You Cant Have One! The Art Of False Scarcity


Its a good one. Its called False Scarcity.

When goods are free and widely available to everyone without constraints. do we really want them? Probably not as much as if were convinced that they are rare and have to go through a guarded gate before we can put our hands on them.

Reverse psychology, play on vain egosits very effective if you can pull it off, since economics teach us that only things that are rare have value.


In the last two weeks, over 10 million geeks have rushed into Google+, the new social network everybody talks about (at least, on Google+). How did it reach such blockbuster proportions in such a small time? By framing a full scale launch as a field beta.

Its not open to the public yet! Its still being tweaked! its private people, you need an invite!

OK. Whatever you say Google, but last time I checked, 10 million users is on the higher side of typical testing requirements. By these standards, Foursquare too is still in field beta! Fact is getting an invite was as easy as just asking for one, directly on the site or through your networks (I got mine after 15 minutes asking around on Twitter).

Did they need to limit users? Come on, its Google they know how to scale servers, dont they?
Of course, it was a launch tactic designed to make G+ look cooler, and insulate Google against any risk of public failure. Reach a big number, its a success; fail, and it was just the beta phase, move along, nothing to see. Meanwhile they made every new sign-up feel like a privilege, they oversignified the early adopter status of the first members and made every geek around join proudly from the get-go.


The European music business is using a similar tactic this week, in their attempt to conquer the US.
In case youve missed the headlines, Spotify is a streaming service which lets you listen to any music, for free on your computer, or on your mobile for a monthly subscription fee. All my friends in Paris, London and Stockholm swear by it, for good reasons.

In any freemium model, you want to get as many people as possible to sign up for the free version to build awareness and trial, and then get hooked users to upgrade to the premium service. You make the free version widely available, and the premium one scarce. Spotify did the reverse, partnering with the influencers-scoring company Klout.

While anyone can already sign up for premium, the free version is invite-only for now and the main gateway to an invite is your Klout score. Reach Klouts secret conditions for the perk, and you qualify for a free Spotify account plus 5 invites for your friends (note to readers Ill happily give mine to the best commenters!)

Does Spotify have to be scarce? Come on, lets be serious their challenge is to stand-out in a competitive market that is far from the Blue Ocean they came from in Europe and their big bet is to make you want an account because you cant get one (must be great, no?). Note also the great tactic for Joe Fernandezs Klout the perk is a great way to boost awareness and subscription to his own service. Win-win.


Time will tell. Google+ will be judged by its ability to attract more than the geeks and social media addicts, and keep them participating; Spotify will be judged on how much revenues it drives from premium services and advertising, not just on how many people line up for a free account. So its very early.

But something has to be said for the noise and momentum created by the sense of scarcity they manufactured. They did not put a price tag on free, but they definitely created desire and value. Think about it is there something in your business that you could reframe as scarce and valuable?