When there's a free plan, my usual activity goes like:
But when I'm paying, it's much different. Not to say that all services shouldn't offer anything free. But at least in my case, charging is doing both of us good. And it also ensures that company will have some sort of revenue to live on and not die as a freemium company!
When any website or app begins charging, or throwing ads out, there's always an outcry from the users that weren't use to it. Sure being free will probably make any startup grow faster, but to make your users happy...charge, have ads, or AT THE LEAST tell them that you plan to charge later, or aim for acquisition like Instagram :)
The view you present shows no pride in ownership, quantity over quality, and it still works though. As Seen On TV products are an example...sell cheap stuff so low, that it's not worth returning. Cereal and Chips and the packaging model is another successful example.
However, I still say, just like coding, there is an art in a business model, and the more dedication any entrepreneur spends on their implementation will determine their success.
I wonder how you got that from my comment? All I said is that in a business, the focus is on profiting. Code takes a back seat, because perfect code ever made anyone money. Though I'm not saying to develop a shitty code base. But in reality, the software is merely the product, and not the business. I take a lot of pride in my work, and do not ship/sell products built on top of bad code. But I do know that the focus is on the business side. That's why I'm able to successfully bootstrap while others fail with millions of funding. (:
Myspace failed because it did not adapt to the market. They got lazy.
>in a business, the focus is on profiting
This is what I agree with you. Websites/Apps are usually projects before they are cultivated into a businesses. Maybe it's semantics, but I think "profits," conveys the wrong message in your vague comment earlier.
If any developer wants to monetize their product (their code), I think what you're trying to convey (based on your response) is that much thought needs to go into the efficiency and risk/reward ratio. How much will your distribution cost? How efficient is Nginx vs Apache?
Basically, business practices will result in less cost (risk) for the project that turns into a business. Efficiency of the business model will result in the lowest costs for the project/business, to the point where profit is feasible.
No, that's not what I meant. Monetizing and profits are two different things.
This doesn't seem to match with "For example, Freemium works really well when your user IS the product." Such services, like the Facebook example he cites, are free, not freemium. Right?
1. Give it away for free for a long period to build a user base, get feedback and iterate.
2. After a while, switch to paid only for all new users. The old users continue for free so no-one has a right to get annoyed.
Seems a pretty good option to me.
We all know that it works in exceptional cases. But many times when I see it, it reminds me of an old Saturday night live skit about "the change store" that provides change for any amount of money without taking a fee. When somebody inquires how they make they're money the owner replies "volume!"
There is a flow-on effect in the way consumers interact with a service provider, too: per account, you'll receive more complaints from free users than paying ones; vice-versa, more constructive suggestions from paying users than non-paying users. This result is explained as a choice-supportive response [look it up; "the tendency to retroactively ascribe more positive attributes to a choice invested into"], since the opposite behaviour would be a source of cognitive dissonance. It can be a source of frustration to paying users that their suggestions/requests are not then more highly valued by the service provider.
This is SOOOOOO true! It's because monetary value comes with commitment!
If I pay for a product, I will use it to the fullest bang of my buck (example: we go around our house making sure we fill up our trash can on trash day). If I get a product for free, the engagement level, my interest, my commitment...it's not on par (example: trying an app in the app store that's free and deleting it because there's a bug, not wanting for a new release).
At kenHub - we build a platform for learning anatomy. It makes students' lives easier and they can be more effective in their studies. As much as we'd like to give it away for free to all students, we need to make a living, and we need money to improve our products. Luckily, our audience seems to see the value and are willing to pay for it.
I think it boils down to the utility of your product, to students, grandmothers, or any other segment.
Even when Facebook started, it was hemorrhaging debt in the beginning...and eventually, they went to ads (even with the outcry). User's usually hate change, each product is different, so try to constantly ruminate a method or revenue (maybe even for select users in your demographic).
There are so many web services are coming out everyday, people cannot just find it very suitable for them and cannot find whether it's good enough.
Trial period is good but it is not as good as freemium.