Why the “Free for All” Business Model Is Not Sustainable Or Beneficial for That Matter

We all like free stuff. I’m no different. However, I draw the line when it comes to educational services, particularly those that use that as their basic business model. I'd go so far as to say that there is no such thing as truly free anywhere on the web unless that person or organization providing the free stuff does so as an act of charity.

Charity is great, which is why I've been donating to all sorts of charities over the years. Charity is a sign of a civilized society and one that has a set of grounded moral values. Still, that's not to say that every charity out there is good or that it's effective in its mission. Also, organizations that are under the legal status of a charity may be malicious. In other words, we need to be careful when it comes to charities nowadays and exercise discernment before donating any money or time to them.

What does all this have to do with business? Everything. An organization that is geared towards making a profit cannot be a charity. Of course, some organizations don't care about profits and are there to provide a service to the world, out of the goodness of their hearts. I do not doubt that the people behind them are idealists and for them, work is a labor of love. However, these organizations are seldom related to educational endeavors (or if they do, there may be hidden agendas under the veil). The reason is simple: the “free for all” attitude towards business just doesn’t work at a larger scale, unless it is in the short term or as a marketing strategy.

Let me break this down a bit. There are organizations (I wouldn’t call them companies since I have some respect for people of business) that offer things for free, hoping that others will donate to them and therefore make ends meet. This same strategy may be adopted by individuals too, particularly newcomers to a field. There is no shame in that. However, expecting others to pay you as a donation is shady at best and downright illegal at worst. If you receive money as a donation this is usually tax-exempt (for the particulars of this type of revenue in your country you may want to consult an accountant).

In other words, there is no tax in any income you get from a donation, which is why the aforementioned organizations love them. Also, in many cases, you don't even need to set up a monetary gateway like stripe or PayPal for business. You can just receive the money directly to your bank account or an online payment system like the free version of PayPal. Hell, you can even receive the money via crypto and no one is the wiser!

But what is a small donation here and there compared to all the good you do? Well, there is a big difference between a paid service and a free one: quality standards. I can go ahead and publish a book on my own (thank you Amazon and other online publishers for this option!). This way, I can get my name out there and not have to deal with all the red tape of a publishing company or the extra work they require. There is no doubt that it's not easy to do a book properly through a publisher, no matter how good you are as a writer or a professional in that subject matter. However, all this extra work you put as an author (a writer who is published through a rigorous publication process) pays off in terms of quality. Your book may not be perfect but it's much much better than a book you'd write on your own, even if you pay someone to do some editing and formatting for you before you release your book to the public.

When it comes to organizations the quality matter is magnified significantly. Think of various online “educational” organizations like X and Y (to avoid legal liability I’ll refrain from mentioning specifics here but you can insert there your own examples, something that a quick tour around a certain video hosting site can facilitate greatly). Do you think they have the same quality standards as someone who gets paid for what they provide, be it a service or a product? Or do they just release something to please whatever AI-based algorithm they aim to satisfy, to get their video or online course widely available and cash in on the ad revenue? Do you think they care about feedback? I'm not saying that every paid educational company is a saint but at least they listen to their customers and do some research before they release a new course and market it to the public.

Recently I read about a certain “free” educational organization that was bluntly asking for donations since their servers were working 2.5 times more than they normally did, due to the Covid-19 situation. I find such a request lacking both in dignity and foresight. If the people behind this initiative had any dignity and respect for their services they'd charge for them in the first place. Also, if they were planning to scale up their services at one point, they'd have planned for this eventuality accordingly, through a flexible cloud service for example or through the investment of an in-house server cluster. Make no mistake: the technology to make this happen is available, which is more than I can say for their business acumen.

I’m not saying that every work endeavor should be tied to a for-profit organization and that anyone who offers something for free is light-minded. However, it’s important to be clear about what you want and communicate that to your audience accordingly, especially if you are an organization that aims to help educate other people. Such an approach may be challenging but in the long run, it's better both for you and for your clients. Cheers!