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Free to Cheap to Expensive

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“It’s all chips.”

Chris and I once used this phrase when keynoting at Affiliate Summit last year– it represented the idea that you need to buy-in to every game (like poker) with winnings from another table. As you move from one table to another, the competition gets tougher but you can also win big.

What follows is a basic analogy to help you understand how people begin to make a living from the web. Each table is defined by how well you get paid by it, and for each, you’ll need different kinds of chips.

The first table is easy to understand, and all of us know it well– free. The buy-in for this table is sweat equity, otherwise known as the Crush It method. Free helps you gather audience as long as you do something wild enough, or interesting enough, to get some micro-attention and develop an audience. Free helps you build the channel.

Once you have a powerful channel with a significant audience, you can use that as chips to join the next table in the media game: cheap. You do this to buy onto the next platform of credibility, make an ok living wage (depending on where you live), and free up your time from your job, if you still have one.

Expensive is the final table, and the table stakes is a significant amount of credibility. A huge or powerful audience is necessary, or significant enough credibility that you have become known for what you do. Once you have this you can make a decent or great living, enough to buy back your future time as well as your present (some people would call that a contingency fund).

This series of rounds is a cycle, where you can buy your way from free > cheap > expensive and then back to a different level of free (say, that most people can’t get into) which requires more credibility or access. There is also another table called debt, but I would urge you not to get into that since most of the time, what you really want to spend isn’t money, but time and effort. (Spending money is easy but spending time is hard, so it’s worth more.)

I don’t need to name examples, but you can easily take web household name and apply this model to them and find what table they’re at. Once you figure out which one applies to you, it’ll let you know where you need to be heading and what your gameplan should be.

In poker it’s safe to jump to higher stakes once you have 300 times the big bet. The same is true for any level of this game– if you jump too early you might not have the necessary amount to cover early losses and get wiped out. But I can’t decide this for you– you have to make your own mistakes.

* Filed by Julien at 7:49 am under random, systems


Hi, I’m Julien Smith. I'm the founder and CEO of Breather.

Check out more of my blog, my free book or add me on twitter. Also, we're hiring. Check that out.

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10 Responses to “Free to Cheap to Expensive”

  1. Vicki Lloyd Says:

    Your checkered background make this too hard to read.

  2. Julien Says:

    @Vicki — refresh. :)

  3. Rick Says:

    Maybe it’s your checkered past… naah, not that. :)

  4. Mike Lucas Says:

    Well said. It is very difficult to work a full time job to earn a living and work part time at was is fun, but not profitable, yet.

  5. sandy mackay Says:

    It’s the challenge that artists face as they try to build full time arts jobs for themselves, weaning away from the “real job” as they build their skills and capacity to make the leap to “professional artist”. Leaping the chasm, or as some say, jumping off the cliff.

  6. CT Moore Says:

    From free to cheap to expensive. You sound like a pusher ;)

  7. Steve Brogan Says:

    I like your analogy. Sounds like a plan!

  8. @alanrae Says:

    That’s a really useful way of looking at it.

    The only important thing in business is to manage the downside risk so you don’t get wiped out. Taleb discusses this in depth in his books Black Swan and Fooled by Randomness.

    The art is knowing when you’re ready to change tables….

    keep up the good work

  9. Scott Ellis Says:

    Julien –

    Great analogy here. It definitely helps to illustrate that most of what we do is, in some way, a process or has stages. So many people (myself included) want to jump to the end without “earning” our way, but those stages help accomplish a couple of things:

    1) Establish a foundation from which to actually build something sustainable
    2) Make mistakes & learn lessons at lower levels which are less likely to be catastrophic to your future
    3) Defining the process by which we can operate at a higher level

    I’ll definitely use/refer to this in an upcoming post.

  10. DianeDP Says:

    I love your analogy, especially as my 10, 11 and 13 year old have been very adept at poker. This advises me two ways: (1) keep my blog free, we are still at stage 1 – but you can check it out at http://www.mojo40.com , and (2) make sure that my kids stay away from the higher stakes table, out of childish bravado! Thanks for the innovative post!

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