Emergence Capital: Profitable Lessons From Freemium Business Mod. Posted by Tom Foremski - March 25, 2010 It pays to specialize.
VC firm Emergence Capital Partners is doing very well by focusing on investments in the enterprise IT market, and on startups that make use of the 'freemium' business model. Freemium is not a new idea, companies have been giving away products and services for free for a long time but it is a new word -- popularized by Fred Wilson, a VC at New York City based Union Square Ventures. Chris Anderson, the editor-in-chief of Wired magazine, has also written about "free" business models. A freemium model means that you offer a free version of your online service and try to convert some of those users to premium subscribers through offering additional features and value.
This business model can work very well for some companies -- especially the portfolio companies managed by Emergence Capital . David Sacks, CEO, Yammer Ivan Koon, CEO, YouSendIt Brent Chudoba, VP Business Strategy, Survey Monkey Umberto Milletti, InsideView. Freemium Blog - Emergence Capital Partners. Enterprise Microblogging. YouSendIt: Online File Sharing and collaboration with FTP Replac. Free online survey software & questionnaire tool. InsideView - The Sales 2.0 Leader. Sales Intelligence Powered by.
Electronic Signature Solution. Emergence Raises New Fund and Maintains Focus. Posted by Tom Foremski - March 29, 2007 I've been waiting for a few minutes inside VC firm Emergence Capital Partners' swank offices in San Mateo as general partners and co-founders Gordon Ritter and Jason Green walk in.
"I see that you've managed to escape the Sand Hill Road gulag," I tell them. They laugh and we sit down to talk about their VC investments and philosophy. They tell me that getting out from the Sand Hill Road VC community in Palo Alto was important. "We got fed up with the same scene, and seeing startups go from one firm to the next, all day long," said Gordon Ritter. "We also wanted fresh and independent thinking and so getting out was important in that regard," said Jason Green.
The four year old Emergence recently announced a second fund, $175m, an increase of $50m over its first fund. The first fund had an early success with an investment in Salesforce about a year before it went public. "Startups in our space know about us and they come to us. " Additional Info: The Freemium Business Model. I wrote a post last weekend called My Favorite Business Model.
I posted it earlier today. Here is how I described the business model: Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base. At the end of the post I asked for some suggestions of what I should call this business model. I’ve gotten 33 comments already which may make this the most commented post I’ve ever written, surely its the most commented post in the first day I’ve ever written. And at the risk of calling the game before it’s over, I have to go with Freemium. So from here on in, I will refer to this business model as the freemium business model.