Barry W Thornton Blog

Just about every Sunday I race my sailboat in a fleet out on the lake I live by. We try to go for just over 2 hours, depending on the wind and that means a course of 5 to 15 miles. I have a big boat and race other folks with big boats, we all depend on our crews to make the boat work right, to squeeze the best possible speed at all times on all tacks. We have a strategist, a tactician, guys who make the motor perform (in this case the motor is the sails), and some who drives the boat. We have a management team. For those of you who care, the driver is not in charge (more about that in a later blog).

After 2 and half hours and miles of water on a nice sunny day you can win or lose by an inch, which in that sense is no different that a foot, a yard, a furlong, or a league; you lose and that’s it. It means that every second of the race is critical and any mistakes can be fatal in terms of getting to the finish line first. Because we all make mistakes the general rule is that the guy who makes the fewest mistakes that day wins. Sure you can be second, or third, and still get iron (a trophy at the end of the event), but, well, you understand. Oh yea, there’s nothing for fourth place.

I depend on a team, skill and communication are critical, mistakes happen and they suck, there is no time off, once you cross the start line you are in the on mode for every second until you cross the finish. Let your attention drift on for a minute and you pay the bill.

Martin Luther King used to talk about keeping your eye on the prize, don’t get distracted or diverted, always focus on why you are there.

Does that sound anything like business?

Welcome to shared realities.

Over the last couple of years the mantra FREE has become a big deal in software and web stuff, the idea has attracted my attention but couldn’t see an application. I always looked at it as attracting bottom feeders. How do you build revenues when you give it away? (I know, you get them later or with more features or threaten to cut them off when they get used to it or some other scheme, but it was always about incremental cheap stuff.)

What do you do when your product cost $40k+, can you make that free too?

In some cases, yes. I made us one of those cases so we did it.  We give the hardware free at our dealers. Oh, and by the way, I make more income this way than I ever could selling it. In fact I raised the price to make sure no one buys it so they have to go the free route.

Confused, OK, mine is a special case. I have a product that renders a billable service.  Too expensive to sell easily and without a major marketing effort.

It dawned on me that since the word DISCOUNT sucks when you are on the selling side of the equation that the opposite of MSRP had to be FREE.   I simply said, let me put  it into your place for nothing and let’s split the revenues it generates.  You never buy it, I always own it, you sell the service, and collect the money which we split. Simple, not necessarily a new idea, but one I had never tried. All my life I have sold products as in it becomes yours and you do with it what you want, with it.  I go on to fine a new customer,

Anyway, some folks call it the ATM or Vending machine model.

It is great new world for me.  Now your customer is my customer too because we both get money from them. Turns out there are other benefits too. I now get to see inside a bunch of different ‘retailers” and since it’s in my best interest for the retailer to be very very good at selling and delivering our now shared service, and because of this relationship I have a say in how they do it (if they don’t do well I can take my unit back and get someone else to make money with it), I can make them better even against their will, or perhaps awareness. I learn best practices by watching the good ones and make the poor one learn how to do it right, they have no choice, they make great money with me and that is the glue. If ego gets in the way, if they are dorks, if they are screwing up the market, whatever it is that makes them a poor performer or a pain, I can now fix or flee but I don’t have to suffer. And the revenue flows literally forever.

So I say “Thank You to FREE”, it works in ways I had never imagined.

That’s why we must always learn and adapt.