During SxSW Interactive 2008 recently, one word popped up over and over again as speakers and attendees alike talked about applications they’ve worked on or recommended to others.

The word was “free”, and it was used in a variety of ways:

“You should try AcmeWidgets—it’s free.”

“AcmeWidgets is a free web app you can use to process widgets.”

“I use AcmeWidgets—it’s free!”

They stressed the word free like it had the mystical power to entice anyone and everyone to drive over to the site and sign up. Like it was the most important word in the sentence.

Then Jason Fried (37signals) said something that contradicted them all. He said (and yes, I’m paraphrasing), “People always wonder how to monetize their apps, and the answer is to charge for them.”

The implication, of course, is that if something is valuable, people will pay for it. They’ll shell out a few hard-earned bucks each month to take advantage of something they find useful, advantageous, and effective. Something that improves their lives.

And Fried was right. But not about whether to charge for a service or give it away. Rather, he was right that the price of an application is much less important than another, much more meaningful word:

Value.

The value of an application or service is what draws people in. It’s what keeps them there. It’s what they seek, and it’s what causes them to make the decision to use the application in the first place. But in almost every case, the word free was used in lieu of even a half-hearted description of an application’s value.

When we talk about the products we’ve invested our blood, sweat, and tears into, or recommend another product to a friend or a room full of 300 geeky audience members, the focus shouldn’t be on how much something costs, but rather on its value.

When we rely completely on the power of free, we insult the listener and ourselves. Instead of believing our listeners will pay for something that has value, we assume they won’t. Instead of being proud of all the hard work we’ve done, we sell ourselves short and assume the only way someone will check it out is to give it away. Instead of touting the value of an application we love and use every day, we focus on its absent price tag.

But the truth is, everything has a price, and it’s often much higher than the one on the tag. The time it takes to get familiar with an application, the brain power we dedicate to learning its ins and outs, the cost of switching to another application should this one fail us—these things all contribute to the price.

If there’s value in doing so, we’ll get through it. And it doesn’t matter what the price tag says.

Focus on creating value. It makes the price worth every cent.

Over the past few months or so, many of you have started following me on Twitter, friended me on Facebook, and connected to me on Linked In. But I haven’t met too many of you in person, and I’d like to change that.

So if you’re headed to SxSW at the end of this week, stop by the Google Party at the Light Bar on Saturday evening, from 6pm-8pm, and let’s meet in person. Here are the details:

Google Party
Location: Light Bar (408 Congress Ave @ 4th St)
Time: Saturday, March 8th, from 6pm - 8pm

Obviously, I’m not hosting this event (and no, I don’t work for Google)—I just figured it’s a good spot to hang out and get to know each other. So I’m committing to it. I’ll be there.

Come on by and talk about design and usability and whatever else interests you. See you there!

Some self-indulgent link lines today:

I did this video podcast interview at the first Voices That Matter web design conference in San Francisco a few months, and it’s finally been posted.

I’m doing a book reading from the new book at SxSW Interactive, at 5pm on Friday, March 7th (yes, that’s this Friday).

Then I’m doing an “on-the-spot usability reviews” session at An Event Apart in New Orleans on April 25th.

I’m also speaking at the second Voices That Matter web design conference in June in Nashville, Tennessee, with many of your favorite authors, including Steve Krug (author of Don’t Make Me Think).

And then I’m doing two sessions and part of a keynote at Web on the Piste in New Zealand in August.

And finally, I’m back at An Event Apart for a repeat performance in Chicago in October.

I’ll be at two other events in May, but those have not yet been announced, so details will have to wait. Beyond that, it looks like I’m traveling about once a month. If you would like me to speak at an event this year, I have a couple of open slots, in September, November, and December (July is reserved for a vacation). Contact me here!