Questions

What is the most optimal way to model your business launch in 2015 for rapid customer acquisition? My startup has a 3 plan subscription model. It has privacy features with organizing and a bit of storage features. I'm concerned a free version might devalue the product value perception. Yet, in not offering a free version I turn away those without credit cards, lower user reach/market share. Also, it seems investors don't like it. Famous words of Mr. Cuban “You live by free. You die by free.” Is that still the case in 2015? My indirect competitors offer a free version with a paid upgrade. I offer some features they dont offer as I'm targeting a 'slighly' different audience.

* What is the customer RoI?
* How much do they save/earn per unit of use of your product/tool/service?
* How many users do you have right now?
* Are the free users likely to upgrade?
* Are they needed to provide a different value (community, content, network, ...) to the paid users?
* Are the free users providing an increased SEO or other lead gen surface area for you? A la widget with your link on their site which steers traffic and link-juice your way?
* Is your different audience better paying, more mature, in-a-tearing-hurry, or is it the lower end of the market?

There is no easy answer to your question. It will depend on many many factors. But the questions above should help you think through and choose an option.

I've used my own custom frameworks in the past to help many hard tech founders with similar questions.
If you want to go deeper, will be happy to do so over a call.

Refs:
https://davidjaxon.wordpress.com/2015/07/21/the-contrarian-view-with-freemium-its-easier-to-start-with-the-paid-product/
http://sixteenventures.com/freemium-or-free-trial


Answered 6 years ago

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