How Free Changes Markets and Creates Winners—and Worries

When digital photography took over, free photo storage and editing tools flooded the market. A small startup built a loyal following by offering unlimited storage—completely free. Established companies, caught off guard, saw profits evaporate as users migrated en masse. Scrambling, some tried to match the free offering; others added advanced paid features like pro lighting tools or expert reviews, moving 'upstream' toward the new scarcity: expertise and curation.

Meanwhile, freelance photographers started giving away sample shots, posting how-to content, and providing portfolio critiques for free. But their paid gigs soon centered on specialized shoots, customized artwork, or personalized training—services the free platforms couldn't automate or commoditize. Value shifted from basic tools to bespoke experience, community, or reputation.

In business, when 'free' destabilizes a market, the most successful responses aren’t to compete at zero, but to pivot toward new scarcities: what remains hard, unique, or deeply valued. This principle, framed by Clayton Christensen’s ‘Law of Conservation of Attractive Profits,’ explains why companies must constantly reassess where value migrates as markets shift.

Take time this week to map out where 'free' is changing your corner of the world, whether that's software, education, art, or a side hustle. Notice which needs are newly met at no cost—and more importantly, what people now crave or pay for instead. Seek fresh opportunities: maybe it's custom advice, hands-on help, or a premium experience that makes you stand out beyond free offerings. Write down at least two possibilities and plan how to try one soon.