When comedian Louis C.K. decided to produce his own event and sell video of it to consumers directly online for $5, little did he know that his experiment would spark a trend. But then again, little did he know that his experiment would produce hundreds of thousands of dollars in profit in a matter of days.
Louis C.K.'s ability to profit significantly while retaining creative control over his event, ownership of his content and the relationships with his fans is, not surprisingly, of interest to other established comedians.
One of them, Jim Gaffigan, was so inspired by the "the brilliant Louis C.K." that he plans to copy his colleague's blueprint by selling an upcoming special, Jim Gaffigan: Mr. Universe, for $5 through his website.
That got a couple of entrepreneurs thinking: "If Louis C.K. had to pay $35,000 to build his website, why don't we offer to build Jim Gaffigan's for free in exchange for a cut of the revenue?" Those entrepreneurs, Gareth Macleod, a former Facebook engineer, and Ross Robinson, decided it was worth a shot and launched a site, dearjimgaffigan.com.
That website contains a letter to Jim, which reads in part:
We love that you're pulling a Louis C.K. We'd like to make the website for Mr. Universe for free.
We’re a start-up taking the Louis C.K. model mainstream. We handle the website, payment, movie player, and some sexy social media integrations, for free.
Louis paid $35k for the “Live at the Beacon Theatre” website.
Jim, you can pay $0*.
The asterisk: "You could easily bankrupt us in bandwidth fees when millions of people stream your show. We'll have to take about 5% of each transaction just to keep the site running!"
While Macleod and Robinson deserve some credit for having the chutzpa to publicly reach out to Gaffigan, not surprisingly their pitch to Gaffigan has found more criticism than support.
The most obvious reason for criticism is a good one: the duo's "free" offer doesn't make much financial sense for Gaffigan, an established, popular comedian. While we don't know if his experiment will be as successful as Louis C.K.'s, it's not unreasonable to assume that Gaffigan will do well. As such, it's hard to see the wisdom in giving a couple of entrepreneurs (or would-be opportunists depending on your perspective) a piece of the action to avoid paying someone up-front to develop a website. Hence the criticism of Macleod and Robinson's efforts.
The lesson here for all entrepreneurs: sometimes "free" sucks. In this case, it's just a ploy to strike a revenue sharing deal. But that doesn't make sense for the target customer; it only makes sense for the entrepreneurs who know that they're taking on little to no risk in providing services up-front at their cost.
Obviously, free doesn't always suck. But savvy entrepreneurs shouldn't be unrealistic or greedy: when taking on cost on the front front end in exchange for a benefit on the back end, the front end costs realistically need to be high, if not entirely unpalpable, for the individual giving up the rewards on the back end. If they're not, "free" is not only a tough sale, it's downright unattractive.