

Dividing free and paid features in "freemium" products  - vibhavs
http://www.cdixon.org/?p=700

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patio11
I'm a fan of sitting down, dividing free and paid _users_ in your market, and
then mapping the features to the offering such that folks will shake out where
you expect them to.

I don't explicitly say "Free for parents, $30 for teachers / Fortune 500
companies / parties" anywhere on my site, but that is essentially what the
15-card free trial cap does.

Your free users are not an undifferentiated mass with a static probability of
converting. They've got different needs. Figure out whose needs you can
satisfy while charging money for. Do it. Then, for folks you can't
conveniently monetize, figure out how you can derive business value from them
anyway.

(Stupidly simple: ask them to link to you in your signup mail. This won't take
you five seconds to implement, but it works, and you can use all the SEO help
you can get to attract more paying users.)

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joez
"A final thought: when in doubt, err on the side of putting more features on
the paid side of the divide. It’s easy to add features to the free side;
however, removing features from the free side is a recipe for trouble."

This is great insight and I hadn't though of it that way. I was leaning the
other way, thinking that you really want to get traction first. Then listen to
users and create new features you can charge for (if your current ones are not
generating enough conversions). Xobni is one example where they took their
search and made a better one for premium.

I really hope this thread gets some discussion. I feel like a lot of companies
know they want to do freemium (due to strong network effects, etc) but with a
'wait and see' approach on the free/premium split could be disaster.

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byoung2
Am I alone in thinking companies shouldn't hide that there is a paid version?
Take a look at Evernote (<http://evernote.com/>). The front page doesn't
mention that there is a free and a paid version except for a subtle "Premium"
link in the top right corner. I think they should be upfront with users and
show the features of the free and paid versions side by side.

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ensignavenger
Yeah, there is little that annoys me more than finding a product that
advertises neat, helpful features and I think it is free,
download/install/sign-up for it and come to find out they charge way more than
I'm willing to pay for it!

Evernote is a great example of this, too.

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idlewords
I have grown very fond of the idea of charging users a small signup fee to
join a freemium site. You can subtract this fee from the price of the paid
service, giving users an incentive to upgrade, and the model gives you several
other advantages:

\- every user in your DB is someone who thought your service was worth paying
for

\- you devote zero time to spam fighting

\- you can scale your site to handle medium-sized bursts in signups, rather
than having to handle large numbers of only-used-once user accounts created
whenever your site gets some publicity

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charliepark
I thought that was clever (and got you some good press) for Pinboard. Have you
seen that in use by other apps?

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idlewords
The Tarsnap guy (cperciva) who appears here sometimes runs a paid beta, which
is close in spirit. I haven't seen anyone else use a straight-up gatekeeping
fee before. That idea came from joshu.

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cperciva
_The Tarsnap guy (cperciva) who appears here sometimes runs a paid beta, which
is close in spirit._

I'm confused. How is tarsnap similar to charging a signup fee for an otherwise
free service?

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idlewords
If I'm not mistaken, you don't offer any kind of trial account? The similarity
is in launching a service that requires people to pay money up front before
they can use it.

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cperciva
Well... yes, ok. I guess I'm just old fashioned: I didn't see "not providing a
service for free" as being a particularly notable point. :-)

~~~
idlewords
Isn't it crazy?

