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Ask HN: How do you compete with “free”?
5 points by jd_illa on Sept 22, 2022 | hide | past | favorite | 20 comments
Saw a new scheduling product launch on PH today, which basically offers a free version of Calendly's paid features.

Founders - how do you think about "free" product launches? I'm testing an idea now, would like to launch it along with pricing so I can validate the pricing/willingness to pay along with the idea, but feel like there's a lot of pressure to launch new products for "free".

Thoughts?




I find it is very rare that I actually complete a free trial, particularly for something I use for software development at work.

(1) It takes a lot of effort, maybe one day to one week, to really evaluate a product and know if it is worth it.

(2) That evaluation will feel like wasted time if, at the end, I find the product isn't worthwhile

(3) It will also feel like wasted time if I decide I like it but my employer decides not to pay for it.

If somebody gets paid $100,000 a year and spends a week evaluating something, the "free" trial costs $2000.

Thus I am not a believer in free trials.


>If somebody gets paid $100,000 a year and spends a week evaluating something, the "free" trial costs $2000.

But out of curiosity, what is the alternative?

Blindly buying (or subscribing to) something because it looks cool in a 5 minute overview of its features?

And how would you convince your employer to pay for it?


If it takes you 40 work hours to evaluate a product then it must be a tool that is central to your workflow, but in that case you're going to have to evaluate it somehow whether, it's free, free trial or paid.


Yes, and that has all sorts of implications for why marketing can be so hard.

Imagine that somebody expects to evaluate 4 products, either because the first 3 won't make the cut, or because they won't feel like they did enough "due diligence".

It may be a safer bet to develop something in house than to spend a lot of time evaluating alternatives. All of the alternative products have a lot more development time in them, but odds are you don't need all the features those products have, UI refinement, etc. You don't have to worry that a vendor will be bought by Google.


Ah, yes, I see what you mean. That's probably one reason software developers (at least experienced ones) tend not to make good customers.


I'm not a "founder" in any real sense of the word but my feeling is that it depends on what market you're targeting. If your goal is to become a billion dollar unicorn, then yeah it's going to be tough to beat free because you're going to need a huge number of users. On the other hand if you're OK with building a small sustainable business to support yourself, family and maybe a small number of employees then I think it's possible to target niche markets of people who are willing to pay for a high quality, well designed product that does exactly what they need.

For now this is just my working hypothesis, I'm still far from being in a position to test it.


If ever there were a premature optimization...

No one's calibrating their prototype roll-out according to how big or small they think they're going to be. That'd be a bit like turning down a soap commercial because it'll be embarrassing when you join the MCU, although to be fair, an unknown Gwyneth Paltrow did turn down "Cool as Ice" (1991).


> No one's calibrating their prototype roll-out according to how big or small they think they're going to be.

I don't think that statement is true at all. My impression (mostly from being a long-time reader of HN) is that VC's are primarily/only interested in investing in startups that have some chance of becoming billion dollar unicorns, so if you're looking to get VC funds you pretty much have to set your goals at that level. Some little web app with 10000 paying customers will never get you there, but it might be enough to make a decent living.


definitely makes sense. even if you intend to become a paid product, it's hard to figure out the right pricing in the early days.


Launching a free (often restricted by number of users or "beta" for a limited time) version is a way to get users to experience your product and possibly get hooked.

It makes the most sense where you expect your actual hosting costs to be symbolic for small-scale users and hope to earn from bigger customers.

This practice has been present since the dawn of (software) time — even Microsoft never really bothered with private illegal copies of Windows (or DOS), knowing it will get future customers into the Windows world and they'll want Windows at work too.

However, going straight up with the paid model has been there forever as well: it mostly depends on your individual market evaluation and existing entrentchment.


Nothing beats free. Stallman wrote a great essay on this called "Who does that server really serve?", decrying the redundancy and ultimate futility of building software-as-a-service. You will always be at-risk of being undercut by a free alternative. Selling software is an anti-pattern of computing, you have every right to be afraid of cheaper/better products wrecking your shop.

https://www.gnu.org/philosophy/who-does-that-server-really-s...


In the same frustrating sense that one broken down car on the highway can ruin everyone's commute, one vendor giving away free product can ruin a market. You can blame Stallman, Torvalds, the Java consortium, etc., who realized the only way to compete against Microsoft was price, or more precisely the lack of it.

As painful as Microsoft's dominance was, the era of shrinked-wrapped cdroms represented a more honest time when what you got was commensurate to what you paid. Now the only game in town is dangling the carrot and selling your customers' info to advertisers.


I simply refuse to play their game (free/race to the bottom). This isn't always a viable strategy (see stable diffusion vs OpenAI), but when I find myself in one of these situations I shoot for quality instead. The customers will pay, but I will do everything I can to give them a higher quality experience, whatever that entails.


what are your takeaways from stable diffusion vs. Open I?


In the case of Stable Diffusion vs OpenAI, a model was released to the public for anyone on earth to experiment with, creating a diverse ecosystem of ideas. There are thousands of use cases now that are being tested live on the open market -- a number that any single company would find incredibly difficult to compete with. Most ideas won't gain any footing, but some will. By the time those ideas gain popularity, OpenAI will only be left to copy them.

This is specifically with regards to Stable Diffusion vs DALL-E. I think OpenAI has plenty of breathing room when it comes to innovation in the broader spectrum of new AI applications. I think there might be some interesting discussions here regarding when it's a good idea to provide a cheap and available version of your offering vs when to provide a quality offering. Both definitely have their place in the market and can result in superior products, but right now to me it's not clear where that distinction should be drawn.


super interesting - thank you!


The only thing that beats 'free' is 'quality'.

Your product has to be so good that people will clamour to buy it.

If your product's quality is 'meh', 'free' will beat that every time.


This is a bit business-model dependent.

If you don't intend for your product to be free for the rest of its lifetime, don't launch it as free.


yeah, i generally agree with this advice. Although testing pricing is its own challenge, so can be hard to validate demand + pricing in the same launch.


With different adjectives = "good", "stable", and "supported" are three fairly effective ones.




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