You have to be better than free

I am republishing Kevin Kelly’s essay, which I read on Tim Ferriss’s Blog. You won’t find a better explanation of the world we live in today. The internet has become a copy machine. Whatever you make can be copied for free, improved on by someone else, or made better with a few prompts to an AI model. How do you make money when better is available for free? Kevin lays out eight ways below. And Tim gives eight examples of people following those ways to make millions.

Even if you don’t see yourself as an entrepreneur or creator, this essay is relevant to you. Because you will have to become one. You will have to figure out what you sell and how you sell it. You will have to create value to survive. To be given an opportunity to create value, you will have to be trusted by your partners, employers and employees. For example, trust is the one thing that can’t be copied, faked, or downloaded. It has to be earned. Trust is the reason why a company will pay you a million dollars even when knockoff solutions are ready to offer a solution for a tenth of the price. There are eight other things that you should keep in mind. Kevin puts it better than I can, a few paragraphs down.

This essay is one of the most useful things I have read this year. Everyone making anything should read and re-read it.

Enter Kevin…

In the analog world, it takes great effort to make a copy. That friction worked as a constraint to limit the propagation of copies. If you wrote a book or developed a photograph or carved a statue, it took trouble to reproduce it. We invented a legal system whereby we would reward the creator of the book or the photo or the art or the music or the device by preventing others from reproducing copies of it without the creator’s permission. Creators were granted a temporary monopoly to make the only copies available via a copyright—the right to make copies. Selling legal copies became the livelihood of most creators.

In the digital world, copies are so easy to make perfectly, they are free. The internet is basically a copy machine. The copies flow so fast and easily you could think of the internet as a superconductive fluid that transmits copies everywhere, all the time. Once a creation is brought into contact with the internet, it will be copied forever, and those copies never leave. With copies free and freely distributed, the traditional livelihood of creators selling copies is gone.

We now live in a digital age. If perfect reproductions of our best efforts as creators are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless, and stuff which can’t be copied becomes scarce and valuable.

When copies are free, you need to sell things which cannot be copied.

Well, what can’t be copied?

There are a number of qualities that can’t be copied. Consider “trust.” You can’t purchase trust. You can’t duplicate it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, a stranger will always prefer to deal with someone they can trust. So trust is an intangible that has increasing value in a copy-saturated world.

There are a number of other qualities similar to trust that are difficult to copy, and thus become valuable in this network economy. I see roughly eight categories of intangible value that we purchase when we pay for something that could otherwise be free.

In a real sense, these are eight things that are better than free in the eyes of the creator. Eight uncopyable values. I call these values “generatives” because they must be generated, grown, cultivated, nurtured in context of the exchange with the buyer. A generative thing cannot be copied, cloned, stored, faked, replicated, counterfeited, banked, or reproduced. Instead the generative value must be generated uniquely, in place, in time. These generatives are what are sold, not the copies that carry them.

Eight Generatives Better Than Free

1. Immediacy — Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, the second it is produced — by its creators is a generative asset. Many people go to movie theaters to see films on opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via streaming or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. You might pay for a writer’s timely newsletter to get their insights that later appear for free on the web. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often devalued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie or a car. But immediacy can be found in any media.

2. Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound acoustically perfect in your particular living room — as if it were performed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, no ads). Aspirin is practically free, but aspirin tailored to your DNA would be very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time-consuming. You can’t copy the personalization that a relationship represents. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset and will be reluctant to switch and start over.

3. Interpretation — As the old joke goes: software, free; the software manual, $10,000. But it’s no joke. Consultants make their living doing exactly that. For instance, for 25 years the for-profit company Red Hat has been selling support, training, consultation for enterprises using Linux and other free open source software. The copy of the code, being mere bits, is free — and becomes valuable to a user only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting a copy of your DNA is not free, but soon it will be. In fact, I’d bet that pharmaceutical companies will eventually PAY you to get your genes sequenced because they can sell targeted drugs to you that don’t work for everyone. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.

4. Authenticity — You might be able to grab an app for free, but you might like to be sure it is bug-free, reliable, and warranted. You’ll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was, indeed, actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity — a signature — to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

5. Accessibility — Free doesn’t mean it is easy to get. A clearinghouse that can offer otherwise free material in a format that we find easy to use will get our money (Spotify, Amazon Prime, etc.). We want our particular music (remember my tastes), at any time, anywhere in the world. Ditto for books and blogs and movies and apps. In fact, ownership is overrated. Even free stuff has to be stored, backed up, and tended to keep it accessible. An agency can do that for a fee. It works with us to keep everything in order, at our fingertips, with a uniform and dependable interface and therefore acts as a generative force for the copies.

6. Embodiment — At its core the digital copy is without a body. You can take a free copy of a work and throw it on a phone. But perhaps you’d like to see it in hi-res 16K on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. That hardcover book is embodiment. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same physical room? Sure, the hi-res of today — which may draw ticket holders to a big theater — may migrate to your home theater tomorrow, but there will always be new, insanely great display technology that consumers won’t have and will have to move their bodies to. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. The book is free; the bodily talk by the author is expensive. The movie is free, but the toy merch is expensive. This formula is a common one for many creators.

7. Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation because it allows them to connect. But they will only pay if (1) it is very easy to do, (2) it entails a reasonable amount, and (3) they feel certain the money will directly benefit the creators. Radiohead’s high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead’s case it was about $5 per download. There are many other examples of the audience paying simply because it feels good. The advent of Patreon, a reliable platform that enables fans to easily, dependably, and satisfyingly pay for free stuff is a great boon to creators. I run two different Substack newsletters that are free. But many readers pay for it (via the easy subscription mode) just because they want to establish a connection with me — by directly supporting me. I thank them personally.

8. Findability — A price of zero does not help direct attention to a work. In fact “free” may sometimes make it easy to ignore. But no matter what its price, a work has no value unless it is seen. Unfound masterpieces are worthless to the world. When there are millions of books, millions of songs, millions of movies, millions of apps, millions of agents, millions of everything all demanding our attention — and most of it free — being found is valuable. We pay the big aggregators like Netflix (and some users, like me, pay YouTube) in part to help us find good free stuff, which is why creators hook up with them. Right now the technologies of findability favor the economic interests of the big aggregators, rather than the creators, who only get a fraction of what the audience spends on their work. Alternatives like my 1,000 True Fans model can help, but are still constrained by the difficulty of findability. One of the promises of AI is that it could enable a more decentralized matchmaking function that would connect the creator who has a one-in-a-million interest with the thousand possible fans in the world with the same one-in-a-million interests.

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In short, money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits. Careful readers will note one conspicuous absence so far. I have said nothing about advertising. Ads are widely regarded as the solution to the demise of the copy because they are attention magnets. Ads have almost been the ONLY solution to the conundrum of the free. Most of the suggested solutions I’ve seen for overcoming the free involve some measure of advertising. Ads do work, but I think they are only one of the paths that attention takes, and in the long run, they will only be part of the new ways money is made selling the free.

Maintaining generatives is a lot harder than duplicating copies. These eight qualities require a new skill set. Success in the free-copy world is not dependent upon the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse. These generatives are very human skills, by the way, which AIs are not very good at – yet.

Kevin Kelly is Senior Maverick at WIRED, which he co-founded in 1993, and the bestselling author of books including What Technology Wants, The Inevitable, and Excellent Advice for Living. Explore his work at KK.org, subscribe to his KK Substack, or follow him on X/Twitter and Instagram and on YouTube. Kevin’s most recent interview on The Tim Ferriss Show explored his life philosophy, optimism, advice for younger generations, and more.

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Back to me, Tim:

To make this concrete and provide a dose of inspiration, here are a few friends and past guests who each embody at least one principle brilliantly.

1. Brandon Sanderson. His “Four Secret Novels” Kickstarter raised $41.75 million, making it the most-funded campaign in Kickstarter history. Fans paid extra for backer-first releases, lavishly illustrated premium leather-bound hardcovers, swag boxes, and a yearlong experience. For a deep dive on Brandon’s business, check this out.

2. Ben Thompson (Stratechery). The tech news is free everywhere; subscribers pay $15 per month for his interpretation. Stratechery was an explicit inspiration for Substack and an early proof that a one-person publication could scale through paid subscriptions.

3. Maria Popova (The Marginalian). Since 2006, The Marginalian has remained free and advertising-free, supported by reader patronage. Its value is Maria’s trusted curation, synthesis, and ability to draw unexpected connections across literature, science, philosophy, and art.

4. Derek Sivers. He says he replies to every personal email and sells his books directly from his own site, including every digital format with a purchase and pricing additional paper copies close to cost. The words are easy to share; the direct relationship with Derek is scarce.

5. Ryan Holiday (Daily Stoic). The free Daily Stoic email reaches roughly one million subscribers. Its paid offerings include physical coins and medallions, challenges, courses, memberships, signed and leather-bound books, and an actual bookstore, The Painted Porch.

6. Seth Godin. More than 10,000 free blog posts built the trust. Books, talks, courses, and the cohort-based workshops he pioneered turned those freely available ideas into deeper, participatory experiences.

7. Boyd Varty. His books and free podcast distribute his ideas inexpensively; the scarce offering is a five-day Track Your Life retreat at Londolozi, including wildlife-tracking expeditions, personal coaching with Boyd, and work with master trackers. You cannot download that.

8. Matt Mullenweg. WordPress is free and open-source. Automattic—the company behind the hosted WordPress.com service, WooCommerce, Jetpack, and other products—provides paid hosting, security, commerce, support, and other services around an open ecosystem. It is a modern version of “software, free; the software manual, $10,000.”

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.