

Ask HN: Is a free plan worth it or not? Trying to figure out our pricing - markbao

Hey HN,<p>We (me and lleger) are Supportbreeze, and we're trying to figure out our plans for our launch next week. Our major contention is concerning free plans. We're debating whether or not we want to offer free plans at all. On one side, we see the value of offering a free plan: great entry vector, good promotional value, something that our competitors don't have, etc. However, on the other hand, we don't quite see the usefulness of a free plan on a business app, considering all plans come with a 30 day free trial and that it would affect the rest of our plans. We're concerned that it's a sinkhole that won't have any real benefit.<p>The main thing we think we'd lose by nixing the free plan is the influx of people that will simply start using our app instead of ignoring it if it were paid-only. Knowing that at some point they will need to start paying, is a trial enough enticement to sign up?<p>What are your thoughts? Should we abandon the free plan in light of our free trial period? Are free plans absolutely necessary, even for business apps? Thanks all!
======
wolfrom
First of all, I recommend reading Don't Just Roll the Dice if you haven't
already: [http://www.scribd.com/doc/25050778/Dont-Just-Roll-the-
Dice-P...](http://www.scribd.com/doc/25050778/Dont-Just-Roll-the-Dice-Pricing-
Techniques)

This was talked about earlier today
(<http://news.ycombinator.com/item?id=1613852>). Unless your app requires a
whole pile of non-paying users for network effects, free accounts don't seem
to bring in much value. If you want customers who are going to pay at some
point in the future, trials seem to make more sense than perpetually free
versions.

You could of course try running without a free plan to start, and add one if
no one's taking you up on the free trials. But for those people who use the
free trial but walk away without signing up, I doubt a free version would have
resulted in a future conversion from them. More users equals more support;
free accounts could destroy your business.

~~~
mariorz
link that actually lets you download the pdf
[http://downloads.businessofsoftware.org/dontjustrollthedice....](http://downloads.businessofsoftware.org/dontjustrollthedice.pdf)

------
willheim
Sounds like a BtoB venture. Who are your target clients? If they're well
funded/profitable/high end then all you need is the 30 day refund program. If
they're bootstrapped start-ups who need to pinch every dime then a limited
free account is necessary and then aim for the up-sell.

I struggled with this question myself as all the advice I got was for there to
be a free account. You know what? I don't like free. It doesn't make sense in
business. It may work with Youtube (ad sponsored and still loses a boatload of
money but G has deep pockets) but we've seen many who tried free ended up
going paid or free and limited (Hootsuite just recently). There may be nothing
worse for your business than going paid and limiting what people had come to
expect for free (seen this time and again).

Besides, people take advantage of free. They demand support and effort with
nothing in return. If you fail to support them well you risk a bad rep. A bad
rep will sink your business. However, if you are paid from the start, turn out
a great product, and support your clients well, you'll earn a great rep which
in turn builds your business.

Go with paid from the start and have a 30 day refund policy. That way people
can try it all out, you can find out exactly what their needs are support-
wise, and if any ask for the refund to leave you will know exactly why and can
address those issues.

It's time to end "free".

------
kevinelliott
Make a free plan that is very restrictive. You want people to be able to
quickly assess whether or not the tool is useful to them. People are use to
being able to trial software first (it's been done for years now). Allow them
to try all the features, but not have any ability to use it for real
production use. So let them accept 5 support requests, perhaps.

Alternatively, if you don't, you have to have great screenshots and
screencasts. Chances are you will risk losing a lot of potential clients
otherwise.

~~~
mvalle
How about having a dummy-demo. Basically give the user a taste of the UI
without the functionality, ie. just send the user a static html page to get a
feel of the interface and how it would work. Of course, it depends on what you
are offering.

------
AmberShah
Free plans will likely not give you all the benefits you think they will:
[http://www.softwarebyrob.com/2010/08/18/why-free-plans-
dont-...](http://www.softwarebyrob.com/2010/08/18/why-free-plans-dont-work/)

------
thaumaturgy
My margins are always really tight. I rarely part with money willingly.

When crossbrowsertesting.com announced their launch a while back, I used their
free service just enough to become convinced that supporting them was worth
the monthly charge; I've been a paid user ever since, even though I only use
it occasionally.

So, I think that if you offer a compelling service, something that provides
more value to your customers than it costs them, then a free plan should
pretty much only be considered a "demo" of your service. If you've got a good
product, then even misers like me will pay for it.

edit: Oh, and also: for a service I'm working on right now, I've decided to
use "early adopter" pricing. It works like this: pricing starts at $X / month;
for every new subscriber, all previous subscribers receive a $.01/month
discount. If or when the monthly prices ever drop, it will drop by the same
amount for all subscribers. So, the sooner someone signs up, the sooner
they'll get the service for $5/month -- or even free. I don't know if it'll
work, but there it is.

------
amccloud
I can't see why you shouldn't start off with a free plan available. Like you
said, a free account is a great poe.

If you're having low conversion rates from free to premium accounts, you could
always experiment with hiding the free account registration -
<http://basecamphq.com/signup> \- or completely removing it. Ruben Gamez has a
wonderful write up of his experience on this topic
[http://www.softwarebyrob.com/2010/08/18/why-free-plans-
dont-...](http://www.softwarebyrob.com/2010/08/18/why-free-plans-dont-work/)

------
edanm
How much beta-testing have you done? I'd work with a free plan at first,
simply because the value of your first 10-100 customers isn't the money they
bring in; it's the information you learn about your own product.

On the other hand, this is an easily reversible decision either way, but
starting paid-only is probably easier to change. In the worst case that nobody
notices you, you can always add in a free account in a few weeks.

------
blister
In all honesty, if you don't have a free plan, you will never get my business.
There are way too many apps that I love to fully support financially.

Especially for a business app. My product
<shamelessplug>[http://userping.com</shamelessplug>](http://userping.com</shamelessplug>);
is my first bootstrapped company, and while I'd love to be profitable enough
to fully support all the great apps I've come to depend on, right now we're
broke, so I have to choose between using your app or paying for another month
of hosting. Pretty simple decision.

So, my vote is always for a free option. I think you should feel free to
really lock it down and restrict the offerings because anyone who can't afford
to pay for a service probably doesn't need 200 user accounts. They probably
only need one or two, which should theoretically not cost you very much.

That's my $0.02. I very rarely even try services with a 30-day free trial. I'd
hate to get hooked on something that is going to rape my tight budget.

~~~
revorad
_if you don't have a free plan, you will never get my business._

That made me chuckle. Unless you _pay_ for a product, you are _not_ giving him
any business.

Don't get me wrong; I can totally see where you are coming from. I'm pretty
much in the same situation. However, you and I are clearly not Mark's target
customers, so it's a bit unhelpful to ask him for a freebie. How does it help
him?

To make money, one needs to sell to people who can pay. There are plenty of
businesses out there, who will pay money to solve their problems. Broke
startups selling free apps to other broke startups is not a business model.

~~~
StavrosK
You are very much correct. There are users, and there are customers. Listen to
your customers. Users matter too, but "please give me this feature for free,
because I might sign up down the line" isn't cutting it...

------
Mc_Big_G
Go with a trial instead of a free plan. If your users find value in your
service, they'll buy. Put a feedback form on the page that notifies them their
trial has ended. If they don't pay, they might complain and give you feedback.

Also, you can collect emails with a free/trial plan, so use that to get
feedback and/or try to sell to them again after you pivot on the initial
feedback.

------
revorad
If your app is good enough to charge for any features at all, then you should
probably just go ahead with paid plans with free trials. You can make it
really cheap for early customers (and keep it cheap for life for them) and
slowly increase the price for new customers - call it the cheapium model.

The value of initial users is finding out what's actually useful to them (what
they would pay for) and any major bugs/issues in your product. But you have to
be careful you are not listening to the wrong users (who never intend to buy
anything from you).

You are selling to businesses, so you probably need to focus more on direct
and ad-based selling rather than going "viral" among the wrong userbase.

------
Tichy
I like the approach of GitHub: free hosting for open source projects. Maybe
something similar could work for business apps - if not software related, free
hosting for nonprofits.

~~~
philwelch
That's a little different. GitHub's "free hosting for open source" just means
"free hosting for public repos". They never actually verify that the code is
licensed in any sensible way, whereas others (Google Code I think) actually
requires you to select an open source license.

In short, GitHub doesn't at all verify open source licensing, they just allow
unlimited free accounts if you accept _de facto_ open source. "Free hosting
for nonprofits" requires actually verifying (or requiring the user to assert)
nonprofit status, which is a lot more difficult.

~~~
StavrosK
That's a killer feature for github, because it essentially means that they
have no free model. If I'm making a company project and want to collaborate
using github, there is _zero_ choice. But, since I'm already familiar with how
great it is, due to the free public repos, I'm more likely to buy.

Sounds like they have their model cut out perfectly.

------
vaksel
how about collecting a credit card, and advertising that you won't charge them
for a month?

this way they get 1 month free, and you get to add customers into the funnel.

~~~
adamhowell
Best advice I've heard on fixed-length trials:

"[A] fixed-length trial discourages users from using your product - why invest
time & effort in something that will disappear in 30 days[?]"

~~~
cvinson
This is bad advice. It discourages only the people that do not find value in
your app to eventually pay.

I've been running a 30 day trial with my app since 2003, we've grown double
digits every year.

------
dbrannan
In our experience (examprofessor.com) setting more severe limits to our free
plan boosted paid sales 2x, which was very welcome. We started with a free
plan, one exam, unlimited students. Later, we limited the free plan to one
exam w/ 10 students and many of our clients jumped up to a paid plan.

I think if you do have a free plan, seriously limit features in a manner that
encourages clients to upgrade.

------
adamhowell
The only thing I have to add to this discussion is that not having a free plan
puts more pressure on your marketing pages.

You'll need to try that much harder to make sure your homepage, tour, etc. are
as simple and straight-forward to understand as possible, because people won't
be making up for where your marketing pages are lacking by signing up and
trying things out for themselves.

------
lleger
Thanks for all the responses guys. We've decided to drop the free plan in
light of the prescient advice herein.

------
alexyim
It's easier to switch from paid to free than otherwise.

