The Cost of Free

Kodak (the camera and photography company) used to employ 140,000 people; today Kodak is gone, bankrupt, the younger generation don’t ever remember them.

Instagram (an online photo-sharing, video-sharing and social networking service that enables its users to take pictures and videos) has over a 100 million people that use it every month.

The business was sold to Facebook in 2012, it fetched around a billion dollars and at the time had 13 employees. The company probably didn’t have employees who were much different from many of the people who used to work for Kodak.

My view is that Instagram actually had a workforce of around the number of people who use what they give away. The difference is this, those people work for the company for FREE, nothing, zippo, complimentary, costless, for the love of it, chargeless, gratis, you get the picture.

So, the value of a billion dollars arose from the number of users who contribute to the network but the problem is this, only a small number of people get paid which then segments wealth into fewer hands and limits overall economic growth.

Therefore I would argue that we have allowed ourselves to become multiple sources of uncompensated data generators. Making a few people wealthy beyond comprehension along the way.

In a nutshell this continuing hollowing of paid work has resulted in increasing unemployment numbers, and it will get worse as companies simply cannot generate revenue and pay people to work there when everything is free.

So next time you use a free service think about whether it really is free in the longer term or whether this “costless apportunity” will cost you your job and keep your children on the unemployment scrapheap.

We can’t all develop super cool apps and sell them to Google or Facebook anyway. Do yourself a long term favour and start paying for a few things this year.

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