Going Freemium: One Year Later

I use MailChimp for free right now but I can't wait until my list is big enough for me to start having to pay them. It'll mean that I have enough subscribers to actually monetize the list. At that point, I'll be more than happy to give them my credit card.<p>This is in contrast with Evernote and Dropbox, both of which I use for free but neither of which I plan of paying for in the future. They work well enough for my needs, and if I grow out of them, I'll probably just either cut back on my use or try to find another solution. Maybe that makes me a freeloader or cheapskate, but I imagine I'm not alone.<p>So, at least in my case, Freemium works best for products that either directly or indirectly contribute to making money.

Profit up 650% in a year. Remind anyone of this the next time they start talking about particular business types having patent on rapid growth.

This is an amazing post. I've been at it for 7 years at FreshBooks...experience tells me patience is more valuable than most people building start ups want to believe.

I like MailChimp a lot but always dislike the "monkey" talk. Chimps are apes, not monkeys.

Interesting.<p>I just flipped the free plan back on over at: <a href="http://goodgecko.com" rel="nofollow">http://goodgecko.com</a><p>I'll write more about this on my blog soon, but in a nutshell my reasons were thus:<p>1) It helps mitigate some marketing costs<p>2) I'd also rather the user tries out my app rather than the competition's :)<p>3) It shifts the focus of development slightly. I noticed that with the Free Trial (that kicks into paid after 15 days) I was so focused on feeding visitors through the funnel that all my time was being spent on the sales funnel; building a nice sales site, setting up A/B tests, worrying about my pricing etc. Changing to Freemium yesterday, I immediately got a bunch of signups and my mind started focusing on the app again. The onus is now on the app to be as awesome as possible in both free and paid versions. It's exposed to more people. I think this is a better long-term situation as it will help me focus on the right things, not just short-term funneling people into a Free Trial to make $$$.

Great to read about success the "hard way" -- over the long term, and without using free as a "hook" to bring in the initial users. And despite taking a slow and patient route overall, they would have failed faster (if the idea crashed) than if they had have gone freemium from the beginning.

Great article that provides invaluable insights into Mailchimp's experience with the freemium business model. We are using a freemium model with Domainer Income (<a href="http://www.domainerincome.com" rel="nofollow">http://www.domainerincome.com</a>). Now, we are still in the throes of improving many aspects of the site and conversion funnel, etc but with regard to the freemium model itself, it occurs to me that we have - and anyone deploying a freemium model has - quite a few variables to play around with that will impact the 10:1 ratio as well as overall conversions, sales, profits, renewals, etc. For example, my experience and observations suggest that you really need to provide overwhelming value in the paid version to get people to upgrade. 'A little bit better' won't cut it. Also, you can experiment with the actual free/paid service you provide. One thing we're about to do is give everyone who signs up for a free membership a trial of the premium service before they are 'dropped' back to the free account. These are just two examples. On the other hand, having said this, I am also developing a theory that you really have three target markets: freebie users who will never upgrade, paid users who want the value-added services of the paid version, and a group in between that will upgrade if they perceive enough value in doing so. How big is the middle group, what will it take to convince them to upgrade, is it cost-effective to try to persuade them? These are all fascinating questions!

I think there good business in helping other people make money, or at least attempt to make money.

One thing I don't see people talking about is utilizing donations while bootstrapping. The article correctly mentions that you need income (that 10%) to pay the bills in order to develop a badass product. Donations can give you that, as well as social proof that your idea is worth the potential act of paying for it. Meaning, donors don't "receive" anything (subjective, I know), but are still willing to support your great idea.

One of my favorite services, up there with Dropbox and Xmarks (which is now shutting down).<p>Slightly off topic to Ben's post but did MailChimp ever raise financing?

Congratulations on your success and hardwork.

Impressive.