
Why we ditched our free plan - PhilipA
http://blog.trak.io/freemium-vs-free-why-we-ditched-our-free-plan/
======
gabemart
I would suggest that you don't call your free users "freeloaders". That's a
pejorative term that suggests you're being taken advantage of. You offered
your product for free, they took you up on the offer. It's fine that you've
decided it's better for your business to cease offering the free tier, but
it's unprofessional to use a pejorative to describe customers who accepted
your offer of a free product.

~~~
liamgooding
Hey Gabemart, original author here.

I understand your objection.

The term 'freeloader' was used because they're taking stuff for free with no
expectation to pay anything in the future.

Also, an article that attracts discussion is a good thing, right? :)

[edited]

~~~
berkay
An article attracts discussion is good? sure. I did not know about trak.io,
now I do. The attitude in the article towards "freeloaders"? not so good. I
won't argue whether it is better or not to have a freemium for "your" company.
But commitment should not be broken so nonchalantly. Did you at least
grandfather beta customers to a free plan? If not, you did a bait and switch,
and that does not make me wanna do business with you (and I would have become
a paying customer).

~~~
dzabriskie
Yep, it's bait and switch, their "Priority Access Beta email" promised a free
plan [0]. I actually _paid_ $29 for priority access to their beta, but never
got around to installing their code; after seeing this I don't plan on it.

[0] [http://i.imgur.com/cLSxw5m.png](http://i.imgur.com/cLSxw5m.png)

------
rsobers
Wow, this is the absolute wrong way to ditch a free plan. Holy shit!

The post comes off really condescending towards the beta users that helped get
the product off the ground.

Sure, the business lessons are valid and helpful (despite being a complete
regurgitation of advice espoused by people like Rob Walling and Patrick
McKenzie), but IMO they don't belong in the same post that tells a cohort of
your very first users:

"Yeah, we needed you in the beginning to test our idea and product, but now
you're a burden. Get lost."

Grandfather your free plan beta customers in. It's the right thing to do. The
free plan, IIRC, had a really low ceiling in the amount of data that could be
collected--like 150 people or something silly.

Lessons for SaaS founders: 1.) Don't have a free plan. 2.) Don't set an
expectation that there will be a free plan to get more early testers. 3.)
Don't ever refer to any of your customers (free or not) like they're a number
in a spreadsheet.

(Is it just me, or is the trak.io blog theme eerily similar to Signal v.
Noise?)

~~~
liamgooding
Hey, original author here.

Haha Thanks for the point of view - yeah it's a big splash but there was no
hiding the fact so we just wanted to be totally transparent about it.

So far the replies from all our beta users has been exactly what we hoped for
(expected), either "Thanks for the honesty" or "Cool, we were just checking it
out, we're not in a position to need something like this now" or a few "Yeah
screw you guys, delete my account I'm not using you anymore".

I understand a lot of your points, but I strongly disagree that we're
regurgitating other peoples advice. This is taken exactly from our
experiences.

And we're not telling anyone to get lost. We're explaining why we had to
evolve and change our assumptions. If we carried the burden of every mistake
we'd made as a startup, within a year we'd be so heavy we wouldn't be able to
move anywhere!!!

(Oh and the blog theme is following a trend of about 20+ major startup blogs
who switched to a typography led, single column design. We rebuilt the design
a few months ago and tried to make it as much about the content as possible. I
personally think the end goal was more like eerily similar to reading an
eBook?)

~~~
rsobers
Why don't you grandfather in your current free users and shut off the plan?
That seems totally fair.

At present, it seems like bait and switch. You say it yourself in the post:

"One of the most prominent details we emphasized to everyone we spoke to in
the early days of Trak.io was that we would offer a super generous Free plan."

So you got people to try and test your product based on this attractive
premise, and now the ones who are perhaps too early stage to switch to a paid
plan are stuck. With an analytics app, switching costs are pretty high.

Of course you have the ability to iterate, increase prices, etc.--and you
should--I just think it should be done with a little more tact.

------
prof_hobart
To me it looks like the mistake it looks like you made wasn't offering a free
product. It was offering ".. a super generous Free plan. A free plan so
generous that an average funded startup would very rarely outgrow it.".

One reason for giving away free accounts is that lone hobby developers can
very quickly become founders of rather bigger startups. These lone hobby
developers are likely to only be interested in free - $9/month is a fairly big
investment for someone just doing a hobby. The second it becomes a real
business, on the other hand, that $9 is likely to look quite different. On a
very note, I work for a pretty large organisation and have quite a lot of
input in product choices. I also tinker around with stuff in my spare time. I
definitely won't be paying you $9/month for my tinkering, and so I'll never
get to know if it's something I'd want to recommend for consideration for my
organisation. And I doubt I'm unique in this kind of position.

The trick is to make the free stuff only good enough for those people who
would never pay for it anyway (allowing people who could become customers in
the future a chance to get used to your product), and make stuff that would be
critical to any real user - such as access to support, ability to support
multiple users or whatever - only available to your paying customers.
Otherwise, you run the risk of chasing off a lot of potential future business.

~~~
bitJericho
Zarafa springs to my mind.

------
SethMurphy
Google analytics was originally Urchin, and If I remember correctly it was
49.95 a month. I heard about it from a friend and started paying for it. A few
months later Google bought them and it was suddenly free. It felt like picking
a good stock and the feeling of going from paid to free was elating. I say
this not as a well actually (ironically it is), but to support that if you
have a good product people will pay and will recommend it to friends. Free is
only good if the number of users on your platform is of benefit to you. In
your case, I think it's not and you are probably making the right choice by
focusing on both product development, with a little revenue on the side from
the start (or at least early). Good luck.

~~~
liamgooding
Hey Seth, original author here.

Thanks for the deeper explanation into the history or Urchin, and also, that
when it was a paid product you were still happy to recommend it. Thats exactly
what we're hoping to get at Trak.io - yeah it's a paid product, but it brings
a damn load more value to your business than the couple of bucks we're asking
for a month.

Thanks for the good wishes too, I love how supportive HN can be!

------
pingburg
I've respected the HN community for a long time. This was a place where ideas
could be shared and unlike many sites that were just an echo-chamber for a
particular point of view, things were debated here on a much higher,
respectful level. Lately, however, if you don't 'fit' a particular worldview,
comments are down voted instead of being debated.

Case in point. Here a company has provided insight into why they don't believe
their product fits with the freemium model. This is so against dogma and
current ideology that it's being down voted not on its merits but on the
audacity to have a different opinion.

~~~
evgen
I think they are mostly being downvoted because they are apparently real
dicks. This "I made a mistake so there is obviously a problem with you"
attitude they display here and in the post in question shows a level of
immaturity that puts them in the running for d-bag company of the year.

~~~
liamgooding
Seems a harsh, unfair and hasty assessment considering you've never met anyone
in our team or spoken to any of our users.... :-/

~~~
mbrameld
You control the public's perception of your company. You chose to write this
post and put it out there, but you feel it's unfair for people to judge your
company based on what you've written? That seems a little naive.

------
tigroferoce
Do you realise that in the upper right corner of the page you linked there a
link titled "Try Track.io For Free"?

~~~
liamgooding
Original author here.

Yeah but the subtle wording in that CTA is "Try". We have a totally free, no
credit card required, 30 day free trial :-) Something which I probably need to
point out in my original article, my bad

~~~
rhizome
It sounds like you're making a lot of mistakes from not thinking things
through. Do you really care about your business?

~~~
Silhouette
_Do you really care about your business?_

Right now, if I were looking for a service like this for one of my sites, I'd
be more concerned about whether they care about _my_ business. They sure don't
look like it, with their apparent willingness to dump early subscribers when
they were no longer convenient and to make potentially misleading or even
downright deceptive claims in their marketing to attract new ones. :-(

------
AhtiK
"After introducing our $29 Priority Access program, offering Beta waiting list
subscribers an instant queue jump, we started to see a huge shift in our
customer development. Features that we’d previously emphasized because
everyone said they were ‘cool’ no longer came up in conversations."

This "Priority Access Program" is pure genius for filtering and validation! I
haven't seen that much outgoing method before but I sure believe it can work
our great. Absolutely brilliant. Can you share your conversion rate for
Priority Access? (PriorityAccessCount/QueueSize?)

~~~
liamgooding
Thanks!

I did a full write up (with data correct at that time) as a guest post on
Sixteen Ventures blog:

[http://sixteenventures.com/pre-launch-growth-
hacking](http://sixteenventures.com/pre-launch-growth-hacking)

TLDR: here's the slideshare version, much shorter:

[http://www.slideshare.net/liamgooding/growth-hacking-
prelaun...](http://www.slideshare.net/liamgooding/growth-hacking-prelaunch-
revenue-case-study)

~~~
luckystrike
Could you please remove the obnoxious photo of the woman's ass on Slide #5?
You can probably spread the "Our product is sexy" message in a much better
way.

These kind of images make a lot of females in the programming community feel
uncomfortable and it's better if we don't have them in any work related
presentations.

------
JoeAltmaier
We have a free plan, but its limited. Ours is a communications product
(sococo.com) and the free plan supports a small number of simultaneous users.
Paid plans increase that limit.

We track plans carefully. A certain fraction stays in the free plan, keeps
using it regularly, and that's fine. But another predictable fraction moves
up. We can pretty much tell which fraction that will be - there's a critical
mass of usage that takes off.

So our free plan is a money maker - every month it grows our revenue stream.
We'll never get rid of it.

------
BerislavLopac
As the saying goes, if a product is free then you are the product. In other
words, if you can't sell your users, you have to charge them.

~~~
microcolonel
Of course, in simplifying it this far, you run the risk of losing some
subtleties of the situation.

Users can be valuable without offering net revenue on their own, this is how
Github stays afloat, it's at the core of their business model.

~~~
liamgooding
Interesting point on Github!

In their case, it's like "Free for when you'r working on your own personal
passion stuff, but it's paid when you go into the office and hack on your
companies private code". The huge community and discussion is essentially a
massive funnel, users already have an account, etc.

There's actually some potential parallels with Trak.io and I'm definitely
going to keep Github on my whiteboard as a reminder why Freemium _can_ work if
you're a tool aimed at developers

~~~
microcolonel
Right, having a look at trak.io(had no idea you existed) I can say that mass
freemium may not be the best business model for you. Although you could try
offering some separate service adjunct to trak which would offer value to
everyone, with minimal cost to yourself at any scale.

------
nsxwolf
Charging money is an awesome business model.

------
jwblackwell
Whether or not you should have a free plan really depends on your product.

In the case of trak.io, it's clear that the costs per user are too high for
them to do it. Google Analytics can do it because it's backed by a big
business and they can fund it. Many startups don't have this choice.

I'd just be wary of ditching a free plan. It's a great way to reach a lot of
people with relatively little effort, just be careful you can support them
with your business model.

------
marincounty
Why not just start charging? If people can't live without your app, won't they
just buy it? I'm glad I read your blog;it reaffirmed an old saying. The more
someone tries to sell their product, or explain how brilliant they are--the
more skeptical I become. I don't know why this blog irritated me, but this
company made it to HN; which just might be better than charging the Free
Loaders.

~~~
liamgooding
We do charge now.

Everyone who was in the private Beta sees a "nagware" popup explaining our
switch to a paid service, with options to also "Skip" and continue evaluating
the product, or to email us to explain why they need a free plan

------
borski
While this may work for some, be careful of listening to advice on the
internet. I have read dozens of articles like this.

For us, to be totally honest, our conversion went way down when we introduced
the 30-day trial. When we had a free plan (which we do again), our conversion
was way higher, because I suppose it took >30 days for people to truly see the
value in the product. So for us, a free plan is what worked best.

------
danielweber
"Free users require the most support" is something I have experienced. A co-
founder gave a free copy of our more-than-one-thousand-dollar software to a
colleague, who gave it to one of her students, who pestered us about why it
wouldn't work on his VM.

------
robobro
This is an advertisement.

------
andrew_wc_brown
They're splash video has the same chords as Wrecking Ball.

~~~
liamgooding
hehe you won the internet for spotting that! :D

I originally found the free audio on a royalty free site. The video is very
outdated now compared to the product, but at the time all we had were
photoshop mockups of the UI and a vision! :D

Anyone who has used a mac before will spot that it's made from a ton of
panning around images in iMove. Guilty as charged... :-P

------
notastartup
I think this article has merit but it fails to consider that free users may
eventually upgrade to a paying account.

Would it have been better to not offer a free plan to begin with? Instead have
a 14 day money back guarantee with each plan. People with money and with
intention will only use the product. If they don't like it they will probably
ask for a refund but not many people actually do in reality because of the
hassle.

~~~
spacesword
They have a 30 day free trial still.

