The Free Trap
Since Google had shut down their Google Reader app there are now countless speculations on what lies next on their hit list. Perhaps it is Feedburner, itself a former acquisition, an app that powers RSS delivery and analytics for many blogs across the Web, including mine. The Reader closure isn’t the only one – Google is known to launch more services than it can feasibly focus on and maintain, which they then end up culling during a “spring cleaning” initiative. It doesn’t matter if the project is a high profile venture with many resources and much energy invested in its development – if it doesn’t fit Google’s strategy and product line vision it will be shut down, as evidenced by the closure of the much lauded Google Wave.
Such closures have been met with disappointments, and in the recent case of Reader, with much disdain and anger. Since Reader was always free, it destroyed the market for paid alternatives, and because Google had provided a means of interfacing with the data, native apps for the desktop and mobile have been built from the ground up to sync with Reader and rely on Google’s infrastructure for RSS feed management and delivery. In this way, the going away of Reader has not only upset people using the Web interface, it has also upset people who use native apps built on top of it.
A while back I wrote an article for Smashing Magazine, titled Uncompromising Design, which explored the pitfalls of releasing free apps and services in the hope of monetizing them later on. It seems to me that Google Reader is a prime example of the failure of free. Reader was launched as one of Google’s many “exploratory” projects, as a way to expand their user base and grow the Google ecosystem. With such projects, time is the judge of success, that is, it is only after a certain amount of time has passed that you can tell if the expansion in market share delivered by the product justifies the costs of running it, or, in cases like Twitter, if a monetization strategy can be built on top of the free product to make it pay. In this way it is a gamble, more so for the user than the creator, and not a clear transaction of value. The value proposition here is: feel free to use our service, but if in time we find that it’s not making us any money we’ll shut it down. The cost for the user is risk.
In practice, free products end up working as traps, both for the creator and the consumer. The absence of a price tag attracts many more users than the provider can profitably sustain, and while on the face of it the large user base appears as an indicator of health, behind the scenes it is an ever growing cost center, requiring more resources and maintenance time by the day. When the venture is inevitably shut down, the user base reacts in anger because to those users you appear to be taking away something they thought they had, a product they had the perception of owning. The press backlash following product closure is yet another cost on top of the resources spent developing, running and maintaining the project, and it results not only in a surge of bad publicity, but also in damaged confidence. If you’ve closed down a product people were using, would they trust you enough to sign up for anything else you are to release? Some users may even consider moving away from existing free products in order to avoid a future migration headache.
At the root lies the value proposition, or, in this case, an apparent lack of one. What is the user (not customer) getting, and in exchange for what are they getting it? With free products both sides of the equation are vague and ever changing. Since there is no “purchase” of anything in particular, the app or service you are provided with can change its nature and functionality at any moment, and since the business model is yet to be found, a new “price” may be introduced for the user, whether in the form of new subscription plans, advertising or something more dubious like the sale of your information to third parties (or in the case of Facebook, a throttling on the reach of your messages, unless you pay). In some cases, the equation evaporates altogether as the product is deemed a failure and closed, forcing people to seek an alternative.
Because the relationship between the business and the customer changes with every decision the business makes without the consent of the customer (since this is not a trade, with no contracts signed beforehand), the customer will always feel ill disposed towards the business, will always be suspicious and wary of the business that controls the future of the app or service they rely on. Free products put the user and the business into an unhealthy, apprehensive and distrustful relationship, with the company and the user having little respect for each other. The chances of a good outcome here aren’t very good because to make the free product pay you either change how it works, which will likely upset users, or shut it down, which will definitely upset users. Google’s successful monetization of search is the exception, not the norm. As for users, free products cost them their privacy, their time and their data (which they might lose when the service shuts down). There’s no free lunch.