Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it)

by Salim Ismail

Kelly identified the following eight ways to build a business model when the underlying information is free: Immediacy: Immediacy is the reason people order in advance on Amazon or attend the theater on opening night. Being the first to know about or experience something has intrinsic cultural, social and even commercial value. In short: time confers privilege. Personalization: Having a product or service customized just for you not only gives added value in terms of quality of experience and ease-of-use or functionality, it also creates “stickiness,” as both parties are invested in the process. Interpretation: Even if the product or service is free, there is still considerable added value to any service that can help shorten the learning curve to using it—or using it better. Kelly often jokes: “Software: free; the manual: $10,000.” Authenticity: Added value comes from a guarantee that the product or service is real and safe—that it is, in Kelly’s words, “bug-free, reliable and warranted.” Accessibility: Ownership requires management and maintenance. In an era where we own hundreds of apps on several platforms, any service that helps us organize everything and improve our ability to find what we need quickly is of particular value. Embodiment: Digital information has no “body,” no physical form, until we give it one—high definition, 3D, a movie screen, a smartphone. We willingly pay more to have free software delivered to us in the physical format we prefer. Patronage: “It...