
The Freemium Company LifeCycle Challenge  - peter123
http://blogmaverick.com/2009/07/05/the-freemium-company-lifecycle-challenge/
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timf
_"There will always be a company that replaces you. At some point your
BlackSwan competitor will appear and they will kick your ass. Their product
will be better or more interesting or just better marketed than yours, and it
also will be free."_

I don't understand why this argument is being specifically tied to freemium
models, it sounds like a normal threat in business no matter what your revenue
model is like.

~~~
pj
I think there is the impression that if your service is free, then no one can
undercut you so the cheaper competitor has been eliminated.

But that has made freemium companies feel safe. Mark's point is that you still
have competition on other fronts _besides_ price: interestingness, marketing,
etc.

~~~
timf
> But that has made freemium companies feel safe

I did not realize that there was this special feeling of safety with freemium
services I guess... why would anyone feel safe from competitors? In any
business you have a revenue model, someone can usually copy that and compete
on all the other factors... no matter if your product's price (something very
different than the revenue model) is zero or non-zero.

Freemium or purely-advertising-based companies should even worry about
competitors that release _for pay_ services, price is not the be all and end
all of why a customer engages. And since we're strictly talking about
"freemium," that implies a for-pay option. The new competitor could be a for-
pay-only service but have an excellent advertising campaign (or excellent
product + the word of mouth that it will generate) that simply leads more
paying customers to the buy button.

~~~
pj
Yeah, that's exactly the point Mark was making in his blog.

