The Curve is a new way of doing business and of seeing the world.
For most of the last century, companies strived to sell more and more products at uniform prices. But the future of business is about variation: tailoring products for customers of all stripes, and letting your biggest fans spend as much as they like on things they value.
The Curve shows us not to be afraid of giving some things away for free. The internet helps you forge direct relationships with a vast global audience, and take them on a journey from freeloaders into superfans. Value lies in how you make people feel, by building communities, bespoke products and experiences. Small numbers of high spenders are enough to fuel a profitable business.
In games, free is becoming the norm, but some people now spend hundreds or thousands of dollars playing a single game. You can already see the Curve transforming areas like music, books and film, and it will rapidly spread to the physical world as 3D printing becomes reality.
With stories drawn from artists, toymakers, sports, food, manufacturing and more, The Curve is nothing short of a business thinking revolution.
'An astute and perceptive guide to the new rules for making money in a radically disrupted internet economy. This book deserves to be a hit' -David Rowan, editor, WIRED
Nicholas Lovell is an author and consultant who helps companies embrace the transformative power of the internet. His blog, GAMESbrief, is read by those seeking to learn how digital is transforming gaming - and how to apply that knowledge to other industries. His clients have included Firefly, nDreams and Square Enix (creators of Tomb Raider), as well as Channel 4 and IPC Media. His articles have appeared in TechCrunch, Wired, and the Wall Street Journal. He lives in London.
There are millions of potential customers in the world. Most of them won’t pay anything for your product. But some will pay almost anything. The
challenge is to find the latter without wasting time and money on the former.
In The Curve, Nicholas Lovell weaves together stories from disparate industries to show how smart companies are solving this puzzle. From video games to pop music to model trains, the Internet helps businesses forge direct relationships with a vast global audience by building communities and offering bespoke products and experiences.
Nine Inch Nails front man Trent Reznor gave away his album for free to find the 2,500 hardcore fans who wanted the $300 limited ultradeluxe edition.Bigpoint, an independent game developer, released three adventure games to 130 million users—and made 80 percent of its $80 million revenue from just 23,000 users, who spent money to upgrade their game-playing arsenal.King Arthur Flour shares useful recipes and tips on its Web site, enchanting a cult of devoted bakers, many of whom happily travel to its Vermont headquarters for expensive specialty baking classes.
In many cases, businesses can win by sharing their product (or a version of their product) for free, allowing it to spread as widely as possible. Eventually, a huge number of freeloaders spread the word to the superfans who value that product the most. And a small number of superfans will love a product so much that they will spend substantial sums of money on it—given the chance. These high-value customers are enough to fuel a profitable business. For example:
This approach doesn’t apply just to digital products anymore. With the advent of 3D printing, customization of physical goods is easier and cheap, and companies can truly tailor their offerings to their customers. A doll company can personalize everything from hair color to eye shape, and automakers
and technicians can create laser-scanned replacement parts for classic cars. Although the potential for piracy will spread to industries that believed they were immune to such disruption, businesses have an opportunity to make money in this new paradigm by offering variety, complexity, and flexibility at little to no extra cost.
What Lovell calls the Curve is a ranking of your company’s potential customers from those most likely to least likely to pay for your product or service. It charts their interest against the amount they are prepared to spend—be it nothing at all or thousands of dollars. The curve itself separates your revenue
opportunity (willing big spenders, your superfans) on the left from your marketing opportunity (freeloaders, whose only acceptable price point is $0) on the right. The area under the curve is the total amount of money you might be able to get from your customers or fans.
Lovell offers a strategy to draw more people into your orbit than was possible when physical costs limited your ability to expand. The Curve heralds a new era of creativity and business freedom.
So how can you embrace free, while finding the superfans who will help you thrive? How can you make money in the Free world? Here are ten ideas to reshape your future. Welcome to the Curve.
Nicholas Lovell is an author and consultant who helps companies embrace the transformative power of the internet. His blog, GAMESbrief, is read by those seeking to learn how digital is transforming gaming - and how to apply that knowledge to other industries. His clients have included Atari, Firefly, nDreams and Square Enix (creators of Tomb Raider), as well as Channel 4 and IPC Media. He is a columnist for Gamasutra, a contributor to the Wall Street Journal, and his articles have appeared in TechCrunch andWired. He lives in London.