Because, and making money

I have always been fascinated by the 'Because Effect', a term coined by Doc Searls to denote how money is made because of something, rather directly from it. It's a vague concept with many, simply because we have been so tuned to the idea of making money from something, we never take our blinkers off and look around.

There are so many examples around here in Malaysia, but the idea has never been explored to it's full potential.

One is the TimeDotCom initiative to provide free internet at any Starbucks coffee place. The service is free, with a minor discomfort of having to register at their website and share a few personal details with them.

Some might argue that the service is not totally free, in the sense that you have to buy a coffee in order to access the service. That's the whole point. Two things essentially may happen in this equation.

Firstly, people who are looking for a 'cool' place to have premium coffee, and have a notebook computer, will be more likely to choose Starbucks simply because besides having the coffee, some useful internet time can be logged on.

Secondly, a person needing some internet time will probably go to Starbucks and use the free service, by purchasing some beverages (which goes well with internet surfing) and seating themselves to a comfortable surrounding. So Starbucks gain customers because they offer free internet at their premises.

What does TimeDotCom gain from all this? A lot.

The registration process is a valuable database for the organisation. I am not sure how they intend to use it, but as a lead generator alone, it makes giving out the free bandwidth worth it. TimeDotCom was awarded a 3G license, and all those people who signed up are practically in the market for affordable mobile internet, or at least internet in general. So they have a ready pool in the right market and with the right interest. When they do launch their product, this list of data will be invaluable towards kicking a faster rate of adoption.

I have to admit that TimeDotCom may have just stumbled into this strategy, and may not even realise it yet. I have it on good authority that the reason why their WiFi is free can simply be put to the reason that they do not have a billing engine behind it. At least that was the way it started. To start charging mid-stream may damage the brand, and the brand itself may not be so strong to begin with.

Still, it begs us to re-think how the 'Because Effect' may already exist in the things we do, and if so, how do we maximise it for revenue, and ultimately use it to create a strong value chain for our products and services.

Hugh from Gaping Void frequently talks about this, along with Seth Godin. Surf and see.