When you decide you need to learn something, probably the first thing you think of is to find a book on the subject. It may not be the best idea, but it will probably be the first.

And sometimes it is the best way; and it’s certainly the way I’m most familiar with, so that’s where I’m starting the series.

Step 1: Pick a Book

In some cases this may be done for you: in class, the teacher/professor may have selected a book and ordered you to read it — in that case, all you can do is hope that it’s good.

But if you’re learning on your own time, for your own purposes, then you need to select one. At the library or bookstore, head to the right section, then just read through the titles. Do any catch your eye? Do any seem to be addressing the specific problem you’re having? Pull the likely ones off the shelf and open them to a random page. Does the advice make sense to you? Is it too complex? Too simplistic? Does it seem to actually address the specific problem you’re having?

You can also do a quick web search or ask for recommendations from your friends/family/coworkers/geeky friends.

Step 2: Get a recording medium

Just reading a book does very little good unless you actually retain and — here’s the difficulty — think about what you’re reading. You may even disagree; that’s fine, as long as you’re thinking, analysing, and processing.

And for that, you need some way to lay your thoughts out and look at them. I prefer to have a spiral notebook, because handwriting connects to my brain better than typing. My fiance prefers to type; in that case you could keep a document on your computer, use MS OneNote, or even start a blog. You could get a voice or video recorder, and tape your thoughts (and make a podcast or video podcast of it, if you’d like). Or you can start a book club, where everyone can put forth their analyses and discuss each others’. Just find some way to make yourself process what you’re reading

Step 3: Read. Carefully

If a sentence, paragraph, or chapter don’t make sense to you, then stop and re-read it. What doesn’t make sense? Are they using jargon you don’t know? Go look up those words. Does the logic not make sense, you can’t follow their argument? Re-read the section, starting with their premise and following the logic step by step. Do the data seem wrong? Do a web search and see if you can find any evidence for or against their claims. Do you think there’s a glaring flaw in their reasoning? Write/record/bring it up in your book club, and explain where you think the flaw is and how your reasoning changes the conclusion being drawn. Don’t proceed until you’re sure you understand what the author is saying.

Step 4: Apply

You got into this because you wanted to learn something, to solve some problem you’re having. So how do these lessons help? If you’re learning some background theory, then apply each lesson or chapter to your situation: what do these statements imply about your scenario? If you’re learning a specific how-to, then what would you have to do in order to actually do these steps? What would they look like in the case of your business/product/family/life? I like to do this throughout the book, but you could do it at the end of each chapter or section if you prefer.

Step 5: Summarize

When you get to the end of the book, look back over what you’ve read. Look over the notes you made. What were the most important things? Why are they important? Overall, do you agree or disagree with the author? Why? What do you want to differently as a result of your reading?

There you go: the book-learning methods they never taught you in high school.

Resources for Further Reading
Writing for you, and why it works at drawing others to your blog

So here you are, ready to set off on your self-monetization journey.

You realize that you don’t know everything you’ll need to know if you’re going to be successful. So now what?

Option 1: Give up in despair. It’s a surprisingly common option.

Option 2: Learn what you need to know. That’s the option we’re going to discuss here.

Why you don’t know how to learn

In our society, there’s a pretty clear distinction between times of your life where you’re being educated, and times of you life where you’re not. Almost all “education” happens in the first 24 years of your life, and thereafter you’re off the hook; you don’t ever have to learn or study ever again.

…unless, of course, you actually want to succeed in life. Because

(a) school doesn’t teach you everything you need to know (or, in some cases, hardly anything you need to know) and
(b) the world is changing much too quickly for stuff you learned when you were 24 to actually be helpful for more than 5 years or so.

Which means you need to study.

Now of all the faults of the US school system (and they are legion), one of the biggest is that it gives you almost no training in how to study. It gives you lots of training in how to prepare for a test. But very little training in how to learn something you actually care about, for yourself, in a way that actually imparts useful information into your brain that you could then apply to a real problem.

So the bad news is, you probably have no idea how to study.

The good news is, you probably have no idea how to study. Which means the thing you’re thinking of when I say “study” (probably involving lots of coffee, a long night before a test, and using highlights, flash cards or other tools to memorize a bunch of unrelated facts) is not what studying is really about.

It should be noted that my method requires actual effort, and (depending on what you’re studying) can be a lot of work. But remember that this isn’t for a test on a subject that you never cared about anyway and only took because it’s on the list of requirements. This is for something that you care about, and that you need to be able to meet your goals and follow your dreams. Which makes it worth at least some effort.

How to Study

So being in your situation, there are 3 things you need to do:

1. Figure out what you need to learn I realize this sounds dumb. But it’s a very important step, and it’s one you don’t learn how to do. In school they tell you what you “need” to learn, and you “learn” it. But here you have to figure out, first and foremost, what it is you’re trying to study.
2. Figure out the best way to learn it This depends on many things: your learning style(s), what you’re trying to learn, and why you’re trying to learn it. In some cases you may want to read a book and take notes; in others, you may want to jump right in and try it over and over until you get it.
3. Arrange to do that Again, in school, they schedule lectures, labs, and tests, and take attendance to make sure you’re actually keeping to the schedule. Here, you’re the one in charge of it. If you need practice time, make sure you have time set aside for it. If you need a book, make sure you buy it or check it out. Figure out how to get your studying done.

So that’s the essence of it; after that, you just need to do it.

In future posts, I’ll talk more in detail about each of those steps, and discuss various study techniques and tools.

There’s some segment of the population who believe that the US economy is going to collapse completely in the next 2 years, and that all sorts of disasters will then follow (world economy collapse, governmental collapse, etc). And they may even have a point at this moment, although rumors of impending economic collapse have been around for more than a century (don’t believe me? Read Thoreau).

But they always follow this up with “Buy gold!” The theory being that if the US dollar becomes worthless, you’ll still be able to buy things with gold, gold being the one true standard of value.

But as Scrooge McDuck himself has pointed out, gold is – in and of itself – pretty worthless. You can’t eat it, can’t wear it. It has value only to the extent that people are willing to trade it for food and clothing. It relies on a social contract just as much as US dollars do. And if the social contract has broken down to the point that US dollars are no longer accepted as currency, there’s a reasonable chance that gold won’t be accepted as currency either.

Where is the wealth of a country?

What made the US an economic powerhouse, what made us the richest country in the world and our currency the international currency-of-choice, was not gold. Was not our huge tracts of land nor the (admittedly extensive) natural resources that accompany them. What made19th-century Americans richer than anyone in history, gave the country a reputation as a place anyone could make their fortune, and raised standards of living by several thousand percent, were things like:

• An environment where you get to keep most of the results of your hard work
• an environment where you can start over after failure
• recognition of opportunities
• ability to form teams and work together
• hard work
• creativity
• courage and determination

Those things aren’t based on the value of a dollar. Just the opposite: the dollar is based on those. When the US left the gold standard in the last century, we instead based the economy on the true value of the nation: hundreds of thousands of people, working day after day, to make this world a better, more comfortable, easier, safer place for their children and grandchildren.

Want Safety? Invest in You

Those things aren’t going away. They’re what Steve Pavlina calls “internal resources” – things that really can’t be eliminated by time or circumstances. No economic collapse can make you less brave, less creative, or less capable of teamwork.

If you really believe that change is coming – whether a total economic collapse or simply another Great Recession – then the best thing you can do is invest in yourself. Make you a valuable resource, that can be used to acquire resources like money, food, and shelter. As a basic starting point I’d recommend:

• Make an assessment of your skills and experience. What can you do? What can you make, manage, create, design, implement, or discover? As you’re compiling your list, look not only at the specific experience you have, but at the general skills behind them. A telemarketer who’s not afraid of confrontation could do well as a negotiator or in law enforcement; a church youth coordinator may make a great teacher, or manager-of-linchpins; and I’m convinced that there is no one better at juggling multiple priorities with limited resources than a stay-at-home parent.
• Look at your unique set of talents. What can you do well? What comes easily to you? What questions do people ask you, what problems do they bring you? How do those fit in with your skills? What skills might you be able to add to your repertoire without much difficulty?
• Get comfortable with being in charge of your own income. Learn to analyze your spending. Learn to create a budget for an unsteady income. Figure out how much it really takes to keep your household going month to month. Learn how to run a small business – even if it’s just a vegetable-growing business. Practice meeting new people, keeping track of them over time, and telling them what you do. All of those skills—accounting, networking, sales, and financial planning – will come in handy no matter what the situation is.

What to do in case of economic upturn

Happily, and unlike buying gold, all of those skills will also serve you well if the economy doesn’t collapse. If the stock market continues its rebound, the dollar stays high and business booms, then you’ll be in a great position to take advantage of it by getting a better job (through your enlarged network and improved resume), earning freelance money on the side (through your newly-developed professional skills), or starting your own booming business (now that you know how to run one).

Invest in you. You can’t go wrong.

I just came across a post from Seth Godin titled The worst voice of the brand is the brand. He says:

When a doctor rips off Medicare, all doctors are seen as less trustworthy.

When a fundamentalist advocates destruction of outsiders, all members of that organization are seen as intolerant.

When a soldier commits freelance violence, all citizens of his nation are seen as violent.

When a car rental franchise rips off a customer, all outlets of the franchise suffer.

Seems obvious, no? I wonder, then, why loyal and earnest members of the tribe hesitate to discipline, ostracize or expel the negative outliers.

“You’re hurting us, this is wrong, we are expelling you.”

I’ve seen this phenomenon many times: a group of talented, enthusiastic, passionate people (Linchpins) get together, form a group dedicated to a purpose…. and then rip it apart with politics, infighting, and backstabbing. I wrote about the phenomenon in Working with multiple linchpins: in most cases, the problem is not that you can’t get people to work, but that you can’t get people to stop working… or to agree on which direction the work should go.

This centrifugal tendency of linchpin-y groups is often used as evidence that a flat, democratic organization full of strong-minded individuals cannot compete with a hierarchical autocratic organization full of obedient sheep. But in fact, I believe the problem is a single misconception held by many communities:

“Equal and democratic” does NOT mean you have the right to act in ways that damage the community

It means that no one person has the right to tell others what to do. It means that every person must submit to the agreed-upon decision-making process. But if someone in the group is acting in a way that is detrimental to the purpose and process of the group as a whole, then the others in the community have not only the right, but the obligation to oppose those actions.

How to stop your worst voices

Set clear expectations

I discussed this in Working with multiple linchpins also: it’s almost impossible to get a bunch of linchpins working together unless you’ve all agreed ahead of time on what you’re trying to do, and how you’re going to get there. So make it clear what the group goals are, and make sure everyone knows that they’re expected to contribute to those goals.

Step in early

Maybe it’s just me, but I always have a hard time figuring out where to draw lines. If someone makes a comment that’s only a little offensive, do you say anything? If so, how do you justify slamming down hard on someone who’s only a little out of line? But if not, then how do you justify slamming down on the next comment, that’s only a little more offensive? Or the one after that, or the one after that?

The best solution I’ve found is to try to react in direct proportion to the offence. Instead of attacking all-out (“HOW DARE YOU SAY SUCH A THING! HAVE YOU NO RESPECT!”), I might respond to a mild insult with “Wow, that was harsh.” In most cases, mild reprimands will communicate your concern, and the other person will change their behavior. But in cases where it’s not enough, you’ve established a precedent for a more severe reprimand when the behavior continues.

Plan for negative outliers

When you set out the goals of the group, and work out a decision-making process, also decide how to handle someone who doesn’t comply with those decisions. Who will decide whether the accused is indeed in violation of the agreements, and how? How should group members handle someone they believe to be in violation of the agreements? What consequences will result from violating the agreements, and who will decide on them? As with all other decisions, these questions can be answered with a trial and jury, by a single executive, by group vote, or whatever other method fits your group and your circumstances. But having these agreements made ahead of time can prevent a lot of standing around, shuffling feet, glancing sideways at each other and wishing someone else would take care of it.

What else have you found helpful in keeping a community healthy and productive?

No posts next week. I’ll be incommunicado, doing the most important thing I ever do.

I’m working as “responsible adult” (or as I like to tag myself, an “allegedly responsible adult), chaperoning a church trip. 23 ninth graders will be going to the Hopi and Navajo reservations in New Mexico and Arizona.

They’ll learn how other cultures live… ‘cuz it’s one thing to be taught that some people lead their lives differently, and another to actually be there and see it.

They’ll learn how to live on a bus for 10 days without killing each other.

They’ll learn how strong a community can grow when people accept each other for who they are.

They’ll learn that they can show others who they truly are, and be accepted and loved for that.

They’ll learn that their greatest value and beauty comes not from fitting in, but from the things that make them unique.

The harvest is plentiful, but the workers are few

The first year I did this, I was amazed at the creativity, strength, intelligence, and beauty of the ninth graders on that trip. I’ve since learned that every group of ninth graders is equally creative, strong, intelligent, and beautiful. I’m amazed every year at the potential and capacity in our youth.

I must conclude, by extension, that this same potential exists in everyone. That every person has an amazing soul with amazing capacity for beauty and contribution. The harvest of our future society is plentiful indeed.

But the workers are few. A huge portion of that potential is being squandered or outright squashed, simply because there’s no effort to develop their unique gifts. Our teachers are poorly paid, and working in a system that allows very little individualization. Our schools are aimed more towards eliminating creativity, initiative, and courage than developing them. Parents don’t have time — between making a living and recovering from making a living — to help their kids grow, explore, and learn. And no one’s even telling them that they have options other than soul-destroying 40-hour-a-week jobs.

I want to make a world in which these kids don’t have to trample their own inner beauty in order to make a living. I want to make a world where more people can afford to take the time to help them grow. I hope someday that this blog will contribute to that, but for now, I’m helping ninth graders, one 10-day trip at a time.

May your next 10 days be equally important.

Seth Godin recently posted a fantastic article on why and how to fail.

Favorite line: “There are some significant misunderstandings about failure. A common one, similar to one we seem to have about death, is that if you don’t plan for it, it won’t happen.”

If you’re going to fail, wouldn’t you like to fail correctly?

I want you to be rich.

That’s why I’m writing this blog; in hopes that I can help you stop trying to make money from a dead-end soul-killing job, and figure out how to instead make money in a way that puts your income, schedule, and activities under your control. From there, you can use that capability to set your own goals, and change the world.

“But Amanda”, I hear you cry, “We can’t all be rich!”

Ahh… but I think we can. And here’s why.

We are all rich

As the global standard of living creeps up, it’s easy to forget that it is creeping up. But if you go back far enough, it becomes obvious that it has. Let’s go back to 17th century Germany….

• In most households, somewhere between 70% and 100% of the family income goes towards food
• Most houses have one room. Maybe 2.
• Dental care, antibiotics, and the germ theory of disease are all unknown (translation: doctors don’t wash their hands before operating on you.)
• Water must be fetched from the well.

All of the following were luxuries available only to the rich:

• Individual beds for family members and multi-room houses
• A diet that varies from day to day
• Glass in your windows
• Water that doesn’t kill you
• Chocolate
• Multiple sets of clothing
• Travel beyond, say, 10 miles
• A means of transportation besides walking

And these weren’t available to anyone, no matter how rich:

• Water at the twist of a handle
• Indoor toilets
• Double-paned storm windows
• Insulated walls
• Air conditioning / Central heating
• Advil
• Penicillin
• Sudafed
• Transportation that goes faster than 25 miles/hour

So it’s pretty obvious that in actuality, we are all rich. Every single person in the US and Europe, and many people in South America, Africa, and Asia.

But that doesn’t count… I mean someone has to be poor relative to others

Sure, but let’s take a step back here. Why would you even want to be rich?

Some people are competitive, and care about being richest. Fine; feel free — doesn’t bother me. But for most of us, being rich is not a goal in and of itself. We want to be rich in order to have the time and money to pursue what we really care about… whether that’s time with our family, deeper spiritual development, or saving the [insert disadvantaged lifeform here]s.

In fact, we’ve seen a transition over the last century towards a more equitable and level distribution of wealth: in terms of buying power, there’s no one as rich as Rockefeller and Carnegie were at the end of the 19th century, but there are a lot fewer people who are as poor as people were at the end of the 19th century. Some people think we’ve seen the end of the super-rich, and that the wealth distribution of the future will be between those with enough, and those with more than enough.

No, we can’t all be the richest person in the world. But we can all be rich enough.

But there’s just not that much money floating around

Not necessarily true, but let’s ignore that for the moment.

Maybe you won’t ever have a trillion dollars in your bank account. But again, take a step back and look at the reasons you want to be rich. I suspect you’ll find that Robert Kiyosaki’s approach is a better definition for you than any arbitrary net-worth figure:

“Rich” is not measured in money. It’s measured in time. How long could you go without working? That’s how rich you are

By this definition Thoreau, with his $0/year income, was rich, because he didn’t spend any time earning income. He could do whatever he wanted with his day, because he had no outside obligations.

Note that there’s no guarantee you’ll get to laze about all day: Thoreau actually had time constraints in growing the vegetables on which he lived and maintaining his house, and so on. But he was happy with the work he had to do, and could schedule his time however he liked, and so he was rich.

That’s what I want for you: to spend the day doing what you’d like; either because doing what you like makes you money, or because your earning money is independent of what you do all day. (Or some combination thereof). If you can earn your living by doing what you want, then I’m calling it “rich.”

We can all be rich

So yes, we can all be rich. There’s nothing unsustainable about it.

Resources for Further Reading
Is it evil to make money?
Eat Pancakes and Change the World
Forget the Lexus; Buy an Olive Tree
Homework: What do you care about?

I’ve been doing some introspective thinking lately, about why I’m writing this blog, and what I want to accomplish here. And I thought it was only fair to share what I’ve found.

I’m pissed off. I was betrayed, at many different levels, and in many different ways.

My preparation…

I always did well in school; my dad was a schoolteacher, and he knew how to make learning fun. I have a high IQ, which is supposed to correlate with academic success, and it did.

I was always shy; I have to think through before I say anything, which makes it hard to have a casual conversation, which makes it hard to make friends. In elementary school, my total number of friends could be counted on one hand; in middle school, 2 hands; when I graduated high school I had a couple dozen signatures in my yearbook. No one ever tried to help me with that, and it never affected my ability to succeed in school.

I was always temperamental: I have a tendency to get angry if people don’t rearrange their schedules and their lives to suit me, whether the expectation is reasonable or absurd; I also tend to assume malice in cases where stupidity or negligence would be completely adequate explanation. This rarely came up in school — except for exacerbating my social problems — so it was also ignored.

I went on to college, also did well, and set out to find a job. Since I had been successful in school, I expected to be successful in life.

….and the result

Instead, I learned:

1. Academic achievements feel awesome for a couple of weeks, and then you go back to feeling empty and listless.
2. Except in academia, the skills you learned in school — how to memorize large amounts of information, and write 3-page papers analysing that information — don’t help you in any jobs.
3. Although what you know is important, who you know is also important — people with a bunch of friends, and who are able to make friends, are at a significant advantage.
4. You can’t accomplish any important goals if you lose your temper dozens of times a day.
5. There are lots of ways to make money that don’t involve crappy jobs, if only you’re prepared to take advantage of them.

So I’ve spent the last 8 years trying to make up for these deficiencies, and I’m still not done.

Why I’m writing this blog

That’s not even what pisses me off. What pisses me off is that it’s still happening. People are still being sent into the world with these expectations; they’re being “prepared for the real world” in ways that are detrimental to their ability to thrive in the real world.

So that’s why I’m writing this. I hope, that by outlining what I’ve learned, I can save some people some time. Maybe help them make better decisions before they go the wrong way and have to turn back. And ultimately, I’d like to change the system so that people get the education and training they need to succeed in this new “real world” that globalization and automation are creating.

I hope you’ll help me.

Free: The Future of a Radical New Price is the most recent book from Chris Anderson, the author of The Long Tail. It explores a relatively modern phenomenon: free products, services, and content. As he describes it:

I’m typing these words on a $250 “netbook” computer, which is the fastest-growing new category of laptop. The operating system happens to be a version of free Linux, although it doesn’t matter since I don’t run any programs but the free Firefox Web Browser. I’m not using Microsoft Word, but rather free Google Docs, which has the advantage of making my drafts available to me wherever I am, and I don’t have to worry about backing them up since Google takes care of that for me. Everything else I do on this computer is free, from my email to my Twitter feeds. Even the wireless access is free, thanks to the coffee shop I’m sitting in.

And yet Google is one of the most profitable companies in America, the “Linux ecosystem” is a $30 billion industry, and the coffee shop seems to be selling $3 lattes as fast as they can make them.

Therein lies the paradox of Free: People are making lots of money charging nothing. Not nothing for everything, but nothing for enough that we have essentially created an economy as big as a good-sized country around the price of $0.00. How did this happen and where is it going?

That’s the exploration he makes in Free. How do you make money without charging? And what are the consequences for us as consumers, us as business owners, and us as citizens?

Why you shouldn’t read Free

Starting back with my very first book review (Rich Dad, Poor Dad), I always start my reviews with the negative aspects of the book. And, like Rich Dad, Poor Dad, Free has had its share of angry detractors. I summarize here from Malcom Gladwell’s review of the book.

1) Information doesn’t want anything
Many a young hothead has justified piracy, wikileaks, and violations of non-disclosure agreements with the rather vacuous “Information wants to be free.” Their opponents point out that information doesn’t want anything. But Free puts the quote in context. As originally stated by Stewart Brand:

On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other

Free is a book about those two dynamics: should information be priced according to the cost of reproducing it, or according to its value? Which one is better for your business? If free is better for you, how can you leverage it? If charging is better for you, what are your options?

2) Free is just another price
Technically speaking, yes. Free is a price of $0.00. But people respond differently to $0.00 than they do to $0.01.

Free has a discussion of the reasons for this phenomenon, and situations that illustrate it, but suffice to say that we don’t analyze our options as carefully when there’s no money involved. Which means you can spread your message farther and faster with Free than you can with Very Low Cost. And that makes it worth analyzing.

3) Free often doesn’t work
YouTube is losing money for Google (as Gladwell points out, at a rate that would qualify it for a bailout, were it a bank). Lots of artists and authors are giving stuff away and not becoming famous. Therefore free doesn’t work.

I don’t expect that there’s anyone out there surprised that giving stuff away doesn’t always make you money. And no one ever claimed that giving stuff away would work every time, for every person.

On the other hand, I expect there are some people who are surprised that anyone has made any money giving stuff away. It’s an interesting phenomenon, and it’s worth learning more about when and how and why it works.

Anderson is a bit of an academic. He’s certainly a geek. And his writing tends towards the analytical and theoretical. He’s looking for first causes and underlying reasons, and that may not be your cup of tea. So you may prefer to absorb this information through the (free) audiobook, or through Wikipedia, or through the videos I hope to someday make.

That being said, you need to absorb this information somehow, if you intend to make money in the upcoming decades. As it says in rule 7 of Abundance Thinking:

Whether through cross-subsidies or software, somebody in your business is going to find a way to give away what you charge for. It may not be exactly the same thing, but the price discount of 100 percent may matter more. Your choice: Match that price and sell something else, or ensure that the differences in quality overcome the differences in price.

Note that you don’t have to give away your value (although you can), just that you have to be prepared to handle competitors who give away theirs. And to do that, you’ll want to know all of your options.

Why you should read Free

So let’s move on to why you should read Free, since — as I’m sure you’ve guessed — I believe you should.

Free Works
Not always. The book is full of examples of “failed” free.

But that’s rather the point. If it were as simple as

give stuff away -> Profit!

then you wouldn’t need any help figuring out how to make use of this “radical new price”. It’s because there are failures that it’s worth discussing the method.

There are also examples of successful free — Google loses $700 million on YouTube, but still makes $23.6 BILLION overall. Xiang Xiang wouldn’t charge for her songs even if she could. Skype has become a word in the Oxford English Dictionary.

If someone can make free work, wouldn’t you like there to at least be a possibility that it’s you?

Free is more complex than you’d think
Leaving aside that the English word “free” covers two distinct concepts (freedom, liberty, aka “free like speech” vs no charge, gratis, aka “free like beer”), Anderson still identifies four different methods of generating “free” value.

1) Direct Cross-Subsidies
This is the kind of “free” that we’re most familiar with: the one where they offer you a free lunch if you buy a drink, or a free kids’ admission if you buy an adult’s ticket, or a free laptop if you sign up for 2 years of Verizon’s data package.

Sometimes this is a fancy version of bait-and-switch (that laptop ended up costing you more than $1400, for which you could have gotten a really nice laptop). Sometimes it’s really a good deal for both the business and the consumer (like when the museum still makes money on the adult admission, but you still get a nice outing with all the kids at an affordable price). But when Heinlein fans say “TANSTAAFL” (There Ain’t No Such Thing As A Free Lunch”) this is the kind of hidden cost they’re usually thinking of.

2) Three-Party Market
We’re all familiar with this one too: it’s the “free” of television and radio. The stations produce content and broadcast it for free. Advertisers pay them for the right to interrupt the content and market to us. We pay advertisers by buying their products.

TANSTAAFLists are still happy, since we’re paying more for our consumer goods than we would in a world without TV advertising.

3) Freemium
A contraction of “free” and “premium”, freemium products are anything that are free to basic users and have a premium paid version. Skype is freemium: Skype-to-Skype calls are free, and you pay for Skype-to-Phone. Almost all smartphone apps are freemium: there’s a basic free version, and a version that costs $1.99 with more features (or takes away the annoying ads). Most video games will let you play a couple of levels for free, and charge you for the whole game.

4) Non-monetary Markets
Wikipedia, a lot of the blogosphere, and MIT’s OpenCourseWare are all examples of this: the value is free because its creator values something (reputation as being an expert, self-expression, or the opportunity to show off) more than they value money. In many cases the artists could charge for what they’re producing, but they’ve made a conscious choice to take their payoff in wider distribution, reputation, or whatever.

Free is changing
Anderson notes that as he was researching and writing the books, he found two very different opinions of “free”. As a broad generalization, those over 30 were generally TANSTAAFLists — when someone starts talking about “free”, it’s time to make sure your wallet is protected. These are the people who grew up with the 20th Century Free, which was almost always of the direct-cross-subsidy type, and very often of the bait-and-switch type. Since the “free” samples cost the companies money, the companies had to more than make up that cost in the cross-subsidized products.

Again as a broad generalization, the under-30 crowd was so comfortable with the idea of free economy that they were surprised anyone would write a book on it. These are the people who grew up with the 21st Century Free, which includes some really high quality stuff at the cost of some ads, some reputation, or the understanding that you’ll subsidize it if you’re able. Because these “free” samples really are costing the company nothing (or next-to-nothing), they’re not as determined to make their money back from genuine customers, and so there’s more room for genuine win-win arrangements.

Summary

The fact that we now can distribute information and digital products for free has a profound effect on how we can make money. It means you can try business models for very low risk: $10 or less. It means you can reach millions of people for very little money. It means you can help hundreds of thousands of people, even if only a tiny percentage of them pay you back.

The same factors that Anderson analyzes in this book are the factors that make it possible for you to monetize your hobbies and passions. It’s worth knowing what they are.

Buy Free: The Future of a Radical New Price while simultaneously helping African children get an education. (Learn More).

Resources for Further Reading
Monetize Yourself Media: share your expertise for free
Distillery Tours and Alternate Monetization

No post today.

Instead, go check out my post on Multiple Passions, Multiple Incomes on Kirsten Simmons’ Multi-Passionate Productivity.

Multi-Passionate Productivity is for those people — like me — who have never managed to settle on just one thing that they love. They used to call us “Renaissance Men”; now they call use “Unfocused” or “Afraid of Commitment”. Well we’re fighting back! Kirsten discusses how to embrace all your passions and still get something done.

Check out and enjoy her blog.