
Freemium Founders: Start Charging for Things Today – Tony Wright dot com - ctingom
http://www.tonywright.com/2010/freemium-founders-start-charging-for-things-today/
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bretpiatt
Freemium isn't a business model, it is a marketing plan. In some cases giving
away a subset of your product for free will cost you less per paying customer
acquired than any other method of advertising / sales.

If that isn't the case then you should stop giving away the service and spend
that capital on the other more profitable methods of acquiring customers.

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idlewords
There are some technical advantages to charging users from the outset that he
does not mention. A whole class of spam problems goes away, and your app
doesn't fill up with ghost accounts from people who signed up just to take a
look around, never to return.

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pvg
He doesn't but that's because he's talking about a model where you give away
something for free and charge for a better or more featureful version of it.

Charging everyone (even a nominal amount) from day zero is great but has a
narrow application - it mostly works when people perfectly understand what
your product does. In the case of pinboard, 'del.icio.us minus the suck plus
some other stuff'. The original del.icio.us would have got exactly nowhere
charging users from day 1.

~~~
idlewords
The original delicious wasn't trying to pursue a 'freemium' business model,
though. It was pursuing the 'grow big fast; get bought' business model, and
caught it.

I think for the lowly startup that is actually trying to extract money from
customers, extracting it right at the outset is an attractive choice, even if
it's a token amount just to filter out spammers and deadbeats.

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patio11
I'll confess to being totally confuzzled between people continuing to think
there is some huge, categorical difference between freemium and free trials,
which strikes me as a mostly semantic distinction. My confuzzlement aside, I
think there is probably an alternate causality for having godawful terrible
conversion from beta users. It is: "My business recruited beta users from
TechCrunch readers."

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pvg
There's a very real difference which is that free trials end and free use of
some feature subset does not. The difference isn't very big when the supposed
'free' product is so crippled it is next to useless compared to the pay
product. But that is just a (lousy) implementation choice. The free Flickr,
for instance, is a full-featured, perfectly usable photo sharing service.

~~~
_delirium
Traditional free trials aren't _always_ crippled; it used to actually be
standard in software that the free versions were useful in their own right,
and the rise of "crippleware" that was basically useless on its own was
initially fairly controversial in the shareware community.

I mean, Doom could've been seen as a "freemium" FPS, where you get the entire
FPS engine and several levels free, and only pay if you want to buy bonus
levels.

(Admittedly, that's software v. service, but in the same era, some BBSs ran on
a service-based freemium model as well, providing free access to anyone, but
letting users pay for certain features like extra download quotas or time
quotas.)

~~~
pvg
_Traditional free trials aren't always crippled_

I didn't say that. In fact free trials are often fully functional. But trials
expire. That makes them different from 'freemium'.

Shareware is a little different. There are at least two kinds - shareware that
is limited and its purpose is largely demonstration to entice you to buy the
full product. Doom was that kind of shareware, the stuff you paid for was not
the 'bonus levels' it was the actual game. There's also, less commonly,
shareware that's useful as is but certain extra features cost money. This is
the closest analogue to a 'freemium' web service.

The original question, though, was 'what's the difference between a free trial
and freemium'. And the answer remains the same, free trials expire, freemium
done right is a useful standalone product in its own right that you can use
for as long as you like.

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Groxx
Does "freemium" strike anyone else as "shareware"? Limited functionality until
paid for? Is it just an attempt to shrug off the bad image shareware has
acquired?

edit: no, really. I'm asking. Is there a conceptual difference, or is it just
using a new buzz-word to boost perceptions?

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patio11
Shareware doesn't have a bad image because developers ask for money. Shareware
has a bad image for numerous other reasons: perceived lack of professionalism
on part of developers, low quality, (largely inaccurate) association with
viral infections, a mindset determinedly stuck in 1996, and the fact that
shareware has no meaning to most of the people on the Internet.

I would never, ever say "shareware" within earshot of a customer. (Though
"freemium" doesn't sound to me like a customer-friendly word either.)

~~~
Groxx
_Shareware doesn't have a bad image because developers ask for money._

Wasn't aware I was implying it did. But it certainly does have that malware'd
crapware image (however incorrect it may be for each individual app. There's
plenty of good shareware out there).

