Time has an article on how four hackers almost caused the collapse of the entertainment industry. Many gems of insight in there, particularly how iTunes managed to succeed despite the availability of free music/movies on Napster, Bittorrent etc.
It turns out that there is something that can compete with free: easy.
Free is not an automatic choice if there is a cognitive cost or inconvenience attached to it. And easy by contrast is difficult to design and engineer.
The route to be taken will depend on the market you are in and the environment that you are trying to operate within.
In hindsight its interesting to note that all of them have gained immensely from the experience of executing their idea, though not necessarily on the monetary front. And they did not set off thinking to disrupt anything, they just wanted to have some fun and try out things. The tectonic effects within the entertainment industry was just a by-product.
Lessons for entrepreneurs who will end up disrupting an incumbent’s lunch.
Via John Gruber.