or whatever, I pay as I go. And I think that model is pretty interesting. It’s similar to the way Amazon is doing with the Amazon Web Services, where I can rent a server by the minute, instead of having to buy a server or pay upfront. So, I like this like pay per true use thing. I like that model a lot. So, I think that’s kind of a cool innovation that’s coming up right now and I think that those are interesting companies to watch.
The notion that advertising revenue can save content is looking increasingly untenable. Jason Fried explains why drug dealers and bakeries may have had the best business model all along.
Innovation in manufacturing has crawled since the 1950s. That's about to speed up.
SEAL training is the ultimate test of both mental and physical strength.
- The fact that U.S. Navy SEALs endure very rigorous training before entering the field is common knowledge, but just what happens at those facilities is less often discussed. In this video, former SEALs Brent Gleeson, David Goggins, and Eric Greitens (as well as authors Jesse Itzler and Jamie Wheal) talk about how the 18-month program is designed to build elite, disciplined operatives with immense mental toughness and resilience.
- Wheal dives into the cutting-edge technology and science that the navy uses to prepare these individuals. Itzler shares his experience meeting and briefly living with Goggins (who was also an Army Ranger) and the things he learned about pushing past perceived limits.
- Goggins dives into why you should leave your comfort zone, introduces the 40 percent rule, and explains why the biggest battle we all face is the one in our own minds. "Usually whatever's in front of you isn't as big as you make it out to be," says the SEAL turned motivational speaker. "We start to make these very small things enormous because we allow our minds to take control and go away from us. We have to regain control of our mind."
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Here's why you might eat greenhouse gases in the future.
- The company's protein powder, "Solein," is similar in form and taste to wheat flour.
- Based on a concept developed by NASA, the product has wide potential as a carbon-neutral source of protein.
- The man-made "meat" industry just got even more interesting.
Seriously sustainable<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTk0MDIzNS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMjM4NTMzMX0.BCEfYnn6C3z1zUHIS38xOWjXktgamNBi5iyqklSMYK8/img.png?width=980" id="ea524" class="rm-shortcode" data-rm-shortcode-id="50533380eeb18eb5833b6b6aa3abec38" data-rm-shortcode-name="rebelmouse-image" />
Image source: Solar Foods<p>Solar Foods makes Solein by extracting CO₂ from air using <a href="https://www.fastcompany.com/90356326/we-have-the-tech-to-suck-co2-from-the-air-but-can-it-suck-enough-to-make-a-difference" target="_blank">carbon-capture technology</a>, and then combines it with water, nutrients and vitamins, using 100 percent renewable solar energy from partner <a href="https://www.fortum.com" target="_blank">Fortum</a> to promote a natural fermentation process similar to the one that produces yeast and lactic acid bacteria.</p><p>When the company claims its single-celled protein is "free from agricultural limitations," they're not kidding. Being produced indoors means Solar Foods is not dependent on arable land, water (i.e., rain), or favorable weather.</p><p>The company is already working with the European Space Agency to develop foods for off-planet production and consumption. (The idea for Solein actually began at NASA.) They also see potential in bringing protein production to areas whose climate or ground conditions make conventional agriculture impossible.</p><p>And let's not forget all those <a href="https://www.bk.com/menu-item/impossible-whopper" target="_blank">beef-free burgers</a> based on pea and soy proteins currently gaining popularity. The environmental challenge of scaling up the supply of those plants to meet their high demand may provide an opening for the completely renewable Solein — the company could provide companies that produce animal-free "meats," such as <a href="https://www.beyondmeat.com/products/" target="_blank">Beyond Meat</a> and <a href="https://impossiblefoods.com" target="_blank">Impossible Foods</a>, a way to further reduce their environmental impact.</p>
The larger promise<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTk0MDI0MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NjU4MTg2OX0.7dZZYT5WEV_EupBuLVFwHynarTiz8RYR9aJtC6Ts2C4/img.jpg?width=980" id="3415d" class="rm-shortcode" data-rm-shortcode-id="2e6eebe06d795f844752f9e9d30040d7" data-rm-shortcode-name="rebelmouse-image" />
Image source: Solar Foods<p>The impact of the beef — and for that matter, poultry, pork, and fish — industries on our planet is widely recognized as one of the main drivers behind climate change, pollution, habitat loss, and antibiotic-resistant illness. From the cutting down of rainforests for cattle-grazing land, to runoff from factory farming of livestock and plants, to the disruption of the marine food chain, to the overuse of antibiotics in food animals, it's been disastrous.</p><p>The advent of a promising source of protein derived from two of the most renewable things we have, CO₂ and sunlight, <a href="https://solarfoods.fi/environmental-impact/" target="_blank">gets us out of the planet-destruction business</a> at the same time as it offers the promise of a stable, long-term solution to one of the world's most fundamental nutritional needs.</p>
Solar Foods' timetable<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTk0MTEzMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5OTU1OTMwMn0.wnXh56iO_77x2XKV2uIPf78BKw4AJLUpmiyq_JBVGvo/img.jpg?width=1245&coordinates=172%2C146%2C62%2C135&height=700" id="0297c" class="rm-shortcode" data-rm-shortcode-id="125c9a98ec818f5c241fa28ef1423e67" data-rm-shortcode-name="rebelmouse-image" />
Image source: Lubsan / Shutterstock / Big Think<p>While company plans are always moderated by unforeseen events — including the availability of sufficient funding — Solar Foods plans a global commercial rollout for Solein in 2021 and to be producing two million meals annually, with a revenue of $800 million to $1.2 billion by 2023. By 2050, they hope to be providing sustenance to 9 billion people as part of a $500 billion protein market.</p><p>The project began in 2018, and this year, they anticipate achieving three things: Launching Solein (check), beginning the approval process certifying its safety as a Novel Food in the EU, and publishing plans for a 1,000-metric ton-per-year factory capable of producing 500 million meals annually.</p>
The protein powder Solein. Image source: SOLAR FOODS
Is CRISPR the solution?
Even as the COVID-19 pandemic cripples the economy and kills hundreds of people each day, there is another epidemic that continues to kill tens of thousands of people each year through opioid drug overdose.