I think the real parts in these stories are -<p>1. Have free plan to pick up 10x more users (and gain more traction, exposure, feedback, etc).<p>2. When the time is right, remove free plan to convert some of those users.<p>The rest is just b.s. to justify a perfectly good strategy to those free users and the rest of the market. Which is b.s. in itself (...thinking you have to justify it with b.s.).<p>But it was so well done here that you kind of have to admire it.<p>Gaining H.N. exposure for a day, and getting picked up on some other sites is also not too bad.
Really good points, Nikos.<p>At Huddle we faced this issue a few years ago and ended up dropping our free package. Especially for businesses, there's often just no point in trying to support free users. In the long run, everybody has done better for it.<p>There is one type of user you might not have considered yet, though: Charities.<p>We started the Huddle Foundation [0], which provides free accounts to Non-Profits, for up to 25 users. They get all the standard features that Huddle provides (in other words, everything except advanced customisation which is really just visual stuff). We do it through a company called TechSoup.<p>I recommend you look into something like this, because most charities really don't need to be spending money on stuff like this. It's better and more useful for them if they stick with one platform instead of hopping from one to the other to the other as free trials run out. You'd probably be a hero in many charity recruiters' eyes :)<p>[0]: <a href="http://www.huddle.com/foundation/" rel="nofollow">http://www.huddle.com/foundation/</a>
[1]: <a href="http://www.techsoup.org/" rel="nofollow">http://www.techsoup.org/</a>
Free plans tend to be cancerous. Users who subscribe to free plans are usually 90% of your support requests. The customers who actually see value in what you do tend to not only be the best to work with, but also tend to foster mutual win relationships. As has been stated, it's also a good filter for getting users you're solving a real pain for.<p>Edit: Since what I said appears to be a bit controversial, maybe I need to clarify a bit. Free plans are great for getting users initially and to test a product, but there are serious tradeoffs to consider if you're looking to get revenue. Not every business is built on top of the idea of accumulating users ---> raise VC ----> exit.<p>For most people who want to build a business with even just modest revenues and stay bootstrapped, paying users really are your best bet, since it proves value in what you're doing. People only have finite resources, so it might as well be spent on people who value your services enough to pay for them.
Some excellent points in this! My current startup will not have a free tier at all for this reason, but it will have an open source core (despite being built from the ground up aside from some MIT licensed libraries) -- I think this is a great compromise. Techies that have more free time than cash (I fit into this niche a few years back) can often be your greatest evangelists, and the friction of running your own server for it keeps a lot of the low-value customers out.<p>Thoughts about that strategy?
I think your prices are too low. $19/month for a job? Recruiters make e.g. $20,000 for a placement. Who are you selling to? I am just so skeptical of $19/month, can it really be providing value?
<p><pre><code> It forces an honest decision. Will I really get value out of this product,
enough to justify paying for it? If someone is not getting $19 worth of value out of Workable,
then we’re not solving a real problem they have.
</code></pre>
This is one of my favorite reasons to charge for a product. It's a service to the people who decide to not use your product because it helps them reduce their app clutter. Some people will sign up for things because they are free.
Good points, but the reason behind having a free tier is not to offer a good experience for free, but to eliminate the initial friction of using a payment mechanism so that a user can actually try a product before committing to it.
I don't have a free plan, but I offer a very generous reward for referring new customers. Some people may in fact never pay me or they may pay me but receive more money back from me.<p>* Everyone starts with 5 free transactions and test transactions do not count.<p>* If they were referred to me, they get an additional 5 transactions for free.<p>* After they use up those 10 total initial transactions and pay for credits, the original referrer gets 5 transactions for free, once, and 20% of what the person they referred paid me. This referral arrangement continues for a long time.<p>* I integrate the product into every customer's website for free to eliminate the friction of them not knowing how to do it. It's much easier to do a quick remote login than to educate customers how to do it.<p>* You can sign up to use my product by SMS. No credit cards required.<p>* I don't prevent a customer from using the product when they have zero credits. They simply don't get the product until they pay. However, I never change the end user experience.<p>* I don't charge a monthly fee and I don't charge for maintaining a mobile landing page, for which competitors charge.<p>For many customers, that initial 10 free transactions is all they will ever need. My technology quietly sits on their website and credits them for their passive referrals for clicks on my widget.<p>Due to the nature of my product, charging a monthly fee does not make much sense. The usage spikes and is difficult to predict. It made more sense to charge per transaction.<p>I am not sure I agree with the statement that you will not find evangelists among your free users. I don't pay for Apigee, Appery, Salesforce or BizSpark. I pay a modest amount to Twilio. I will talk your ear off about how great these and many other companies are.
I don't get it: <a href="http://workable.com/" rel="nofollow">http://workable.com/</a> & <a href="http://workable.com/signup" rel="nofollow">http://workable.com/signup</a><p>Have you not deployed it or just reverted?
Excellent points and I agree with pretty much everything being said. One niggling question however is how to introduce people to the product? typically this involves a limited trial. The limited-trial version ends up having the same issues as the freemium one.<p>You still have to support non-paying trial users, you still need to think about features which go on paid vs. trial plans. Then the only difference becomes the <i>volume</i> of users? Or do you think people have fundamentally different expectations from a trial than from a freemium product?
I keep seeing this article or variations on it over and over. The question I have is, "Why did they <i>ever</i> have a free version?" Why does DropBox have a free tier? GMail? Why do Canonical, Red Hat and SUSE give away thousands of QA person-hours and more thousands of server hours on community Linux distros? Why are the complicated pieces of software that are browsers mostly free?
I remember Patio11 (Patrick McKenzie) made similar claim on this: charge the customer, and in fact, don't afraid to charge more. If my memory is right he talked about this in a conference, but too bad I don't have the link handy. If any of you can share, it will be great.
There can be advantages to have a limited free plan. I offer limited free plans for 2 main reasons:<p>* users can make sure they like the service before paying for it. This avoids costly refunds<p>* users can integrate our API and doing tests without having to pay for it. It makes for a better experience, as they don't feel they are paying for missing documentation or limited libraries.<p>If you make the free plan useful as a trial, this can be a win-win. With my service, I see people using the free plan as a trial only: after a few days they pay for it, or they stop using the service.<p>I also use my free users for posting Tweets and other social sharing.
The thing about free plan is that most of the users are freebie seekers and have no intention of getting an upgrade. And talking about B2B, if companies can't afford $19/m, then they shouldn't be in business.
Another factor that you should address is competition. If your market offers a free product you cannot afford to have a pay only product. Examples include free products like radio streaming, email, or even online taxes.