The Craziest Business Model Ever

From time to time I run into a discussion with people outside the tech-sphere, who don’t see why Google or Facebook (“companies that don’t produce anything real”) are valuable companies. They see how more traditional models like newspapers could work, but Google?

One thing I found effective to turn their view of the world upside down is the following story.

Imagine we had a vision: We wanted to make money by exposing people to advertising in their homes. In order to do that we’d need to build ad-display-machines. They would have a screen and would sit directly in people’s living rooms. It would be difficult because we first needed some sort of distribution infrastructure like cables or transmitters. But we’d also have another problem: Why on earth would anyone want to buy an ad-box, put it in their living room and sometimes switch it on? Our solution would be this: We produce videos and buy movies to show on our ad-boxes to incentivize people to switch it on. We would though have to interrupt every video with ads to maximize the audience’s ad-exposure and thus crushing every enjoyment people could get from the content.

When I think of TV that way, it sounds completely insane.

Granted, I simplified and got polemic but what a powerful tool to relativize the current state! Thinking about building the status quo from scratch, it never sounds likelier than new ideas.

(Do try this at home. Start with cars driven by human non-professional drivers or with religion as a way to explain the unknown…)

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