4 ms·

"Rule #5: Don’t do freemium" Isn't CrankWheel, the author's company, a freemium product? "Free forever for limited use. No credit card needed" What experienc

"Rule #5: Don’t do freemium" Isn't CrankWheel, the author's company, a freemium product? "Free forever for limited use. No credit card needed" What experience does the author have with SaaS products that have no free tier? I stopped reading here.

joisig 7y ago
My company operates on a freemium model. It's a big hassle, as documented in the section about not doing freemium, but it's also something we decided was fundamental to our main distribution channel which is the Chrome Web Store (breaking another of the rules in the article - but maybe check the last section). I haven't run a non-freemium SaaS company, but I do see what benefits it would bring if we were able to operate on a typical 14 or 30-day trial model. The big ones that would bring are a much shorter sales pipeline and shorter feedback loop on ad spend.
- adz_6891 7y ago
  Thanks for the clarification here! Since you are using freemium at the moment do you have some way of quantifying the hassle that this decision has created? It would be interesting to know more about how you navigate this kind of tradeoff since this is really what matters when it comes to detemerning whether a decision like freemium vs no-freemium is actually a good decision
  - joisig 7y ago
    There's some operational cost (for running servers and such), but not that high. There's considerable customer support cost. The main thing that I feel makes life tough is that the pipeline from, say, doing some paid ads and seeing the results is several months long, and the feedback loop on changes that can affect conversion rates and monetization is similarly very long. We've learned to cope with it but it would be nice to have a one-month feedback loop or shorter.
    - adz_6891 7y ago
      Thanks for sharing! Seeking a shorter feedback loop makes total sense.
fxtentacle 7y ago
I was also surprised there. Lucky for us, the author is here on HackerNews, so let's hope we'll get a reply.
deleted 7y ago
[deleted]
harel 7y ago
It's a shame because if you kept reading you'd have reached the disclaimer that he has broken (and still does) all of the above rules. I think this list is sound. In my world, rules that are not able to be break when needed are not worth having.
deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
hinkley 7y ago
One of the nasty things with pricing structures is that they are difficult to take back. Look at the grief Netflix got for raising their rates by a dollar, and then when they did it again. Similarly, a B2B startup I worked for chased the biggest customers in the vertical, while our product was still pretty bad. You think they’re going to pay more once the feature set improves? Only if you split the product in two (which is a pain for use developers). They weren’t trying to maximize revenue. In fact they basically guaranteed they never could. They were trying to maximize prestige so they could sell the company, and therefore us.

joisig 7y ago

My company operates on a freemium model. It's a big hassle, as documented in the section about not doing freemium, but it's also something we decided was fundamental to our main distribution channel which is the Chrome Web Store (breaking another of the rules in the article - but maybe check the last section). I haven't run a non-freemium SaaS company, but I do see what benefits it would bring if we were able to operate on a typical 14 or 30-day trial model. The big ones that would bring are a much shorter sales pipeline and shorter feedback loop on ad spend.

adz_6891 7y ago
Thanks for the clarification here! Since you are using freemium at the moment do you have some way of quantifying the hassle that this decision has created? It would be interesting to know more about how you navigate this kind of tradeoff since this is really what matters when it comes to detemerning whether a decision like freemium vs no-freemium is actually a good decision
- joisig 7y ago
  There's some operational cost (for running servers and such), but not that high. There's considerable customer support cost. The main thing that I feel makes life tough is that the pipeline from, say, doing some paid ads and seeing the results is several months long, and the feedback loop on changes that can affect conversion rates and monetization is similarly very long. We've learned to cope with it but it would be nice to have a one-month feedback loop or shorter.
  - adz_6891 7y ago
    Thanks for sharing! Seeking a shorter feedback loop makes total sense.

fxtentacle 7y ago

I was also surprised there. Lucky for us, the author is here on HackerNews, so let's hope we'll get a reply.

deleted 7y ago

[deleted]

harel 7y ago

It's a shame because if you kept reading you'd have reached the disclaimer that he has broken (and still does) all of the above rules. I think this list is sound. In my world, rules that are not able to be break when needed are not worth having.

deleted 7y ago

[deleted]

deleted 7y ago

[deleted]

hinkley 7y ago

One of the nasty things with pricing structures is that they are difficult to take back. Look at the grief Netflix got for raising their rates by a dollar, and then when they did it again. Similarly, a B2B startup I worked for chased the biggest customers in the vertical, while our product was still pretty bad. You think they’re going to pay more once the feature set improves? Only if you split the product in two (which is a pain for use developers). They weren’t trying to maximize revenue. In fact they basically guaranteed they never could. They were trying to maximize prestige so they could sell the company, and therefore us.