Hacker News new | comments | show | ask | jobs | submit login
Ask HN: What is your experience making a free service completely paid?
87 points by tluyben2 1425 days ago | hide | past | web | 42 comments | favorite
Today we decided to make our 7 year old free photo site paid. We really didn't want to do that, but Google banned us from Adsense because some users kept uploading porn. Google has been very lenient over the years allowing us ample time to remove the illegal content (illegal for Google and also illegal for us).

Because of the amount of users, traffic and images, we run quite a cluster for this site and we can simply no longer pay for it now that we don't have ads. We tried different providers but they don't come even close.

Did anyone here take the same (drastic) step and what can we expect do you think? Did we make the right decision?

We wrote this to our users; http://picturepush.com/gopro

Hoping for some positive experiences!




> Did we make the right decision?

Maybe you can have procedures in place to let approved accounts stay on a free plan. If you have a user with a long track record of acceptable use, and they really want their free account, why not give it to them? You could limit this to a small user pool, say, accounts open for > 1 year and exclude all new users. It might be a fun way to reward your longtime users and develop some loyalty.


That's a very nice idea! Maybe we'll just upgrade our longterm fans or something like that. Thanks for that; we'll go think what we can do in that direction.


Why? Think about it. You charge one lousy euro a month. That's nothing. If people are long-term users, they get a lot of value out of your service. Why shouldn't they pay for it? If the service provides value to them, they'll pay. If it doesn't, they don't add anything to your business anyways. This leads to a very one-sided business relationship, if users want your service but don't want to pay for it. It's like they're saying:"You're not worth it."


Maybe automatically upgrade long term accounts and allow shorter term accounts to apply for approval until some deadline. After the deadline, allow access to content already uploaded on non-upgraded existing accounts, but not new uploads. That way, everybody gets treated fairly, but not equally.

The mistake would be to upset people who have trusted your brand.

Good luck.


That makes a lot of sense. This company should get their programmers on this so they can post a quick followup to respond to any backlash. It's clear from this Ask HN the founders really do care and want to make people happy, so they could issue a blog post to that effect if it's needed.


This is what my brother did to his startup. Part was free and part was paid, but he changed it to all paid and grandfathered in a set of early users.


I don't have experience with ad-based to paid, but going from beta and free with 100k users to paid in a market with a lot of competitors has been interesting, in a good way.

I think though it depends who is going to be your customer. If they are businesses, many of them prefer to pay as it's normal to them and they can expect certain things when they pay for something.

Once the first bit of paid revenue came in I forgot about all my fears of alienating the customer base and driving them to competitors. Users that expect things to be free tend to be fickle anyways.

For consumers, I don't know, but more of them pay than you'd think.


There are some businesses, but most are consumers. The businesses (photographers mostly) already all have premium accounts as they want to upload high res pictures to show to clients.


We had 6.5 million free uniques per year and ~200 paid customers on a freemium model and went to free trials / $279/yr.

Revenue almost tripled YoY.

I wrote about it here: http://wensing.tumblr.com/post/26830276239/bootstrapping-sto...

And you can watch me talk about it here: http://mixergy.com/matthew-wensing-stormpulse-interview/


I had a free service with only a tiny little bit of Adsense and some donations for 5 years. It was used by about 30,000 people over the lifespan with 5,500 active accounts at the time I announced that the free service would cost 0.99€ per month, starting in 30 days.

The goal with that pricing was to convert as many users as possible to the paid service. 0.99€ provokes this idea of "it's so cheap I don't even have to think about it" and it worked. In order to reduce the substantial transaction costs of such a cheap service, I offered prepaid accounts of 6 or 12 months, so the minimum transaction was about 6 euros and the fixed part of each PayPal transaction didn't grow too big. People who donated money before got 6 months for free. New signups get a free period of 30 days with no restrictions in the service.

About 80% of the users switched from free to paid, which is pretty good I think. However, I have to point out that my SaaS business is somewhat the best in its niche and there were no good free alternatives.

I doubled prices to 1.99€ euro per month last year and introduced a 3-month-prepaid interval. The increase in price was relatively well accepted. A few people complained, but I also offered existing customers to extend their accounts for the old rate, but only if they bought within 2 months. There weren't too many people who stopped using the service.

I can say that charging money and turning my side project into a serious business was the best thing I did in my life. In the Adsense times, I made maybe 400 euros a month, now I make close to 8,000 euro a month – same amount of weekly time investment on my side.

A very crucial thing that is often overlooked is that once you charge money, you turn your side-project into a serious business, which leads to entirely new situations you never thought of before. I get approached by people who want to cooperate. I see new opportunities for apps in the same niche. And I have a budget that can be reinvested to try things. If your site is just a side project, you'll probably miss many of these opportunities.

The only thing I wished I did differently was to start with the 1.99€ per month rate, since increasing prices isn't the easiest thing to do. 0.99€ helped to convert many people from free to paid, but it also set some boundaries in the perceived value of the service. After I went to 1.99€, people would say:"You increased the price by 100%." which sounds a lot more than saying "you charge a lousy euro more every month". I guess it takes a few years until I can start charging a bit more. Otherwise people would have the feeling that I double prices every year or so.

One more thing: I often heard that having a low-priced product is a bad idea because of the need to give customer support to a huge user base. I can't confirm that. I still get maybe a handful of emails per day and that's it.


I want to add a few more things since you asked what you could expect:

First of all, the notice to your users is fine in my eyes. You wrote "think about it, this is less than a cup of coffee!" and the funny thing is that I used something very similar. I guess you'll also receive some smart-ass answers like "but I can get a cup of coffee for 0.80€".

In my experience, you'll always have some bored people who'd rather rant about the one-euro-per-month for HOURS instead of just earning 20 euro and be safe for 2 years. Customers are irrational.

Also, you'll be in some sort negative feedback bubble. Most people who accept the new price will say nothing. So the emails you'll receive will sound negative. Always keep in mind that the 50 complaining people is a tiny little minority. Be polite to them, but don't question your decision over a few negative emails.

Ultimately, I think your decision was right. It's the logical consequence and there is not really an alternative. And it might turn out very similarly to my situation and you'll have a great more-or-less passive income for years to come. You'll see :)


Thanks for this. We have an issue that besides (amateur) photographers, we don't really cater much to a niche. We were in 2006 but we didn't work it hard enough. I certainly hope making it a serious business like you did will change this over time!


Well, just making it a business won't change anything. It makes no difference to the users. It does make a difference to potential cooperation partners. However, I've got my first requests for cooperation after a year or two. Don't count on it.

If amateur photographers are a big majority of your users, the next logical step would be to optimize the whole website for amateur photographers to get more of them. Start to target amateur photographers explicitly. Post your service in amateur photographer's forums, change the copy of your website to appeal to them. State all benefits of your service in terms of value that amateur photographers get out of your service.

For example, take the home page. It doesn't say anything about amateur photographers. Why not? If this group is 80% or so, you could put a headline like "Perfect photo storage for amateur photographers."

If your website appeals to a very specific niche right now and 80% of your customers are from that niche, it makes sense to optimize your business around that niche for now and expand into new customer segments/niches later.

By turning into a paid service, you also need to act and behave professionally. Some people have new expectations. For example, the service shouldn't be down often. You have to have backups, security etc.

And from here, it is all about business development. I learned so much from HN. For a start, read everything from patio11 and his blog. Sign up for his newsletter.

Read the book "Getting Everything You Can Get Out of All You've Got". The part about internet businesses is a bit dated but the rest is a gold mine for opportunities for business development.

Read stuff about copywriting. Read everything about lifecycle emails that are all the rage now. Introduce an email course for amateur photographers how they can get the best value out of your webservice, get some testimonials etc.

Ask amateur photographers what features they need from you and what kind of benefits they get from your service.


I am writing a book on how to find and test SaaS ideas. Might I interview you? :)

(Didn't see an email address in your profile).


I'll think about it. How come you have no personal information on that launch website? I wonder who the guy behind this thing is and wether or not I'll receive spam for the next 500 years if I enter my email, which is not solved by saying "we won't send you spam" but by giving the site credibility, a proper name and address etc. even if it is just a testpage to check for demand.


Will put that info in the new landingpage which should roll out any day now :)


What niche was this?


Thanks for asking, but I decided to keep a low profile on HN, so I won't tell.


Smart move


Off topic, but "Help us to keep your albums stay online" is awkwardly phrased in English. Try deleting the word "stay."

Somewhat on topic: do your users who won't upgrade have a simple tool they can use to download all their albums?


Thanks for the off topic; fixed that typo.

And yes they have; you can download all your albums very easily. I'm writing some more text so it is clear. But that has always been possible anyway.


Good deal. That said, my opinion is that you're definitely doing right by your users. You're being open and honest about what's going on, and you're not holding their data hostage. I've never gone through this myself, but just remember that you can only do so much, and you can't please everyone.

If you've been running a good service this whole time (I'm betting you have), I'm sure that most of your happy customers will be willing to pay €0.99/mo.


Is the letter you wrote to your users [0] the first time they are hearing this, or is your customer base broadly aware already of the issues you're facing.

I ask because if this letter is the first time you are telling your customers their free accounts are going away, it could feel very much like you're holding them hostage. The letter only gives 14 days for customers to pony up some money or their pictures get hidden, and 30 days until they're deleted.

I know it's not a huge amount of money that you're asking, but it is sudden and can rub customers the wrong way.

If you don't have it, it might be useful for you to offer a "download all your images & data" option, as a sign of good faith with your customers. Maybe after 30 days you can archive the photos into cold storage (something cheap, maybe Amazon Glacier), offer a way for users to get their data back, and then permanently delete it further into the future.

[0] http://picturepush.com/gopro


We spent quite a bit of time implementing the features needed to make this step possible. We wanted to do this before the 1st of july and this is the first time they hear about it, but they have 15 days to actually get everything off and we have a button for that. So they are not hostages; they just cannot upload new images. I will try to word this more clearly.


I have never heard of picturepush, but I will share my reaction. Your letter is straightforward and to the point, and I would appreciate that as a user. My only issue would be the timeframe.

Pictures are really important to people, and many people don't know what to do with all of their digital images. 15 and 30 days sounds like plenty of time to you, but that is no time at all to people who haven't been thinking about doing something different with their pictures. That is especially true when you think about the people who won't get this message right away.

I second the idea of putting your data in cheap storage for as long as you can. A respectful timeframe, if you can make it happen, seems like about 6 months. Getting some revenue initially might make that more feasible. I wonder if you might offer an incentive for people to pay up quickly? For example, anyone who pays for 1 year of service before the 15 days are up gets a discount of x%?

Anyways, I do appreciate the straightforward tone of your letter, and I hope the transition goes well for you and your users.


Thanks!

We are not a big site, but we have loyal fans. Unfortunately the loyal fans are mostly not of the spontaneous paying kind which landed us in making losses for many months trying to find some other way to sustain the growth. Our marketing efforts were also focused on the EU mainly because that market is already large enough.

Thank you both for the long term storage advice; we will probably use Glacier. We'll try to see if we can use a combi between Glacier, S3 and our local caching to keep the images downloadable for a few months. But not for live showing as that + hotlinking is where the cost comes from.


Also, especially in the EU, do not forget it's summer, hence a vacation period so some user could only find out after their vacations that their pictures are gone !


Cool. It looks like you updated the letter to mention that your users can download all their data, that's a nice addition


We were once in a similar situation too. Thousands of signups (site featured on techcrunch, mashable, et al) but the ad money wasn't enough. So I said fuck it and we switched to $5/mo with a 14 day free trial. Lot of people were pissed off, and some sites even put our site in their "hall of shame". But guess what? you have to bear the storm for a few days and then it starts to become okay.

What really paid off for us is that we didn't give up and started working on a totally new version of our software (which we wrote from scratch) and instead of $5 or something, we offered rather big premium packages ($49/mo, $99/mo with 40% discount if ordered yearly) and that is when we really started making some good money.

The users got 1/50th, which was good and bad. Good because the insane # of support tickets also dropped and we were running just fine with a single dedicated server. Bad because our traffic dropped badly, but it didn't die all the way. Being on big sites gave us some really good Google rankings that we still have around 100 new signups per day. We could have put a "So long and thanks for all the fish" blurb and killed our site but good thing we stuck around and kept innovating. It's definitely not our flagship product anymore but the site still makes 6 figures yearly. So what i'm saying is try to create something for your audience and try to sell it hard to them. When you have a ton of traffic, even a small segment of customers in your audience can still make you good money.


I don't know what your goals for this product are, but at €0.99/month, you're going to need thousands of paying customers to make any noticeable amount of revenue (not even profit).

You might want to try selling sponsorships directly to relevant companies or raise the prices significantly and serve a smaller market. There is no dearth of free photo sharing apps, so maybe it's better to sell some premium services which the free apps don't.


I made my web app side project (a text editor for Dropbox) into a paid product. Once traffic picked up on the original (free) app and I gathered feature requests from users, I rewrote the app from scratch and charged for that while keeping the old one online. I did this about 1 year after launching the original app.

It was a great decision for me and for my users because I was able to implement new features and cover their costs at a price that users were happy to pay.

In my case it helped that user data was all in Dropbox, so there wouldn't be any data migration to do in case they decided to move off of my app. I've also found paying customers to be really appreciative and grateful for the app.


Going from completely free to completely paid is a bit of an "all or nothing" proposition. There are ways to mitigate risk in this type of transition:

- Migrate all existing users into a special "free subscription". All new users pay.

- Have a pro tier and a free tier. Extract value out of the free tier through any combination of ads, one-off payments (aka IAP), having them invite friends to retain access, or generate content in some way.

Would love to hear more techniques for de-risking the act of putting services through this type of transition. Anyone have some?


If you have a small business, the free tier doesn't add any value to your website. If everybody pays, the value proposition is very clear for everyone. Also, you need to consider that people, who use your service but don't think that the value of it can be expressed in terms of money, are not a good fit. They are a burden somehow. If they don't get enough value out of the service to pay a few euros a month, then you shouldn't do business with them. Of course, you've got a problem if nobody gets any value out of your service, but then you didn't have a good business idea in the first place.

However, I'd always add a trial period for new people.


I've heard things like Photoshop only having the amount of cachet it does in the professional world because of its ease of piracy for students. Sure the prosumers and teenagers who pirate are "not the customers you want" but it can be worthwhile long-term marketing. What's your thoughts on this?


Products like Photoshop are a relatively unique case in the sense that they are, in many ways, the only product. There are other other photo editing programs (gimp has actually gotten pretty good at this point), however there is a significant cost to re-learn how to use the new program. This cost to learn effectivly creates a lock-in effect, where the cost of Photoshop is cheaper than the cost of learning something different.

Additionally, Photoshop does not have ongoing costs with pirates. Whereas a web service needs to maintain the servers for the free users. And because Photoshop is pirated, the do not have an expectation of customer support.


Ok, I understand this is a difficult decision, but I think you handled it well, giving the chance of them taking their photos from the site is good and fair.

Some alternatives I would have considered:

- Keeping a free plan with limited space / limited quality (and no hotlinking - not sure you allow this)

- Separating albums between regular/+18 pictures (so if in +18 no google ads/outside of robots.txt permissions, etc)


Thanks for the comments. To give some insight:

> - Keeping a free plan with limited space / limited quality (and no hotlinking - not sure you allow this)

We did this already; it pissed off the fans and the freeloaders came in any way. Double loss. This is already less than they had.

> - Separating albums between regular/+18 pictures (so if in +18 no google ads/outside of robots.txt permissions, etc)

Well we don't allow adult at all and we don't want to. People just upload them anyway and because of the thousands of pictures coming in all day and night, we cannot screen them. Well we can manually, but then it would be even less feasible to run this.


Accounts could be NOINDEX until they are a certain age or get to a certain # of images, and then they get reviewed by hand. You can review by hand using crowdflower or mechanical turk - it's pretty easy to show the first 20 pictures (or whatever) in small, and have a large button. You can optimize the interface to make it very fast, as well.

Flickr did this for a very long time, IIRC.


Making a business (especially, its revenue model) that is based on somebody else's business is extremely risky and usually best avoided.


Check out the below article to help your monetization efforts past Google: http://www.monetizemore.com/google-adsense-isnt-the-only-ans.... If you have any questions you can email us at info@monetizemore.com.

Kean


I do not have such experience, so you can skip my comment, if you wish.

But there is the Dropbox, Github, Bitbucket and many others' model: tolerate the mass of completely free users, have no ads, balancing it with paid accounts with extended functionality, more storage space, etc. From my humble perspective it is a tricky and unstable business model, but it obviously works for many.


We tried this model and it was not sustainable. People did upgrade by not by far enough of them.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact

Search: