background preloader

Biz

Facebook Twitter

Why Free Plans Don’t Work. If you're trying to grow your startup you've come to the right place. Get my 170-page ebook on how to grow a startup and join thousands of self-funded entrepreneurs by subscribing to my newsletter at right. The following is a guest article by Ruben Gamez of Bidsketch. Not too long ago it seemed like every product I knew was offering some sort of free plan. The strategy was brilliant: get loads of people using your product and eventually turn them into paying customers. When 37signals talked about giving something away for free as a marketing strategy, it made a lot of sense to me: “For us, Writeboard and Ta-da list are completely free apps that we use to get people on the path to using our other products.

So when I launched Bidsketch — a SaaS based proposal application for designers — offering a free plan was a no-brainer in my book. Early on, things were working out nicely. “Man, this free plan is really working out,” I thought. I tried all sorts of tactics to convert my free users: Don’t Celebrate Until The Ink Is Dry And The Cash Is In The Bank.

Recently I wrote a blog post about how I hated losing, but I embrace it as a way to learn, improve and increase my win rates. You’re Most Vulnerable Right After You’ve Won the Deal One of the things I learned from my “post-game analysis” is that you’re most vulnerable right after you’ve won the deal. I know it sounds counter-intuitive but my experience tells me it’s true. At the moment you pop the champagne cork and let down your guard is when you’re easiest to attack. In my blog post about how I hate losing I told the story about how when I was running my first company in the UK I competed and won a major contract with the largest water company, Thames Water, that would have been worth millions of dollars. An external consultant helping the Thames Water procurement team overturned the decision to use my company and got them to select a small software company.

And the reverse lesson is also true. For simplicity, let’s call this person inside your new potential customer, “the enemy.” Finance. A VC. Fred Wilson (fredwilson)

Social Networking

4 Cans of Red bool* VC and finance blogs.