Grow your business? Give your product away

Marc Acito: Grow Your Business? Give Your Product AwayThe future of our economy occurred to me while I was doing yoga in New York's Bryant Park. I know I was supposed to concentrate on strengthening my core and breathing through my anus, but I have a restless mind which tends to wander and, with blue skies and Times Square in the background, wander it did.

Bryant Park Yoga is sponsored by the apparel company lululemon athletica. Supplying a staff of eight twice a week for a free public class (not to mention park rental) costs the company real bucks. Yet this kind of loss-leader isn't unusual for lululemon. Last year in Portland, Oregon, the company sponsored 21 consecutive free nights of yoga at their retail store.

It impresses me when businesses give stuff away. We're not talking a T-shirt, key-chain or mug here, but two hours a week of priceless relaxation.

Of course, the free-giveaway concept isn't new. According to Karen Karbo's compulsively readable The Gospel According to Coco Chanel, the French designer started the idea of giving away dresses to prominent people for publicity. Or at least Chanel took credit for the idea, which is almost better.

Indeed, a free perfume giveaway to American GIs in Paris was how Chanel avoided getting arrested for collaborating with the Nazis. "Giddy soldiers lined up around the block," Karbo writes, "guaranteeing that if the police came for her again they'd have to get past her own personal army."

More importantly, according to Karbo, Chanel didn't discourage cheap knock-offs, but encouraged copying:

How else was she going to spread her style, and by extension, her philosophy? The rip-off artists provided free publicity, of which Chanel understood the importance long before anyone else.

This philosophy seems to be a cornerstone of what's being called the "sharing economy," though I can't verify who's calling it that. Certainly it's working for Brazilian novelist Paulo Coelho, who defied his publisher by pirating his own books.

In 2001, Coelho found a pirated copy of his novel The Alchemist, translated into Russian. At that point, it had only sold 1,000 copies in Russia. So he put the book online to download for free. The next year, over 10,000 copies of the book were sold and the next year over 100,000. "It was, believe it or not, the free-for-download book; people downloaded it, started reading it, liked it, and bought it," Coelho says. "In the third year we had over 1 million copies, now we're over 10 million copies in Russia".

"Sure," you think, "that works if you're already a famous author or important designer or you're giving away peaceful anus-breathing in the park. But will it work for my product?" I hear you, even though you're only thinking. And I don't know the answer.

But as I enter my third year of underemployment, I'm willing to try anything. So if anyone has ideas on how to make this new model work, I'd love to hear them. Leave a comment below. After all, we're in a sharing economy.

And that, my friends, is The Upside.
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