Kevin Kelly's Eight Key Scarcities

from the business-models-for-the-next-century dept

One of the coolest things in writing out my own economic theories on new business models has been seeing some other, much smarter, folks coming up with similar thoughts at the same time. Chris Anderson, editor-in-chief of Wired Magazine and the author of “The Long Tail” is working on a book about “free.” He’ll be showing how it’s not such a crazy idea to price things at free — and it’s actually been done for ages. It should go well with the books on the number zero that inspired some of my thinking. Chris and I have had a few talks about these theories, and I can think of no one better suited to chronicle the history of “free” as it fits into the economic realm. On top of that, it appears that former Wired editor-in-chief Kevin Kelly is now working on another book that touches on the space, and he revealed some of the thinking behind it last week, noting:


“When copies are super abundant, they become worthless.
When copies are super abundant, stuff which can’t be copied becomes scarce and valuable. When copies are free, you need to sell things which can not be copied.

Hopefully that sounds familiar, just much more eloquently stated than I could put it. While I noted that, even beyond tangible goods, there are always scarcities associated with digital goods, Kelly has put together a fantastic list of eight categories of scarce goods associated with digital goods, noting that each one is “better than free.” It’s a list worth memorizing, because combinations of those eight things represent the key to a bunch of new business models: Immediacy, Personalization, Interpretation, Authenticity, Accessibility, Embodiment, Patronage and Findability.

It’s fantastic to see these ideas getting more and more serious study — and it also highlights how ideas and concepts spread. All three of us (and quite a few others as well) all came to these ideas through a combination of factors — mostly independently, I’d imagine. Some interacting with each other. Some through interacting with others. I know that much of my thinking was driven by certain professors I worked with and other books that I read — combining the different ideas I learned about into this understanding.

If you truly believed in the importance of artificial scarcity, we would all be hoarding our ideas or keeping them secret. Yet that would limit all of us. Seeing Chris and Kevin independently writing and speaking eloquently on these topics helps me both better understand the concepts myself, while also giving me an opportunity to build on their works, to incorporate their thoughts into my own writings, and to hopefully take those thoughts (combined with my own) into new and different areas as well. I can’t see how anyone could consider the idea of building on someone else’s thoughts “stealing.” It appears to be a lot more like “learning” to me. It’s the same thing that I see happening here every day as well. While there continue to be people who challenge us in the comments (often helping me to better understand my own arguments as well), I’m also constantly amazed at others who take my own arguments in the comments and make them better. We’re all building on the work done by each other, making all of us better off in the long run. It’s really quite an eye-opening experience.

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Comments on “Kevin Kelly's Eight Key Scarcities”

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16 Comments
Nicksays:

Mike,

I can’t help but think that one of you influenced the other. But that is not necessarily a bad thing. Let’s see if they credit you or each other or put their efforts into a single book. BTW, IT Conversations just published a 30 min talk by Chris on this topic. http://itc.conversationsnetwork.org/shows/detail3328.html

I am going check out the Charles Seife book soon.

Re:

You’e actually crediting yourself with inventing those theories and that they are not some how intrinsic to ecconomic theory ?

Huh? No, exactly the opposite. I’m saying they are intrinsic to economics, and it’s nice to see a lot of people recognizing that at the same time. I’m not taking credit for the ideas at all. I thought I was clear on that, and I apologize if you seem to think I implied otherwise.

Anonymoussays:

Re: Re:

Is your theory an hypothesis or something stronger like the theory of evolution or something in between?

So far it hold true for a lot of people, including an entire sector or two(like the free/open source software market), and little people like me.

I managed even able to find one guy who produce public domain softwares yet was able to depend on pure patronage from fans worldwide. While the patronage is small($500-600 steady every month I think), he is quite unknown among the public. I am certain that he will earn more as his reputation and fame grows.

koreshosays:

Re:

“One of the coolest things in writing out my own economic theories on new business models has been seeing some other, much smarter, folks coming up with similar thoughts at the same time.” -Mike

Funny, I wouldn’t call that crediting himself- I’d call that him saying that it is cool that others are coming up with the same ideas at the same time.

Jonsays:

Potential Legal Argument vs. IP Laws

Your last statement about building upon others ideas is learning has a lot of potential. I would argue that fundamental process of learning is exactly that. Sharing of ideas and building upon them. This could be used as a legal argument vs. IP. Not necessarily applicable to current cases of violation, but more towards bringing sanity to the IP laws.

dorpussays:

Scarcity of Standards?

Market forces can and do fail to resolve discrepancies in standards. Government and quasi-governmental organizations such as ISO have legislated standards where market forces failed. Once upon a time, international shipping was a nightmare of incompatible containers where each company built cargo containers in funny sizes, requiring their own proprietary equipment. Today, it is against international law to ship cargo in containers that do not meet ISO standards. A container must have certain dimensions, meet structural strength requirements, and pass wear resistance tests. In 1961, the International Organization for Standardization (ISO) formed the TC104 (Technical Committee 104) which has contributed to the establishment of an international standard for containers, useful for international distribution.

Additionally, the Intergovernmental Maritime Consultative Organization (IMCO) created uniform regulations on safe containers by establishing the container subcommittee in 1969. This organization also adopted the International Convention for Safe Containers (CSC) as an international convention for safe containers in the ?International Conference for Containers? held by the United Nations Economic and Social Council in 1972.

Nicksays:

I think what Mike gets credit for is drawing relevance between the ideas in the book Zero to the monpolisitc business models that companies try to replicate with internet, and then helping to popularize the idea in the tech blogosphere. But then again, this is not the point of the post. It is that the idea, no matter where it came from, is spreading, and that others are contributing, using different/better explanations.

GeneralEmergencysays:

But isn't this what the record companies tried to

“When copies are free, you need to sell things which can not be copied.”

So how do you keep people in the recording and other digitizable content industies from interpreting the above mantra as “Slap DRM on everything!”.

How do you break the “DRM Works Myth” cycle? And why is the first stop on this frustration train, always a search for a technological solution? What is it about people that makes it so hard for them to get beyond the “Lock it Down” mentality? Is it possibly because that in nature, there is no equivalent to “Infinite Goods”?

Air comes to mind as a possible “Infinite Good”. Nobody fights over air. (Yet?)

Selling real stuff for real!

I’ve got a catalog more than hundred strong of
TsunaMiXes.

Up to now I’ve only published 31 of then online &
only in low res for promo.

So when I have a catalog a 1000 strong I’ll be
willing & able to sell a full res distribution
rights for a good price (in uncopyable medium).

In the meanwhile I’m letting others give away
their stuff for free in hi res…

That’s only a glance of my strategy…, to get
the lowdown you’ll have to pay…, if you can
afford my fee!

You cannot CRUSH ME with overwhelming competitive
advantage! ’cause I’m really a genius but I’m
poor (for now, don’t worry I can afford to feed
myself), you cannot buy that.

In the long run authenticity prevails!
If I get monied wanabe copycats trying their hand
at TsunaMiXing anything. Then the worth of what
I’ve produced is only gona go up!

Look at what happened the ones who downplayed the
first works of the impressionists.

Know your art history & you wont
have to repeat it.

Martin aka : Vee Jay TsunaMiX

nonusersays:

new business models

Back in the day “TV Guide” was a hugely profitable business, perhaps more so than some of the networks whose programs it covered. In the Internet era, first Yahoo and then Google borrowed that idea that providing the portal could be a better business than providing the content.

This bothers me some. Not that some folks are getting rich at providing content guides – of course, it makes perfect sense that great business opportunities are out there. But to say that the content that people ultimately want is itself worth practically nothing, except as a loss leader for a bundle of rather mundane goods and services – that seems contrary to the spirit of capitalism and Adam Smith’s invisible hand (OK, greed).

Not everyone is a fan of greedy capitalism in the arts, but it played a major role in the spectacular outpouring of innovative jazz and pop music in America (and later in the UK) throughout most of the previous century. I doubt Smith’s model was that the most talented and popular artists and craftspeople in society should be working their arses off to make the same money as everyone else, or perhaps a little more.

Re: Is his book free?

If a Gentlemen is working on a book about free, should we expect the great irony of him charging for it?

Uh, no. If you understand the point of the book, you realize that it’s not about how everything should be free, but that some things should be free. There’s no irony here.

Ideally he should put it online to show a much better grasp of the situation than just releasing it via paperback exclusively. It would be great to give a copy to many libraries for free.

However, yes, he has made it clear that he will be making copies available for free in some manner, so there won’t even be the irony you think might be there.

Santiagosays:

Re: Is his book free?

The paperback will obviously not be free, but he can go the Paulo Coelho way. He encourages his fans to pirate his books, because if the content is interesting enough, after reading it on a screen you will probably go out and buy the paperback to keep, lend, annotate or whatever else you might want to do.
The craziest thing about this author is that he creates and uploads the torrents himself.
piratecoelho.wordpress.com

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