23 ms·

Don't Offer a Free Plan

• ChrisRR 6y ago
  Additionally I remember reading a comment on here that boiled down to: If you offer a free service, it'll be used to host spam, porn or other illegal activity
  • steve_adams_86 6y ago
    This is true for paid services too. My team is working to offer a service which allows people to create a feed of images, and we’re all fairly worried about what we’re going to see uploaded. We’ve all worked on social websites (including Facebook) and we’ve all seen what users are capable of uploading. One of our internal initiatives is improving our ability to find this stuff and remove it without having to actually engage and look at it regularly. Ugh. Offering any kind of storage at all, free or paid, comes with some risks.
• _adamb 6y ago
  I was hoping they would charge me a nickel to view the site...
• ineedasername 6y ago
  Trial periods just don't capture people the way a free plan does. I would never have transfered my task management to todoist if it was only a trial. It's a fair amount of effort to switch over a large chunks of how you function. I'm not going through that effort only to find out the product might be okay, but not enough to justify a subscription, at least not initially: Starting off often means you grow into using it more, more often, more features. A 30 day trial doesn't leave enough time for that. Then there's word of mouth: A free plan I use regularly will be much more top of mind when talking to others. Also bootstrapping: It's all well and good for an established SaaS business to not want a free plan, but plenty of products might never get to that point if they didn't bootstrap with a free plan first.
• soared 6y ago
  Most MBA programs go over why you don’t want a small number of high paying clients. It’s the opposite of diversification and is a risk factor. In the situation they claim as bad losing 1 clients means losing 10% of your revenue!
  • dan-robertson 6y ago
    I think this isn’t arguing that you should aim to have 10 (or 1!) high/paying clients, but rather that it is better to have 100 (or 1000) medium-paying clients than 10,000 (or 1,000,000) low-paying (or free) clients, because you are likely to underestimate the marginal cost of a single client, and at higher rates, this marginal cost is more significant. If you have 100 medium-paying clients then losing 1 is not such a big hit to revenue. If you have some kind of dynamic pricing, it seems reasonably likely that you’ll get a power law for how much clients pay, and you’ll be worried about the biggest client leaving even if you have lots of others.
  • lovemenot 6y ago
    Yeah, but that logic is really for the very small number of clients on a very high revenue per client. I think the example in the article used such low numbers to make the calculation easier. In most cases, the kind of SAAS they are talking about would have at least one or two orders of magnitude more users. Reshaping the question: would you rather have 50,000 users paying $1 or 1,000 paying $50 each? your MBA caveat largely becomes moot.
  • notimetorelax 6y ago
    Still it’s easier to support 10 users than a 100. Product may be simpler because of it.
    • leesalminen 6y ago
      It depends on which 10.
  • CodeWriter23 6y ago
    That’s only part of the picture though. Customer service is expensive, and I’m sure those MBA programs you speak of acquaint students with the practice of a cost:benefit analysis. I would also point out your logic about his revenue stream comparison falls apart when you double the numbers to 2,000 vs 20 customers.
• scrollaway 6y ago
  Since this headline is likely to have a decent amount of people reading comments and not the article, I just want to highlight their suggestion of a "lifetime try-out plan". It's a pretty original thought, I don't think I've ever seen a SaaS use that. I have seen trial plans with a small $ attached before though.
  • btinker 6y ago
    Though combining a paid "lifetime" plan with the deactivation of inactive accounts as the article suggests seems like a bad idea. That's deceptive in my book.
  • koheripbal 6y ago
    Plex Pass is like this.
    • scrollaway 6y ago
      No? Plex Pass has a lifetime plan (happy user of it here), not a "lifetime paid trial" plan.
  • thomasikzelf 6y ago
    Sublime text has this: "Sublime Text may be downloaded and evaluated for free, however a license must be purchased for continued use. There is currently no enforced time limit for the evaluation." https://www.sublimetext.com/3 https://www.sublimetext.com/3
• jakelazaroff 6y ago
  Alternately — if you have a free plan, make sure you get something out of it. My app SongRender [1] offers unlimited free videos, with the caveat that each of them has a small watermark in the corner. So if someone isn't paying me, they're helping me with marketing. [1] https://songrender.com https://songrender.com
• alsetmusic 6y ago
  Really makes me reflect on how offering free content destroyed the web via advertising. If only they’d got this message out 20+ years ago, maybe I wouldn’t hate so much of the internet.
  • hinkley 6y ago
    People tried. But the dotcom voices were louder. And drunker.
  • foxhop 6y ago
    Same here, I wrote about it in this essay over here: https://www.remarkbox.com/remarkbox-is-now-pay-what-you-can.html https://www.remarkbox.com/remarkbox-is-now-pay-what-you-can....
• projectileboy 6y ago
  This is a great movement, and I hope it gets some traction. A lot of damage has been caused by setting an expectation for software consumers that they should never have to pay for anything.
  • CodeWriter23 6y ago
    I agree, free has extremely devalued software. I think though, refactoring his idea, a “trial subscription” for whatever, 3, 6, 12 months at a sweet price with the option to continue at the regular price. I think author’s opinion about subscription fatigue is low-end market thinking or B2C. Most businesses actually making money are used to the subscription model now, Gsuite, Office 365, Adobe Creative Suite, NetSuite, etc. The trick there is to reduce the risk for them to try it on. Unless you want to pay an army of salespeople.
  • ahepp 6y ago
    I think the "free" attention economy is what pushes software developer compensation so high. So maybe it's true that it's damaged the wholesome place the internet could have been, but I doubt it's damaged you or me as producers of software. Consider the wages paid to tradespeople who make useful, non hyperscale products. Or even the salary differential between fields of computer work (web vs embedded, for example).
• deleted 6y ago
  [deleted]
• mmaunder 6y ago
  It is sad but true that users that pay less, or zero, are more demanding on customer support and make unreasonable demands via social. Had a guy this week using our free product that has 90% of the paid products features berating us on Twitter for not being 100% free and demanding we convert and rely on donations to support our 40 person team. Makes me regret having a free offering. In my 20 years doing software startups I’ve seen this over and over. Simply raising your prices, which we’ve raised to over 5x, dramatically reduces load on the CS team per dollar earned.
  • dataflow 6y ago
    My guess is part (not all) of this is due to people assuming that free offerings are already generating revenue in some fashion other than a direct payment (e.g., advertising for Google/Facebook), and thus they're still helping your business and entitled to support as much as anybody. Whether the assumption is right or wrong for each business, it's not hard to see how we've gotten here.
    • Strom 6y ago
      This is correct in my experience. It also cuts deeper than just advertising or selling user data. It's the classic exposure argument. Give me the service for free and someone else might pay for it who hears about the service through my social network. As discussed elsewhere in this thread, this line of thinking can even be completely reasonable for various services that have low costs associated with the free offering. It's when the free offering costs a significant amount to operate that you start running into trouble.
  • MattGaiser 6y ago
    “ demanding we convert and rely on donations” People whining for more is fairly normal. Wanting it for everyone in perpetuity is new. Does everyone think most businesses are somehow ad supported?
    • dataflow 6y ago
      > Does everyone think most businesses are somehow ad supported? Not necessarily ads, but they might assume most businesses will monetize whatever info they get their hands on however they can. Especially so for free offerings ("you are the product" etc.).
• 9dev 6y ago
  The article is missing out a huge argument in favour of free plans: the opportunity to generate data. This doesn’t even need to be done in a shady manner - imagine analysing what users usually type in free form boxes, normalise that and build a tag hierarchy, for example. There’s a billion way to make a free plan useful - it’s not just a curtesy to your users!
  • mmaunder 6y ago
    Nah. I had a million installs of a web widget and was drowning in data doing over a billion impressions a month and we had to pivot or starve to death. Nice idea but not true in my experience unless you already have customers lined up and are intentional about what you launch in order to generate the specific data they are hungry for.
    • freddie_mercury 6y ago
      Yeah, I've worked at places with millions of users and product managers are drowning in data. It honestly doesn't really make it much easier to build features that actually drive revenue. To a large extent, this is why advertising (and related data selling) is so widespread: because it is obvious how to make money from the data. Someone said they'll give you $1,000 for a list of all the users who are male, in Canada, and have typed in stuff about Python. The parent's example about tag hierarchies... That sounds like exactly the kind of nifty feature I've seen launch a dozen times that has precisely zero impact on revenue.
    • 9dev 6y ago
      Fair point, although I wasn't referring to simply hoarding every data point you can get but specifically _using_ free users to improve your data set. Obviously this isn't a viable option for everyone. Take a look at Google for a great example of this: Their "local guide" feature on Google Maps is using gamification to improve location data by convincing users to work for free; or Recaptcha using user input to train their machine learning models.
  • SatvikBeri 6y ago
    The problem is that free users aren't a representative sample of people who'll pay. I remember a 37signals post that mentioned how something like 90% of their paying users were designers, but that was only 5% of their free users. If you optimize on a sample that's structurally bad, no matter how large it is, you'll end up building the wrong thing.
• jonpurdy 6y ago
  Anecdata: Trello and Jira both have free plans that I used that caused me to recommend them for paid usage at multiple companies I’ve worked with. Those free plans resulted in $xx-$xxxx monthly subscriptions. Asana has a paid plan with a 5-user minimum limit. I never bothered to even try it since I wouldn’t have the extended time to play with it. As a result it never even got mentioned to companies I’ve worked with. So, it’s important to have a free plan (or at least very cheap paid plan as the article recommended) for “influencers” to get heavily involved with.
  • hn_throwaway_99 6y ago
    The article specifically mentions free trial periods as being a good idea.
    • Proziam 6y ago
      Different anecdata here. Trial periods suck. My experience is that I rarely have enough time to determine if I really like the service or if it's still just a shiny new tool to play with. I need more than 14-30 days to actually put in the work to understand a reasonably complex tool (say a CRM system) well enough to make a commercial recommendation. Obviously this issue doesn't apply to all SaaS companies but it's probably common enough to be worthy of consideration.
      • viraptor 6y ago
        There's also the case of services which will only do (or strongly guide you to) the highest level subscription for the trial period without obvious indicators for which option you see is available in lower tiers. Sure, you can dig through the features table linked from the pricing pages, but that's unnecessary effort.
    • detaro 6y ago
      both examples given specifically have free plans, not just trial periods. A trial period is useful for specific evaluation, but not for having experience with a tool and recommending it on that basis.
• Spooky23 6y ago
  I don’t know if I buy this logic. I can tell you that AWS free tier in my case didn’t “convert” from their metric perspective, but they turned into commercial accounts that generated $5-6M for my customers that early adopted. I can think of a lot of other paid SaaS stuff (Trello, Basecamp, Dropbox come to mind) where that free plan translated into real revenue. For work stuff, the effort to spend $500 is as much as $5M.
• alpaca128 6y ago
  One concept I like is the Premium plan that gives lifetime access to all features but only updates for one year. It can act as both the old-school software purchase or subscription depending on what the user prefers.
  • julianlam 6y ago
    Atlassian does this, no? Or at least used to. I believe they've stopped now.
  • jahewson 6y ago
    I don’t think this model aligns the incentives particularly well. If a business does a great job creating a piece of long-lived reliable software, they get punished by infrequent updates. If they ship a good-but-not-great product with some lock-in, need for frequent updates and an ecosystem of backwards-incompatible plugins and formats, then they get rewarded because you’ll end up buying it again next year.
  • marcusjt 6y ago
    That works for standalone/installable software but not for hosted/cloud-based services as keeping every version running alongside each other forever would be a nightmare!
• emsy 6y ago
  It's also much fairer to your paying users, since they'll end up paying the bill for the free users.
• shortformblog 6y ago
  I wrote a piece about power users recently that gained some notice on HN a little over a week ago. It seems to fit in the same mindset as this, except written from the power user’s perspective: https://tedium.co/2021/01/27/power-users-history/ https://tedium.co/2021/01/27/power-users-history/ Comment thread here: https://news.ycombinator.com/item?id=25978396 https://news.ycombinator.com/item?id=25978396 This honestly feels like my argument written from the perspective of the product maker. I hope we meet in the middle on this subject, because it seems like there’s some good overlap to be had. Good tools should not just be built for free because that’s how we’ve always done it. Make everyone happy.
  • nexthash 6y ago
    There's a very simple reason companies like Google treat users like crap and kill good products: growth rate. Google & co's business models revolve not around meticulously building and charging for great products (classic business model) but controlling Internet marketshare. The more users reliant on them, the more money they make. Quality be damned, all they want is a bigger DAU metric. Good, maintained products? Customer service? Heck with it. That's not their business. How did it come to this? Well, at least in the short term, this kind of business busts up traditional high-quality paid tools. If a Google-like business enters a market where a high-quality paid competitor exists, they will subsidize something similar with VC money and suck users away, bankrupting the competitor. Then, with the power they have gained they are free to focus on monetizing their users, which is a story for another time. This is especially made easier by the fact that it is really difficult to get paid on the Internet: you are essentially selling access to information, not a physical good (all of this might not apply to businesses rooted in the physical world like Amazon and Airbnb). When an average user sees a free service and a paid service both offering what is essentially information, they will go free every day. Since the price of reaching people on the Internet is so low, and the difficulty of getting paid is high, freemium platforms emerge and can outcompete paid competitors by leveraging this fact. As a consequence to this, quality tools have retreated into paid niches, driven to raise prices. We are essentially left with two product types: gigantic Google-like freemium platforms, and high-quality high-expense alternatives (e.g. Feedly in the Google Reader example). While the former might suck at serving their users and providing value/quality, they make so much money that a cheap, quality tool or a paid, large platform will be quickly snuffed out like a candle without huge investor subsidies.
• deleted 6y ago
  [deleted]
• dan-robertson 6y ago
  I don’t really understand why this gets a domain name instead of being a blog post. I read it feeling like this was the result of some collaboration or consortium trying to ask myself if the author might have something to gain from it, when really it seems to just be the work of one person. But maybe it is good to have an entire domain for some reason.
  • jefftk 6y ago
    A domain name is ~$10/y. If you have a concept that you want to be able to link people to, it's more than I would pay, but I could see it being worth it. (In many ways I prefer the opposite: by hanging everything off of jefftk.com people who come for one post or project may find others of mine they like.)
• ahepp 6y ago
  The fact that I've seen this repeated so much tells me these SAASes are probably more reliant on the free users than they realize. Otherwise they wouldn't talk about it, because they'd have done it, and it wouldn't have been a big deal.
• quickthrower2 6y ago
  Free plans can be a viral marketing investment. This is a "never do X" opinionated click bait (click bait because we are always interested in a confident never do X expert opinion vs. the less interesting reasoned debate.).
• prawn 6y ago
  A lot of what I use (including as a paying user), I use because I was able to start on a free tier and then upgrade as my needs grew. DaVinci Resolve, Sublime Text, GSuite, WeTransfer, Dropbox, iCloud, Sequel Pro, etc. I didn't try Premier, Final Cut, various text editors or paid-only cloud services.
  • freddie_mercury 6y ago
    The article talks about the costs, suggesting the net result is often bad. Basically they are saying, "Ignore end users online because they are only seeing and talking about one half of the equation." All you've done is essentially say, "I'm an end user online who only knows one half of the equation but you should ignore costs!" It just feels like a failure to engage with the point the article is actually making.
    • prawn 6y ago
      I am involved with a number of products which range between paid-only, freemium and free, so I'm familiar with the pros/cons. I know both sides of the equation but was offering comment on one half. The author appears to have a freemium product in their portfolio, and acknowledges there can be reason for that. Countless established or major players (Dropbox, Basecamp, Trello, etc) seem to make use of the freemium angle. Suspect there's something in that and that a free tier is a necessary evil at times.
  • kccqzy 6y ago
    Strange that you mention Final Cut. It's clear to me that the free, limited edition of Final Cut already exists by the name of iMovie. (This was after Final Cut Pro X, not 7.)
    • prawn 6y ago
      I tried iMovie at some point but it was too limited to assess the featureset that would be required. DaVinci Resolve's free tier gives you basically everything short of 5K export, built-in noise reduction, and a couple of other things - easily proved itself indispensable so I happily upgraded. You also get some great forum help from high-end Resolve users that is relevant to those learning.
• vincentmarle 6y ago
  Like with all things in life, it depends on the context and the use case.
• boomboomsubban 6y ago
  Offer no free plan but releasing it as free software avoids your cost per user, prevents complaints about paid features, and allows you and your users to give back. Seems like it should at least be mentioned as an alternative.
• hartator 6y ago
  At https://serpapi.com https://serpapi.com, we are actually aiming for the reverse. We don’t have a free plan at the moment only free trials with credit card validations and are going to introduce a small free plan soon-ish. 3 big arguments for a free plan from our perspective: Ease for marketing, allow Enterprise users to try out when giving up credit card info is a process for them, and lower Stripe dispute rates.
  • EdwardDiego 6y ago
    > only free trials with credit card validations Yeah, this has stopped me trialling services several times in the past, because I don't want to use my personal credit card, and the hoops to use a business credit card are rather time consuming.
• OJFord 6y ago
  Depends who you're targeting with the paid plans, I think। The OP sort of addresses this in 'won't I miss out on paid users', but it's sort of a cop-out/has some unmentioned assumptions। Anyone small wants to start off free and pay more as their usage (and own revenue) grows - enterprise may be willing to pay hundreds per month off the bat, sure, but are they your customer?
• StavrosK 6y ago
  I run deadmansswitch.net, and the free plan there only lets you send messages after two days, when people generally prefer much longer intervals. This serves as a time-unlimited trial that lets you try the product before upgrading, and if some people are fine with super short periods, good for them. It's worked out very well.
  • JohnCurran 6y ago
    Your pricing page currently shows “Test” in the Intervals row on the Free column. I imagine it should instead say “1 day” or similar. Just thought I’d give you a heads up
    • StavrosK 6y ago
      Thank you, I mean "test intervals" because that's what they used to be called, but I'll change that, thanks!
• qwerty456127 6y ago
  I'd argue you should measure how active does a user use a product and only charge them when you see they actually make reasonably heavy use of it. An inactive user doesn't cost much and can convert into an active-and-paying user once. A slightly-active newcomer doesn't cost much either and can actually bring value by reporting bugs (incl. UX bugs like unintuitiveness). I wouldn't pay for what I had no chance to try. A free month is also useless: I just sign up and then see it expire as I fail to find spare time to actually try it. Just measure how active the user is and tell them they will have to start paying soon once they reach a certain threshold in median daily interactions or in storage/traffic/whatever. Don't forget to provide an option to export and delete their data.
• jariel 6y ago
  If there is any network externalization at all, you have to have a free plan, because 0.01 is a barrier. Consumer services are like this. But SaaS can be as well. But it's true you don't need to provide businesses anything for free over time. If a company can't pay you $20 a month, they are mostly useless to you.
• christiansakai 6y ago
  Slightly unrelated, but the mantra "Charge More" should be applied in context. I have a friend who is currently selling a super beginner Japanese lesson (and by super beginner, I really mean super beginner) that she charges for $45 x 6 month === almost $300, yet the content can be found on $9 apps in the App Store. She is confused why, despite her 8k followers subscribed to her email, she can only convert a handful few to the lesson.
  • pembrook 6y ago
    With just the information you've given, there's no way you can conclude with certainty that the price is too high. The real question is, how targeted is the email list towards a japanese language course offering, and what is the open rate on the email list. If everybody on the list is interested in learning japanese, AND, the email list has good open rates, that MIGHT mean her pricing is too high. Or not. That said, I'd rather have 5 customers paying $300 than 50 customers paying $30. Let the big companies take on the cheap users. As a solopreneur you have to chose your battles wisely. I'm skeptical that price is the problem. People pay thousands of dollars for courses with super beginner, freely available information all the time. If you save me a day of research to cobble together all that beginner information, that's $300 well spent.
    • christiansakai 6y ago
      Well, I looked into her courses (and I, though not a beginner, already tried more than 20 apps out there so I know what a $300 or $9 content should look like), and plenty of people on her social media commented that it is way too expensive... Going by your logic, why doesn't she increase the price to $30000?
      • pembrook 6y ago
        She absolutely could! She’d just rent some brick and mortar space and call it a university, and sell people on the social aspects of meeting like minded people. Millions of people in the US pay $30,000 or more to do basically that same thing (per year!) ie. they take a series of outdated 101 basics classes for an “associates” degree. Look at what Ramit Sethi does, he charges thousands of dollars for what can be summed up in one sentence; “live below your means and buy index funds.” And people find that a good value because it’s convenient and structured! Anything is possible if it’s positioned correctly.
• jrochkind1 6y ago
  Free plans are marketing, not that people on free plans will convert to paid plans en masse, but that people who will start out on paid plans hear about the product because of how many people are using the free plan. The blog posts, the twitter posts, the conversations over drinks. How likely is the free plan to work to do that, how do you make it more likely? i don't know. I just recognize the products that have done it. There is of course still a danger in the free plan costing you more than the marketing is worth. Of then of course, once you become a household term (which would have been hard to do without the free plan), the free plan can be an albatross you'd like to get rid of. An example which comes to mind is travis, which I don't think would have become nearly as popular without the free plan -- in part because they were kind of introducing the whole market of cloud CI. And of course, the recent new private equity owners of travis just got rid of the free plan, although I don't know how generalizable that particular example is, private equity is almost always about slashing costs at the intentional expense of future growth. In fact, this now reminds me of recent discussions we've had about open-source centered busineses, like perhaps ElasticSearch. The open source license is what gets you the market share, but then perhaps interferes with your desire to maximize exploitation of that market share. Similar perhaps to what free tiers, at their best, will do.
  • qwertay 6y ago
    Most software tries to get students and individuals in on the free plan and then enterprises on the paid plan. Individuals were unlikely to pay for the software anyway but they can shill it to their employers.
• lovemenot 6y ago
  I wrote a SAAS pricing sheet last week, but I felt something was off. Having read this article, I will replace free-tier with low-one-time-price / lengthy-but-capped duration / all-you-can-eat of somewhat restricted functionality. Where functional restrictions obviously correspond to our cost increasing linearly. This approach seems especially pertinent to a service which has mostly one-time utility. ie few people would need a recurring subscription anyway. e.g. wedding planner for brides
• EdwardDiego 6y ago
  I steadfastly agree with the "don't require payment details for a trial period". If I'm trialling this for usage in my workplace, I am not going to give you my personal credit card, and the business credit card is very rarely used for software subscriptions, and only if we have no other choice in payment options. It's an immediate turn-off, plus it speaks of a slight lean towards dark patterns where my free trial turns into a paid account if I forget to cancel (because I wasn't using your service enough to think of it). I'm sure it looks good on your conversion rate Excel graph though.
• NearAP 6y ago
  While I understand the points being raised, I disagree with the proffered solution 1) Some folks build a small SaaS product to sharpen their skills, learn new things and as a strategy to position themselves for a higher paying job (they can put it on their resume and discuss it during interviews) 2) It also depends on your target market. Some folks convert to paying customers (huge paying customers) because they have experimented extensively with your product. Take Google App Engine (GAE)- folks use it extensively for small websites, and then when they have something they think can be commercialized, they become paying customers. 3) You can do like GAE and have a daily free quota which is basically a freemium model 4) Regarding the complaint about the headache of supporting free customers - you can make it clear that the free plan doesn't come with support or it comes with limited support
• zitterbewegung 6y ago
  Don't give away your source code either.
• gnicholas 6y ago
  I recently had to add a freemium tier to my Chrome extension, on account of Google getting rid of their built-in payments platform. I have been surprised to see how many new users we have picked up in just the first few days since this change went into effect. We had fewer than 500 users (all paid) from over 5 years of being in the store. In the last two weeks, we've picked up another 500. Granted, most of the new users are not paid, but some percent are converting to the paid subscription. Because this is a Chrome extension, there are no server costs. There are some purchase-related customer service inquiries, but these are mostly due to glitches in our new purchasing system, which will presumably go away over time. We've had no questions so far that are unrelated to purchasing (i.e., from unpaid users).
• 0xTJ 6y ago
  I'm much more willing to shell out for a perpetual license for software than a subscription. I use Directory Opus 12 Pro but I don't have a decent PDF tool. Even better if it's an open-source tool that I'm paying for.
• iujjkfjdkkdkf 6y ago
  Worth noting from the end of the article: > If you're curious about my SaaS projects, the first is Friendly Captcha, a privacy and user-friendly alternative captcha. Friendly Captcha does actually have a forever-free plan, mostly because it also has the social mission of fighting ReCAPTCHA's dominance I have not looked at the author's product yet but I'm very supportive of anything that replaces re-captcha. Not only is it offensive to be asked to perform those tasks for Google, it is effectively a way for them to punish people who don't allow Google to track them. Re-captcha is google exercising monopoly power in the worst way. I routinely abandon transactions that ask me to solve a re-captcha for them. It's very nice to see alternatives.
• chrysoprace 6y ago
  To offer a contrasting opinion, I'm more likely to convert if I'm able to explore the product's free features in my own time. In particular, the "free for individuals - paid for teams" offerings allow me to spend my free time exploring a service and then advocate the product to my team. If I'm given a 30-day free trial then I'm less likely to have a chance to give it a proper look. I'm much less likely to create an account altogether if they need a credit card and auto-renew after the trial period ends. I wish there wasn't such a focus amongst tech companies to squeeze as much money as possible from consumers. Sometimes I just need to look at it in my own time and sometimes a service isn't worth paying for. Service for hosting a web service? Sure, I'll pay. Transfer music from one cloud provider to another? I'll write a script for that.
• awillen 6y ago
  This is really aggressively oversimplifying a complicated problem that exists across a huge number of different types of software. In some cases, sure, a free plan is going to cost more in effort than it pays in users who convert to paid. That said, the objection that free users are going to take up too much time is pretty easily solved... look at Google, which has zero customer support and an enormous number of free users. As long as you set expectations up front, you can offer minimal customer service to free users (which also means you can sell it as part of paid plans). But even beyond that, there are just so many generalizations here that may not apply to you. Deciding whether to have a free plan or not should depend on what the actual percent of your users that convert from free to paid is - you shouldn't just go with no free plan because someone says, "Many users will never ever pay, regardless of how good your product is and how much of a problem it solves." There's some reasonable thoughts in here, but the absolutism of it shows that the author hasn't really considered the breadth of possible scenarios here - likely they've gone through this analysis with a product or two and come to the right conclusion, but that doesn't mean that conclusion is anywhere close to 100% applicable.
  • mproud 6y ago
    Agreed. Sometimes adoption is just as important as making money.
  • PragmaticPulp 6y ago
    I view articles like this as if I'm watching a high school debate team competition where the author is forced to argue a side while ignoring the positives of the other side. Fun for seeing emphasizing different perspective, not so great for giving a balanced view. > In some cases, sure, a free plan is going to cost more in effort than it pays in users who convert to paid Definitely. This is the most common mistake I see with free plans. Over-eager founders like to think of their free plan as a trial period, where users will either stop using the product or go on to subscribe. Instead, huge portions of your userbase simply want as much free product as they can get without paying for anything. Never underestimate the number of people who will gladly use your product right up to the limits of the free plan without stepping over. This can be okay if those free users end up doing free marketing for you. Dropbox is a perfect example of a tool where many (most?) users never even have a need to upgrade from the free plan. However, those free users were poised to recommend Dropbox when their companies were looking for a file storage and sharing solution. They also spread the Dropbox name around with Dropbox share links. Slack is another great example of a free plan that lulls users into proselytizing for you. How many companies adopted Slack simply because some of their teams were already using the free plan to get work done? Yes, free plan customers tend to complain way more than you'd think. However, you don't have to listen to them whine. You just have to make sure they aren't soured on the experience in general. If your core product can be reduced to something with near-zero operating costs and an absolutely bulletproof, hands-off operating mode, a free plan isn't much of a drag on your company. However, if your product is such that free users generate the same costs/server load as regular users, you're going to inadvertently create a business model where your 10% of paying customers are subsidizing the 90% of free customers. You really need some clear limits on the free plan and an ultra low overhead backend to make this work at all.
• crb002 6y ago
  Nothing is free. The free plan dogfoods new features ;) My biggest issue is the free plan doesn't expose bad UI patterns in the payment path.
• vmception 6y ago
  Yes, every resource matters more to poor people Yes, you can simply not cater them Leaving a void in the market means someone else can consider making a competitor and inheriting all those problems, and maybe they have a good time If you are that competitor, ignore this article
• encoderer 6y ago
  Checks the guys saas... $4 plan. Hmm. This rounds to free. I wonder how he squares that. Anyway, my advice would be: depends on your unit economics.
  • protoduction 6y ago
    It's just a landing page you are looking at for which I wanted to put down some numbers. The product [1] is very much pay-per-use (per e-mail sent), so the number shown here is more of a minimum monthly charge. That said, I will probably double that number (and the included usage) prior to launching. I expect there is a large difference in the quality of your users whether it's actually free or it's $4 per month. [1]: https://magiclogin.net https://magiclogin.net
• xwdv 6y ago
  This works, until it doesn't. If your free plan is killing you you're structuring it wrong. Free users shouldn't get support, that's reserved for paying customers. A free user should basically have to just read documentation. And if there's premium features with expensive hosting costs that aren't trivial to subsidize, then that is not a free feature. You also lose a lot of market share when your competitor starts offering a free plan. Have a free plan, but never think of it as more than a lead generator.
• ashdev 6y ago
  I agree with the author to some extent. If you're a B2B startup then it definitely makes sense. For B2C it can be a bit tricky to determine because you want to know if your users find your product useful and the quickest way to get your product in the hands of many users/potential customers is to offer the product for free(with some restrictions). Especially for indie developers like me, we need to get validation and feedback on the product as quickly as possible, and free plan allows us to get that quickly. Once you gain some traction then it makes sense to not have a free plan to filter out free users, but in initial stage I wouldn't shy away from free plan personally.
• chrisfrantz 6y ago
  As a counter, I think free plans are the way forward. ProfitWell, Canva, Mailchimp, etc are all leaders. Freemium is how you win. I broke down my thought process here: https://www.chrisfrantz.com/how-to-kill-a-unicorn/ https://www.chrisfrantz.com/how-to-kill-a-unicorn/
  • protoduction 6y ago
    Interesting article, and I think we (I'm the author of the submission) may both be right to some degree. I wrote the article with an small/indie SaaS business in mind, which often targeting other small-medium businesses and developers where the goal is not necessarily to become market leader. The intent was to say in a convoluted way: focus on those that value your business, and in particular focus on paying customers (the higher the better). In general it's better to have fewer customers that pay more and pamper them. If you have millions of users the story is very different of course.
• drusepth 6y ago
  I think this advice works well for established markets where users know what to expect with a product ("Netflix but X", "JIRA for Y", etc) For people building Thiel-esque "zero to one" SaaS products, I've found free plans absolutely invaluable in educating users on what your product can do and why they might want it. In my experience, offering a free plan lowered an otherwise-high barrier of entry and helps those users then build a habit (incorporating your product into their workflow/dailies) that converts comparably to hiring salespeople. There are indeed a lot of unintended/hidden costs to having a free plan, but there are a lot of costs to selling a paid-only product, too. Seems like every product should gauge what's best for their use/market. :)
• deleted 6y ago
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• wenbin 6y ago
  It’s expected that comments on this thread would be divided into two camps, from both sides of the table - customers and service providers.
• gyudin 6y ago
  I would say that statement is incorrect. In many ways it depends on your SAAS product's economy. Having free users have it's own benefits: 1) You can consider them as beta-testers as they will help you find issues with product faster 2) The most critical users frequently covert to evangelists if you listen to them (considering their "demands" are reasonable) 2.1) It's really useful to have active community around your product for different reasons. And it might be hard to do with corporate users for example :) 3) Access doesn't have to be completely free. You can make them hoop through some loops - sharing about SAAS on social networks, inviting friends and so on. 4) Frequently you can actually convert a decent amount of free users with good discounts. Longer people use your service the higher is gonna be the conversion rate. In general discounts ain't a good solution, but a lot of people don't actually need your software - they see a good deal for some interesting product and buy it in reserve for the future. I think a lot of us been there with all deals on Steam, having hundreds of games in a library you haven't and probably won't play :) 5) Many users are actually ready to pay for some kind of support if it's not too expensive. But if you built a decent community around your product your free users can frequently get help they need on your forum or some board. 6) As others said frequently previous personal experience really helps with onboarding so there is a higher chance somebody gonna recommend it to their companies. There are gonna be other benefits as well too. Personally I have around 10 years in product marketing management and development in Russia and USA. And as some of our products were Shareware I must say the biggest problem in ex-USSR countries was always a huge amount of pirates, but from my experience if you play it right you can use even them as huge promotional channel. P.S. Getting a good "PR" manager is a good thing too. Frequently you can contact people who are vocal and berating your product and just give them access to Premium features for free :) You won't receive money from them, but having less negative reviews will help your sales. Frequently they would appreciate the gesture and make favorable recommendations. (In many times people just are unhappy with something else in their lives, they just project negativity on your product cause they are in a bad place and getting a response from a real human means a lot to people - if it's not just some "sorry script" many customer support agents use).
  • ev1 6y ago
    3) is quite possibly the worst thing imaginable to a software person that doesn't like social networks, of which there is much more prevalence than the human baseline
• bachmeier 6y ago
  The article misses the biggest reason to offer a free plan. If your competitor has one and you don't, they're the "default" that everyone uses, and nobody bothers looking at your product. Along the same lines, you're probably not entering a completely new business, so you need to give someone a reason to check out your product. The intelligent free plans are the ones that offer some things for free, but they say "If you like what you get in the free plan, you can pay to get X" for some useful X. Evernote did it for years with their free plan. Evernote was THE notes app. Now that they don't really have a free plan any longer, but Notion does, it'll be interesting to see how it works out. But keep in mind that Evernote is an established company, not a startup looking for the first 10 paying customers.
• aetherspawn 6y ago
  Free plans are about generating recognition, word of mouth, etc. They are much cheaper than advertising, and better at targeting actual users. If you don’t offer a free plan because it’s too expensive, but blow $$$ on social media and web advertising, you’re probably doing it backwards. For example, why does anyone know or care about GitHub? Because it’s free.
• ufmace 6y ago
  I do kind of like the idea of alternatives to a completely free plan, like pay a few bucks once to be able to use the basic plan forever with low limits etc. Another one I've seen that I like is to allow free use with registration, but you have to register with an email address at your business domain, no free or public commercial email domains allowed.
• jitl 6y ago
  At Notion, we used to have a limited free plan where we only allowed users to create 1000 blocks (pages/paragraphs/embeds/checkboxes/database rows) before we directed them to upgrade to the "Personal Pro" plan. Supporting free users dealing with the block limit was a major headache, just as described in the OP, but more importantly the Personal Pro plan was kind of a dead end - few users converted to Pro, and those that did weren't worth much, since the Pro plan is pretty cheap and doesn't have much network effect. We took a hard look at that free personal plan and how it worked with our goals. Instead of phasing it out, we decided to make it unlimited - now personal users can make as many blocks as they want [https://www.notion.so/personal https://www.notion.so/personal]. But importantly, we also switched up our segmentation at the same time: we restricted the personal plans' collaboration model and created a new "Team Trial" plan, with the same 1000 block limit, but with all the teamwork features included. Another thing to note about our Team Trail is that it's not time-limited at all, teams can keep trialing Notion until it has clear value to them. We have many fewer users frustrated by the block limit, but those who are are much more valuable, and are getting a lot more out of Notion -- when they upgrade, it's to a Team plan with strong network effects and a path to future expansion. And all those (now) very happy users on the free plan? They're like jonpurdy [https://news.ycombinator.com/item?id=26059666 https://news.ycombinator.com/item?id=26059666] - they'll take Notion into their (future) teams and workplaces, even though in the shorter term they're a strain on our systems. My advice is - there's more nuance to this than "MAKE IT FREE" vs "DON'T MAKE IT FREE". Think about how you structure upgrade incentives around value, and about how your free plans fit into your overall market strategy.
  • mgadams3 6y ago
    Great stuff Jake, thanks for sharing. I watched that pricing change very closely as we have a similar progression from solo to multi-player at [https://grain.co/pricing https://grain.co/pricing] but very helpful to hear the reasoning behind it. Completely agreed that the nuance is critical to this discussion and the absolutism makes the great clickbait but isn't supported by reality.
  • jlbnjmn 6y ago
    This is a great example of good strategy coming from better understanding and not a better template. Thanks for sharing!
• deleted 6y ago
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• asiachick 6y ago
  I am worried about github being free. I'd love it if they publish how much it cost them to offer all the free repos, free webpages, free ci, ... I can only imagine the growth rate accelerating over time to the point they'll need to stop the free tier or limit it in some way.
• throw55 6y ago
  If you are an entrepreneur reading this, IGNORE the comments. They are written by people who form a very specific (and small) subset of the overall market and have very little overlap with the actual world at large. If you plan to sell to the HN crowd (let's say development tools or something nearby) - by all means listen to their views. If you do not - ignore all the 'i want free stuff' and focus on people who are ready to pay for whatever you are making.
• zwog 6y ago
  I'm not on board with this. It highly depends on the type of software or service you offer. Anecdotal example: I've used a lot of "free for students" or "free for personal use" software during my university time and switched a lot until I found the product that was best for me. When I started working I wanted to use the same product because I was used to it. That's why the company I worked for payed several thousand Euros for JetBrains IDEs for example and I even have a personal license for freelance work. Regarding the argument that free users don't convert: this does not mean the would have bought the product when there was no free plan. Maybe the product is not good enough, maybe it does not integrate in to the user's workflow, maybe they tried and moved on. And if I offer a free plan people have to apply for, what happens if I spend more time reviewing those applications as I had to "support" users on the totally free plan? If you offer a free plan: clearly state there is no official. Maybe offer a public forum where users can help each other. You'll probably find users using your product in a way you had not thought of and use this to advance your product. If you don't offer a free plan, have a long enough trial period and totally consider this: > Bonus points if you don't require payment details, as this may increase the friction of an employee of a larger business from trying it out without approval. In my company I simply can't give payment details without going to the whole way via department head and accounting department which usually takes a couple of days and is an annoying hassle. And privately am I extremely reluctant to give my payment data for a trial. I don't know how save it is, I don't know how easy it is to cancel my trial subscription and so on. Too many scams out there, can't be cautious enough.
• Nullabillity 6y ago
  It's always hilarious to read these posts by silver-spooned entrepreneurs complaining about those oh-so-horrible entitled users. Well, and saddening that this drivel seems to be a reliable way to get on the HN home page.
• tchock23 6y ago
  I must be weird in that I like my free users. They’re often the source of decent insights about the product, and it fits with my values of running a company. I do see some of the points of the article though. There are a handful of ‘entitled’ free users, but in my experience they are few and far between...
• arthurofbabylon 6y ago
  There are a lot of misconceptions around freemium and the value of non-paying users. Many of these you can’t see until you’ve gone through the cycle of creating a business, marketing it, getting customers, losing customers, repeat. Here are some of the things I’ve learned, either from experience or in-the-thick-of-it observation. 1. It’s rare for a business to experience dominantly viral, product-driven growth. Most don’t, including the successful ones! The few businesses that do succeed that way tend to attain ubiquity, so people mistakenly assume a free tier is the best path. (This winner’s bias must be a known fallacy, but if so I don’t know its name.) 2. Moving churn earlier in the customer journey speeds up iteration cycles and increases fidelity of feedback. We’ve all seen “hugely successful” apps that get a lot of users but never find a business model. Maybe if they started charging earlier in the customer journey they would have found product-market fit. It is extremely difficult to calculate customer value and pay for marketing without rapid feedback. 3. Not charging users can create hideous feedback loops. Just take a look at Facebook. 4. Free tiers are a consequence of the non-linear reality of venture-backed teams. Backing capitalists prefer a 5% chance of scoring 1,000 than a 50% chance of scoring 10, so they will of course encourage freemium (or rather, metrics like “daily active users”) alongside a whole host of other too-risky-for-most methods. 5. The author is completely correct that those willing to pay are the easiest to serve, and those unwilling to pay are most likely to need help, leave poor reviews, and give misleading feedback. 6. Again as highlighted by the author, the infrastructure behind multiple tiers is way more costly than you’d expect. It’s easy to get caught in the business mechanics when one could be making the product and marketing better. How costly do you think it will be? Multiple that by 3 to get the actual engineer/design hours, now multiple it by 3 again to understand how distracting it can be.
• foxhop 6y ago
  I ran Remarkbox for 5 years before deciding to make all plans free! https://www.remarkbox.com/remarkbox-is-now-pay-what-you-can.html https://www.remarkbox.com/remarkbox-is-now-pay-what-you-can....
  • aryehof 6y ago
    An interesting decision. What have you learned since doing so?
• dwg 6y ago
  Don't believe it's a rule to apply universally, but it does strike me as perhaps a good rule of thumb: Only include a free plan if you can demonstrate it leads to a better outcome (holistically). So then, does the author plan to remove the currently available free plan from their own SaaS product, Friendly Captcha?
• rokhayakebe 6y ago
  How about Free Plan needs Paid Support, otherwise use Community Forum/Knowledge Base. Then Paid plan comes with Free Support.
• cat_plus_plus 6y ago
  This excludes - Businesses that have not yet built a product they want to charge for - Businesses that have not yet decided who to charge (individual users vs advertisers vs 3rd party sellers) - Businesses that have other money making products that benefit from free parts of the ecosystem It's easy to get cynical here, but Google/Facebook/Twitter are free for end users. Are you going to make all the sacrifices of toiling in a startup and not even dream of making it big?
• going_to_800 6y ago
  Guys, this page is for indie hackers, mostly with B2B apps. You all give examples supporting free plans B2C products from well funded companies. Free plans are usually bad if you're a small B2B startup trying your way...even more so if you're bootstrapped. I also see that people disagreeing with this tactic are talking more about how they like it to be, not how it's best for the business.
  • catmanjan 6y ago
    Are most people here doing B2B? I assumed it was mostly b2c
• deleted 6y ago
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• kureikain 6y ago
  I came to the same conclusion for my saas. instead of creating a free plan I made it dirt cheap. $1 per month. my service is an email forwarding so it is tough to deal with spam. if i attract too much free users i have to deal with a massive amount of spams. by not doing free plan i have more time to develop premium features. another thing is free user will more likely look for other free solution and always a free solution will pop up. So it is really hard to compete. take gmail, how can you compete with google free offering？
• technick 6y ago
  This should be labeled self promotion spam.
• raghuveerdotnet 6y ago
  When it comes to B2C, prescriptions don't apply uniformly, or for that matter scale. Beware. My only suggestion would be that be honest with the value proposition of your product. Know that your electron-based note-taking tool is not the same as the entire g-suite or ms office. And finally, remember that no one is more emotionally invested in your product than you are. So let the suggestions trade.
• start123 6y ago
  I recently shut down my free plan and instead introduced Trial on paid plans. Brought in a new entry level plan that is far cheaper https://blanq.io/pricing.html https://blanq.io/pricing.html to make the transition easier. As an indiehacker, the free plan allowed me to iron out bugs and improve the overall experience of the platform. But the amount of effort it took to maintain the free plan was enormous so, I shut it down. I informed users about the decision and, I am glad few converted to being paid customers. I have a lot of free time now and I can focus on delivering value to my customers. The server load also reduced due to reduction of free requests and database writes/reads. For a large SAAS company like Slack, Trello etc, it makes sense to have a free plan since you have a lot of resources at your disposal but, if you are a small team or worse alone, then no.
  • psanford 6y ago
    Slack and Trello didn't start out as large companies, but they did both start out with a free tier.
• JackPoach 6y ago
  I think the most important question is who created this page and if they have any kind of success with their SaaS in a way Bitrix24, Slack, Trello, Notion or Miro do, which all have lifetime free plans and millions of users.
  • aembleton 6y ago
    It was created by Guido, no idea how successful his projects are but he does list them on his page: https://guido.io/ https://guido.io/
• mythz 6y ago
  Context of your SaaS important, e.g. if GitHub didn't have a free plan it would've killed any chance of mass adoption & ultimately their $7.5B exit. "No free plans" are prevalent in media subscriptions e.g. Netflix, Prime, AppleTV, Disney+ which offer free trials, but I'm struggling to think of any popular pure Software SaaS services that don't have a free plan?
• yoshyosh 6y ago
  We used to do free trials but I think early on as a bootstrapper/indiehacker not having a free plan helps you get from 0 to 1 faster, which should be your goal. Understanding what set of features results in someone not only paying for the product but sticking each month as well. Offering a money back guarantee has been a good in between for us, this way users still have some sort of recourse if things don't work and it helps alleviate their purchasing decision. We also capture a bit of that revenue if they decide to continue to use the service (since they pay the whole time rather than a free 2-week/30 day trial). Lastly it helps get more serious buyers in the door and reduces support w/ free users early on. Free trials don't create this dynamic of having skin in the game, most of the time people will forget they're on a free trial and aren't incentivized to give any feedback as to why they didn't convert. By them needing to reach out to get a refund things are much more aligned with your goal of understanding if you are delivering enough value or why not. I think as you grow larger (or are VC backed/trying to capture market share), exploring a free plan is pretty important to help with that. But if you've grown to that point, having a free plan or not is likely the least of your worries.
• deleted 6y ago
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• brianjunyinchan 6y ago
  I feel this article both understates the effects of having a free plan, but also arrives at an unfair conclusion. It's probably smart to not offer a free plan when your startup is looking for PMF and iterating features, a la that Superhuman trope. Which is indeed impactful as that could kill a startup. But in the case of Trello or Jira as mentioned by top comment, which are established companies, they are indeed pointlessly leaving behind $.
• dgudkov 6y ago
  A free plan is OK as long as you understand that it's just a way of doing marketing. As with any marketing effort, you should keep the costs under control. As with any marketing, it's easy to get it wrong. "Don't offer a free plan" is a good advice if there is a problem understanding the balance between revenue generation and expenses or there is a better way of doing marketing, but it's hardly a universal recommendation. Free plans usually a good idea for a starting business when you look for approval from your target audience and stabilize the product. As companies grow, confirm product/market fit, polish the product, and discover more efficient ways of doing marketing, it's perfectly OK to discontinue the free plan.
• m12k 6y ago
  We have a free plan on our B2B SaaS. We don't experience the issue of entitled free users clogging up our support pipeline at all (despite having tens of thousands of users, 3/4ths of which are free). Maybe we've just been lucky enough to iron out most of the UX kinks enough that most users just won't need help? The real downside to a free plan as I see it is that you're effectively building two products - first a free one that needs to be good enough to get attention in the marketplace, and then a paid one that needs to be sufficiently much better to justify upgrading. That takes a while when you're bootstrapping, and you might not have the runway to execute all that. But the upside is that our free plan is a massive part of our marketing strategy, it's scalable and it's "pay once" (server costs are negligible for us, so it mainly cost us in development time). Our product is B2B, so isn't suited for a Dropbox/Airbnb-style referral system, but the app marketplaces that we integrate with (G Suite and Slack) grant visibility based on active users (and on G Suite also positive reviews), which we have 4 times more of than we would without the free users. It's much, much better for us that someone uses our free tier, than that they use a competitor. Used this way, a free plan is effectively a way to turn engineering/product dev hours into marketing - that might not be a good tradeoff for everyone, but it's been great for us.
• jamesrr39 6y ago
  What an odd article/website. While deciding against offering a free plan is a (reasonable) choice that is made by many SaaS products, it's obviously not a blanket thing everyone needs to follow. Free plans in SaaS products are to get people to evaluate/for marketing data and to hopefully ultimately lead free users to one of the paid plans (or drive some other revenue source, e.g. advertising). I think this is quite well known by now? Perhaps the author needs to capitalise more on what their business gets out of the free plan (e.g. marketing data), and work on converting that into to more paying customers. The DO $5 vs $500 comparison is odd as well. Maybe you would be able to spend less support time per customer. But what DO offers is pretty much a commodity by now. If DO no longer offered anything under $500/month... well, it's not that hard to figure out what would happen. The article goes on discuss alternatives, but while these solve some free-plan problems, these have other problems: - trial periods means you will probably put people off sign up, because they are waiting for a 30 day period where they think they will have enough time to try it out - free for FOSS/education/charity means you have to spend time deciding and justify who gets it and who doesn't - lifetime try-out plan eliminates recurring revenue, which is kind of a big thing for SaaS products... And then to top it off, at the bottom there is a link to the author's "Friendly Captcha" project, which alongside more paid plans with more features and limits, has... a free plan!
• gigatexal 6y ago
  Doesn’t this fly in the face of what drug peddlers have always done? The first hit is free because you’ll get hooked and then your LTV will rise. Same with software: let me try it in as seamless a way as possible and if it improves my life enough I’ll evangelize it for you internally. Paying up front kills adoption, no?
• vbtemp 6y ago
  --
  • jmknoll 6y ago
    > I am building some SaaS products and this is an important decision. After reading numerous Indie Hackers discussions about this topic I came to the conclusions above. I figured I would take an afternoon to put this up as a resource on its own website. Sounds like he wants to contribute to the conversation on a subject that he cares about by building something? Seems like generally a good thing to me.
• kwanbix 6y ago
  One problem that I see with SaaS vendors (and I am working on my own SaaS), is that some of them are delirious with their pricings, in my humble opinion. For example Duolingo. Love Duolingo. My kids use it. So we want to support them, but that means paying 120 euros per year per kid (240 euros!), so we use the free option. If they had a plan that was, I don't know, 1 euro per person per month, we will gladly pay 4 euros per month (we are 4), and then pay 48 euros per year. Or even a family plan of 5 euros per month per family of 4. Instead, we pay 0, and use the exact same resources. The same happened with a calendar service (those apps that allow you to reserve and appointment with a doctor or hairdresser or whatever). Their free tier was obviously 0. And then they asked for 30 dollars per month for 20 features. I needed only 2 of those features. I asked if there was a way to pay only for those. It wasn't. So I ended up moving to a competitor which was much cheaper (10).
  • ZephyrBlu 6y ago
    > If they had a plan that was, I don't know, 1 euro per person per month If you're building your own SaaS you will quickly realize it's very difficult to build a sustainable business if you only charge 1 euro/month. I just looked up the price of Duolingo [0]. It looks like it's only ~6 euros/month not 10, but think about the difference in revenue between 6 euros and 1 euro. You need 6x as many customers at 1 euro/month to make the same amount of money! [0] https://www.duolingo.com/plus https://www.duolingo.com/plus
    • kwanbix 6y ago
      I am not saying it is easy to make money. But the jump from free to next tier is too high for what it brings, basically nothing in the case of duolingo (no adds and for kids unlimited "lives"), and I use the same resources, only difference is that I am shown adds. I don't know what kind of analysis they did, but you can have 90% of your uses using your resources paying 0 euros per month, or you can try to have 50% of your users paying 1 euro per month. About the cost, I would gladly pay 60 euros a year for a family pack (4 people). You can even offer the Lite Family Pack for 60 euros and adds, and full family pack for 120 euros and no adds. Or something like that. But a family of four is 288 euros per year. That is a lot of money because it is not the only thing you pay, you pay duolingo, netflix, amazon prime, office 365, etc., and in some countries it is absolutely prohibitive. I mean, I would understand the pricing if they didn't have the free tier, but if you have it why that big jump in cost? And I am not saying it is not the same scale or anything, but in the beginning Whatsapp charged you 1 euro per YEAR! I know as I paid at least two years. It is a known fact that "consumers build internal reference prices in time through exposure to different prices. When they see a new price tag, they compare it to the reference price and form an opinion". If Office 365 or Google Suite can give so much value for 5 to 10 euros a month, it is hard to (at least mentally) justify paying that much for products that do less. And yes, I understand it is a perception thing. Another option is "free for non-commercial use" (teamviewr or irfanview for example) or "free if you make less than this much a year" (unity I think?). You can then have to different steps of payment, like free, basic, basic plus, premium, etc).
• brunobronosky 6y ago
  I 100% disagree. I hate service trials based on days. I can’t be bothered to properly evaluate DataDog in 30 days. I have a job to do. I set up the trial span a little time trying to learn the product. Get pulled of it. Come back to find it locked out. Trials should be measured in hours used, not days activated.
• marcusjt 6y ago
  It's so sad that micropayments are still not a thing after all these years, still think they would solve a huge range of problems including eliminating the need for many sites to be dependent upon ads
  • mceachen 6y ago
    Having personally worked on micropayment infrastructure (when dinosaurs were still roaming the earth) and thought about pricing and value and incentives, I suspect micropayments may actually disincentivize product use. Let's say your digital asset manager used per-view micropayments. Browsing through your photos would be soured, however slightly, by the cheapskate voice in your head, wouldn't it? What product would want their user experience to be saddled with that cloud? (Or am I just an extreme cheapskate?)
• htrp 6y ago
  Disagree... free tiers are crucial especially for conversion to enterprise (where the big bucks are)
• monkzero 6y ago
  80 percent of revenue comes from 20 percent of users. Rest 80 percent of users include those free plan users.
• amarghose 6y ago
  Gotta love black and white advice like this in a gray world We just added a free for life plan to ZenMaid.com after a lot of thought and effort Time will tell if it's right for but there's no way that it's a simple across the board as "Don't offer a free plan" Did get some good ideas from the article though, thanks for sharing OP For anyone interested I wrote in depth about our decision on my notion here: https://www.notion.so/ZenMaid-Should-Launch-a-Free-Plan-1b811f71e41a49fd9f233c9df2497d0e https://www.notion.so/ZenMaid-Should-Launch-a-Free-Plan-1b81...
  • caspar 6y ago
    Hey, unrelated, but you might want to check how your home page's moving headline behaves on different window sizes. For me at about 850px and 1470px, the words that change at the start of the headline cause the content below to pop up and down every few seconds (FF on Win).
    • amarghose 6y ago
      Thanks Caspar, will have the team take a look :-)
• bonfire 6y ago
  Why is this a .com site and not just a post on Medium? :-$
• Mikho 6y ago
  Looks like the author is not really a strategist and doesn't understand basics about business models and nature of services as also what exactly a CAC is, what loss leader is and what free means for engagement.