4 ms·

Obviously it depends on what you're offering, but for a generic model i'd suggest a monthly freemium model - Max traction on launch with regular passive income

Obviously it depends on what you're offering, but for a generic model i'd suggest a monthly freemium model - Max traction on launch with regular passive income in the future.

sw1205 16y ago
Yes that sounds the way to go - see above for the type of site I am offering. You are right - freemium seems the buzz at the moment. I was even thinking of a novel payment model like Radiohead (the music band) have done in England whereby they have said the customer can pay what they like for the album. I thought of doing something similar for my site - pay what you want for an account, it's risky but it is quite niche and could gain me some attention.
- michael_dorfman 16y ago
  "Pay what you like" is a terrible business model for most applications. Remember that Radio had an established fan-base who was already sold on the quality of the product. If a previously unknown band had tried that, nobody would contribute before hearing the music-- and then, after hearing the music, I imagine only a very small percentage would remember to go back to contribute. As for freemium, there are significant drawback to that, too, that you need to keep in mind. First of all, you need to make sure that your "paid" version has enough added benefit that it will get users to actually convert. If not, you end up (in the best case) with traction but no revenue. In the worst case, you end up with a lot of very demanding users, placing a support burden on you, with no realistic hope of conversion. If you're not sure if support on your app scales, be careful offering a free version. In short: figure out what your product is worth to your customers, and charge for it. Don't be afraid to price it high, if it actually provides sufficient value. As Patrick already pointed out, recurring revenue is a god-send, so a subscription model is brilliant, if your product lends itself to that kind of purchase. Remember: the goal is to maximize LTV, and minimize CAC.

Obviously it depends on what you're offering, but for a generic model i'd suggest a monthly freemium model - Max traction on launch with regular passive income in the future.

sw1205 16y ago

Yes that sounds the way to go - see above for the type of site I am offering. You are right - freemium seems the buzz at the moment. I was even thinking of a novel payment model like Radiohead (the music band) have done in England whereby they have said the customer can pay what they like for the album. I thought of doing something similar for my site - pay what you want for an account, it's risky but it is quite niche and could gain me some attention.

michael_dorfman 16y ago
"Pay what you like" is a terrible business model for most applications. Remember that Radio had an established fan-base who was already sold on the quality of the product. If a previously unknown band had tried that, nobody would contribute before hearing the music-- and then, after hearing the music, I imagine only a very small percentage would remember to go back to contribute. As for freemium, there are significant drawback to that, too, that you need to keep in mind. First of all, you need to make sure that your "paid" version has enough added benefit that it will get users to actually convert. If not, you end up (in the best case) with traction but no revenue. In the worst case, you end up with a lot of very demanding users, placing a support burden on you, with no realistic hope of conversion. If you're not sure if support on your app scales, be careful offering a free version. In short: figure out what your product is worth to your customers, and charge for it. Don't be afraid to price it high, if it actually provides sufficient value. As Patrick already pointed out, recurring revenue is a god-send, so a subscription model is brilliant, if your product lends itself to that kind of purchase. Remember: the goal is to maximize LTV, and minimize CAC.