The Law of Digital Abundance

Welcome to the law of digital abundance, is your business prepared? Probably not.
Most businesses are set up according to 18th and 19th century work ideas.
We’ve all heard of Moore’s Law about computing power doubling every 18
months; of Metcalfe’s Law of the power of network growing exponentially
with every new user.

Welcome to The Law of Digital Abundance. Most of what we do in life is
based on scarcity. Limited land, water, resources. Look at the cost of
oil. Finite capacity. Or controlled markets, prices set by cartels,
whether oil or diamonds.

Companies price products based on supply and demand. Homes, cars,
services.

Everything about what we do, in fact, is based on scarcity.

Except when we operate in the digital environ. Digital environs are
based on abundance. Not scarcity. The problem is most businesses, even
in the digital world of the Web and mobile, price things according to scarcity.

Very, very few companies know how to address digital abundance. And just
when they do, they either sell to a larger company, putting abundance
under check, or they stop considering how deep the abundance is. Like
looking at a solar system and not seeing a galaxy potential.

Digital goods expand, not contract. In the old TV series Star Trek Captain Kirk
comes across the Tribbles which multiply amazingly fast.

For those of you who haven’t seen it, here’s a screen shot from the TV show:

Someday You'll Be Called Furbies And Make Billions $$$

Digital goods are like that, just think of a viral video or email your friends sent you.

Susan Boyle of the UK talent show comes to mind, she became a YouTube star overnight.

Susan Boyle's Swan Song

In offline goods, pricing and value is fundamentally derived as a result of scarcity.

Ask the owner of the beachfront home on Hawaii or Bora Bora. Airline seats are priced
according to number available. Unlike airline snacks which are priced on
how how salty sweet cardboard-like and how much BHT they can squeeze in. Potato chip, anyone?

Airline snacks aren't this good

But in a digital environ with basically unlimited storage, bandwidth,
information and access value is created as a result of the abundance but
not because of it.
In a digital environ abundance by itself is value-less.

Digital value is instead based on convenience. How quick, meaningful,
easy something is. Users downloaded 1 billion iPhone apps from Apple in just 9 months.

Often free or cheap, these apps are redefining digital values.

It's The Apps That Made Apple's iPhone A Hit

Companies hoping to compete in a digital era need to understand Digital
Abundance and how it changes their business.

Each digital copy is an original (not a copy). Pricing digital goods needs to be based
on taking advantage of the opportunity of scaling and distribution.

Instead of having one central source like Amazon.com you end up with 100,000 Amazon.coms,
100,000 Apple iTunes stores, 100,000 Alibabas, 100,000 Google Ad Senses and more. Ready to multiply?

What if these digital goods expanded unfettered?