Shame, shame. I'm sitting at the SJC airport in the great Valley of Silicon and it does not breath free wireless. San Diego's commuter terminal is better (net = blazing free). But my cry for freedom is not about wireless connectivity but web-based software in general. I was recently at a meeting with an executive representative of a software vendor. After getting past the initial courtesies we hosed each other with differing views on pricing and value.

What triggered our tic-tac-toe was nothing dramatic, really. I wanted the software to get cheaper (real cheap) with a boatload of absurd new features. And he, naturally, not. The Internet world has spoilt me with so much free love that paying for anything seems sacrilegious (let alone a high monthly price). But not everyone can monitor what you are doing on the sly and run related ads to make money. So is there a different approach to pricing in the N=1 and R=G world where everyone wins?

To start with, pricing is a delicate matter but it has a universal rule: Value must be greater than price. Ever found yourself standing in line at Starbucks at some random airport? Any self-respecting coffee sipper will tell you that you are buying mediocre coffee. And we already know that it's overpriced. But the value -- be it wrapping your fingers around the Starbucks logo (which by the way evolved from a topless siren) in your hand or the consistent taste of un-Italian lattes or the glowing faces of the baristas garbed in black and green or the vague coffee-shop music (whatever you perceive as value) -- that value is greater than the pain of standing in line and paying extra for a near-empty, froth-filled cup of "tall" cappuccino. No one complains.

Let's look at two polar pricing models in the N=1, R=G globe. One is pay-per-use pricing and the other is what I'll call as mafia pricing.

The introductory pages of the book deal with pay-as-you-use truck tires -- not sold as a product but as a solution. You treat it nice, you pay less; you treat it rough, you pay more. Similarly, insurance for diabetics: You comply (exercise, test your numbers, swallow pills), you pay less; you don't comply (get fat, increase your numbers, spit out pills), pay more. Can this brick-world innovation be brought to software? Instead of a mere monthly subscription model, can there be an as-much-as-you-use approach to functionality and price?

The other approach to N=1, R=G life is mafia pricing. Think for a moment about the over-priced, over-marketed, over-sold iPhone. When you buy one, you aren't buying a stand-alone device but you are tapping into an ecosystem of vendors -- some free, some paid, some stupid, some nice (like family, see?).

My buddy in Redmond is prepared to chuck his clunky Windows-enabled device to view videos of his newborn on the sexy wide screen of the upcoming 3-G iPhone. He wants to connect to YouTube on the go and upload clips for his family to see. He wants it for music, writing on his blog, reading celebrity gossip and business newspapers, checking Google maps, playing games, chatting, and surely monologuing with his baby. As time passes, Apple will continue to expand its ecosystem. The iPod today is more like an iPhone minus the phone. As the R=G ecosystem widens, the value to the customer overwhelmingly expands and he stays in the family. Welcome to the Apple mafia!

Price is a non-issue in these examples. Why? Because the models somehow bring a degree of fairness to both buyer and seller. When a customer questions price, it signals a message deeper than money. It's a sign that the value is on the sitting end of the price-value see-saw. There was possibly value at the time of sale but that value stayed static while the rest of world twirled and whirled until the customer realized that, hey, the other guys are getting more for less. Several companies also think up Godfather pricing for their customer, where they play Don Corleone, pull out a gun and make an offer he can't refuse. But eventually, dons die too.