The Unfair Advantage of Zero
How a free competitor forced us to build our greatest advantage, and how you can find yours.
The classic marketing 4Ps, a timeless framework developed by E. Jerome McCarthy, breaks down the marketing mix into four key pillars: Product (what you sell), Price (what it costs), Place (where you sell it), and Promotion (how you tell people about it). It’s a solid foundation for any business. But the real magic, the kind that creates legendary growth, happens when you get the cost of one of them down to zero. That is when you unlock a truly unfair advantage.
Let’s look at a few examples.
1. Product at Zero: HubSpot HubSpot built an empire by offering a free CRM. With the core product costing nothing, they obliterated the barrier to entry for small businesses. Their advantage was a massive, self-qualifying funnel. Once users were embedded in the free tool, upgrading to paid tiers became a natural next step. The “cost” was simply transferred to the user’s time and their eventual need for premium features.
2. Promotion at Zero: Dropbox Dropbox nailed zero-cost promotion with its referral program. Instead of paying for ads, they rewarded users with more free storage for inviting friends. Their users became their sales force. The advantage was explosive, organic growth fueled by trusted recommendations. The cost of marketing was transferred to their users, who did the work in exchange for a valuable product incentive.
3. Place at Zero: Stripe Stripe made payment processing accessible to any developer, anywhere, with just a few lines of code. They eliminated the “Place” barrier, which was once a maze of complex merchant accounts and bank negotiations. Their advantage was becoming the default infrastructure for a new generation of internet businesses. The “cost” is simply baked into their transaction fees, a model that scales perfectly with their customers’ success.
The Illusion of “Free”
But here’s what they don’t always tell you: nothing is truly free. The costs don’t just disappear; they get cleverly transferred. For HubSpot, the cost shifts to the user’s data and time. For Dropbox, it’s the user’s social capital. For Stripe, it’s a small slice of every transaction.
The genius isn’t in eliminating a cost, but in reframing who pays for it and how. Understanding this is critical, because sooner or later, every business has to face the challenge of ‘zero’, either as a weapon to wield or a threat to defend against.
Our Turn to Face Zero
At Engage AI, we had our own scary “zero” moment. Just two months after launch, copycats started popping up. Annoying, but expected. The real gut punch came when an indie hacker copied our product and launched it as a 100% free, open-source project.
That freaked me out. I knew first-hand how powerful “free” could be.
I had to counterattack. My answer was a reverse-trial freemium model. We would let users access core features, like AI-powered strategic commenting, for free, forever. The problem? It was early 2023, and the cost of LLM APIs from OpenAI was astronomical. As a bootstrapped company with no VC cash to burn, it was impossible. Thinking we could afford it was like imagining a bootstrapped Uber giving out free rides.
I handed this impossible task to my engineer, Li Voon Loke. After studying various apps, she came with a brilliant solution: a mechanic where anyone could use our Chrome extension for strategic commenting, but it would use the LLM tokens from their own OpenAI accounts.
Think about that. OpenAI and Sam Altman were now literally funding our user growth. Our freemium model became a reality without costing us a dime.
This newfound unfair advantage was a turning point. It helped us become the leader in our category. Because the tool was genuinely useful and free, influencers and users shared it widely. Our growth exploded to 20,000 users in just six months, all without spending a single dollar.
Looking back, I don’t think this kind of out-of-the-box thinking would have been possible if we had taken funding. It’s too easy to spend someone else’s money, instead of using your brain. When you’re forced into a corner, you’re forced to be creative and resourceful.
The Lessons
So, what are the key takeaways?
Always be resourceful. There is always a way out if you’re willing to think differently.
Hire intelligent people. A rockstar engineer like Li Voon will 100x your outcome.
Don’t trade intelligence for a fancy logo. Where someone worked matters far less than how they think and solve problems.
Now, It’s Your Turn: Find Your Zero
How can you apply this thinking to your business? Start by asking the right questions. Don’t just think about cutting costs; think about creatively transferring them.
Product: Can you offer a piece of your product for free that is genuinely useful on its own? A free tool, a calculator, or a template that solves a small but nagging problem for your ideal customer.
Price: Can you make your product free for one group of users by having another group subsidise the cost? Google mastered this. Search is free for the world because companies pay a premium to get in front of that massive audience.
Place: Where do your customers already spend their time? Instead of forcing them to come to you, can you bring your product to them? Think browser extensions, Slack apps, or integrations that embed your value directly into their workflow.
Promotion: How can you provide something of value that also serves as constant, free promotion? Coca-Cola gave branded refrigerators to small shops. This provided real utility to the shop owner while turning a store fixture into a permanent, perfectly placed advertisement.
The most innovative solutions often come from the tightest constraints. Look at your biggest costs not as liabilities, but as opportunities for radical thinking.
Find your zero, and you might just find your next breakthrough.