free

Chris Anderson, Wired’s Editor-in-Chief, just posted the main arguments from his new book, “Free.” Chris is well known thanks to his last book, “The Long Tail,” which explored the interaction of consumption patterns and distribution. “Free” is the logical next step. Just as decreased search and distribution costs enable niche demand to generate as much aggregate consumption as the more popular part of the curve, decreased hosting, processing, and bandwidth costs are driving the cost of web services to zero.

To free.

Chris is a very sharp guy. However, what inspired me about “The Long Tail” was not the story he told about long-tail consumption. Instead, it was how long-tail thinking could be applied to community, innovation, and learning. I wrote about this in the “Collapsing Geography” paper, but to sum up:

This same power law distribution is a suitable approximation for other aspects of innovation and collaboration, beyond the Long Tail of consumption Anderson describes. Consider the potential entrepreneur: how many factors act to prevent someone from even attempting to build a business? Remember, this is not just the investment of dollars, but also includes time, social risk, and other elements. Even a basic requirement for a lawyer or license is a substantial hurdle.

In cultures or nations that generate many of these impediments, only a few entrepreneurs even try. While they may be the best funded, most determined, or most risk-tolerant entrepreneurs, innovation — as a random walk through design space — is dampened by significant reductions in participants. Inventory and shelf space pressures will tend to constrain a market to the top of the power law, reducing the variety and ignoring a lucrative customer base. In the same way, regulatory, legal, or social pressures also prevent entrepreneurial activities.

Given that innovation occurs at the intersections between information and social networks, yet another Long Tail exists, that of long-tail communities. New York city supports an unparalleled number of differing, overlapping communities, thanks to the density and diversity of its population. When communication technologies allow similar numbers of communities to form and intersect at a distance, the opportunities for innovation expand tremendously.

Long-tail communities aid long-tail innovation.

In a similar way, what excites me about “Free” is less the insight that any web-based service is going to face enormous pressure to be free, but the increased relative cost of what is left. After all, if duplication, storage, and distribution are free, then the percentage of your product or service costs associated with design, development, and support increase proportionally.

Not to mention the cost of your customers’ time.

Intel and AMD are fighting it out to ensure that computing power is free. Where is the competition to make it free to develop a great user interface? A compelling experience? To support millions of users?

To create something worth spending your increasingly fragmented and limited time using?

Certainly, open source development, Creative Commons, and other crowd sourcing models are creating additional tools for reducing design and development costs. Moreover, Y Combinator, 37 Signals, and others are demonstrating that certain forms of software development are much cheaper than they used to be.

But the iPhone’s interface wasn’t created by two people over a weekend. World of Warcraft was an enormously expensive endeavor.

Tools and technology to attack the not-free portions of development are one my favorite topics when I think about what’s next. They could make for some really fun projects.