3 ms·

Slack was the "aha" for me on understanding an underlying mechanism here for freemium->paid. Freemium needs to cover trialing up until the point of an adoptio

Slack was the "aha" for me on understanding an underlying mechanism here for freemium->paid. Freemium needs to cover trialing up until the point of an adoption decision. However, the adoption decision isn't about continuing to use the tool. We're in a 'prosumer' world, so the purchasing decision flip is instead about when a user both operationally and mentally phases from b2c -> b2b, meaning changes both in how they're using it and the value they're noticing. Ex: In Slack's case, it is a team liking it enough that they start having substantive conversations, and when prompted, view paying for a search history to be more than reasonable for a work environment. If they aren't getting commercial value from those comms, they can keep using for free until they do. Ex: In ^^^ Notion's case, a 1000 block limit may not signify anyone cares beyond entertainment value. But as soon as you want to do secure sharing with colleagues for a lot of work, you're probably doing valuable stuff, and are fine paying as long as reasonable. Ex: Twilio is ~free for developers as they prove value, but org pays when it gets real. So it is less about trialing -> addicted, and more about trialing -> committed & appreciates generated work value. The lazy version of this is "addicted individual -> addicted team", so I expect pricing models to roughly follow that. Sort of like a modern version of "Enterprise means SSO so charge more for that", except now more closely aligned with utilization... which is a good thing.

mattbuilds 6y ago
Slack is the one that clicked for me as well. I used it with some friends just to try it out. Then at work our small team used the free version, without anyone's permission, just to play around and see how we liked it. Turns out another team did the same thing and we decided to merge the workspaces. Then some upper level people got wind, saw it was going well, and soon after the entire 200 person company was on it. Not saying our team was responsible for the purchase, but it clearly helped Slack gain a foothold as "a tool we use".
naravara 6y ago
To build off this a little more, another pattern I see pretty often is for people to pilot things on personal projects and then, when they come on board a team, suggest their favored personal toolkits at work. Simply creating the familiarity with the tool can help enormously in this case, even if it would probably take a couple of years or more to really pay dividends. I've found this to especially be the case with new hires who are fresh out of college or graduate school. They have experience setting up platforms for the group projects they do in school and they can often work pretty well for a small team if implemented with intention. It's not actually so different from Adobe's strategy of somewhat turning a blind-eye to piracy from college students knowing that when they graduate into being design professionals they'll have business expenses they're willing to splurge with.
lmeyerov 6y ago
one more I liked here: early GitHub free for public / oss projects, pay for private - most personal projs and oss are covered: like slack, that supports successful viral collab! - but as soon as you are doing commercial work and want that privacy (eg, you are being paid to do it), ok to charge a bit they eventually got big enough that they could wait even longer to charge. squeezing a few $/mo from tiny accounts doesn't matter if that causes churn before bigger adoption. for a co that straddles both smb + enterprise (1% of customers are 50% of revenue?), that is a suggestive trend for prosumer freemium another good article here is Greylock's Unit of Value essay

mattbuilds 6y ago

Slack is the one that clicked for me as well. I used it with some friends just to try it out. Then at work our small team used the free version, without anyone's permission, just to play around and see how we liked it. Turns out another team did the same thing and we decided to merge the workspaces. Then some upper level people got wind, saw it was going well, and soon after the entire 200 person company was on it. Not saying our team was responsible for the purchase, but it clearly helped Slack gain a foothold as "a tool we use".

naravara 6y ago

To build off this a little more, another pattern I see pretty often is for people to pilot things on personal projects and then, when they come on board a team, suggest their favored personal toolkits at work. Simply creating the familiarity with the tool can help enormously in this case, even if it would probably take a couple of years or more to really pay dividends. I've found this to especially be the case with new hires who are fresh out of college or graduate school. They have experience setting up platforms for the group projects they do in school and they can often work pretty well for a small team if implemented with intention. It's not actually so different from Adobe's strategy of somewhat turning a blind-eye to piracy from college students knowing that when they graduate into being design professionals they'll have business expenses they're willing to splurge with.

lmeyerov 6y ago

one more I liked here: early GitHub free for public / oss projects, pay for private - most personal projs and oss are covered: like slack, that supports successful viral collab! - but as soon as you are doing commercial work and want that privacy (eg, you are being paid to do it), ok to charge a bit they eventually got big enough that they could wait even longer to charge. squeezing a few $/mo from tiny accounts doesn't matter if that causes churn before bigger adoption. for a co that straddles both smb + enterprise (1% of customers are 50% of revenue?), that is a suggestive trend for prosumer freemium another good article here is Greylock's Unit of Value essay