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Why Free Plans Don’t Work

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: Related:  Business models

10 business models that rocked 2010 - by @nickdemey ( 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.”

Going Freemium: One Year Later On September 1st, 2009 we announced that MailChimp was going freemium. On that day, we had 85,000 users. Now, slightly more than a year later, we have more than 450,000 users. We grew our user base five times in one year. Earlier this month, we actually doubled our freemium plan from 500 subscribers to 1,000 subscribers. So now, even more people can take advantage of MailChimp’s powerful email marketing and social features. Another thing that’s increased dramatically since going freemium is the number of lunches I’m invited to; seems entrepreneurs and VCs really want to "pick my brain" about how freemium is doing for us. See, I’ve heard a lot of discussion about MailChimp’s success with freemium, but it’s scary that people would want to model their companies around us. First, the stats Yeah, I know you’re just here for the numbers. "Yeah, but they’re all tiny customers, right?" 12% of our users had lists greater than 10k subscribers But at the end of August 2010, that 12% grew to 20%:

The Tragic Death of Practically Everything Wired Editor in Chief Chris Anderson is catching flak for the magazine’s current cover story, which declares that the Web is dead. I’m not sure what the controversy is. For years, once-vibrant technologies, products, and companies have been dropping like teenagers in a Freddy Krueger movie. Thank heavens that tech journalists have done such a good job of documenting the carnage as it happened. After the jump, a moving recap of some of the stuff that predeceased the Web–you may want to bring a handkerchief. Internet Explorer, as you’ll recall, died in 2004. In 2005, the Macintosh suffered a trauma which inevitably led to its death earlier this year. Linux absolutely, positively died in 2006. The venerable technology known as TV died in 2006. too. By 2007, Microsoft Office had bit the big one. Microsoft itself also passed away in 2007. E-mail had a good long life, but it too went to its reward in 2007. I hope this doesn’t come as a shock, but Facebook died in 2008. The netbook croaked in April.

Innovation de business model : best of 2010 Dans le plus pur esprit des best off de fin d’année, je vous propose une compilation de mes articles sur l’innovation de business model : Pour lancer le sujet commençons par le très précis et très exhaustif rapport sur l’innovation de Delphine MANCEAU et Pascal MORAND en 2009, détaillant ce qui freine l’innovation en France. Avec au passage la destruction de plusieurs idées reçues des « bien pensants » de l’innovation technologique : L’innovation relèverait forcément d’une technologie nouvelle.La performance d’une entreprise en matière d’innovation se mesurerait au nombre de brevets déposés.Suite à la définition de la stratégie de Lisbonne, le ratio R&D/PIB évaluerait la performance des pays en matière d’économie de la connaissance. Comme point central de ce best off, je vous propose une présentation courte synthétisant l’innovation de business model (mise-à-jour dernièrement pour le réseau PACA Innovation) et une version encore plus condensée en format magazine.

A VC Market segmentation Criteria for segmenting[edit] An ideal market segment meets all of the following criteria: It is possible to measure.It must be large enough to earn profit.It must be stable enough that it does not vanish after some time.It is possible to reach potential customers via the organization's promotion and distribution channel.It is internally homogeneous (potential customers in the same segment prefer the same product qualities).It is externally heterogeneous,( potential customers from different segments have different quality preferences).It responds consistently to a given market stimulus.It can be reached by market intervention in a cost-effective manner.It is useful in deciding on the marketing mix.It identifies the target customer(s) (surrogate(s))It provides supporting data for a market positioning or sales approach. Methods for segmenting consumer markets[edit] Geographic Segmentation[edit] Demographic Segmentation[edit] Behavioral Segmentation[edit] Lifestyle Segmentation[edit]

Eye Candy: Shipping Containers Grunge Up Stark Modern Office | Co.Design The Swiss architecture firm Group8 has managed to marry two of the biggest cliches in contemporary architecture -- shipping containers and stark white offices -- to produce something entirely unique. The project is a new workplace for Group8 in Geneva, and the architects' sleight of hand was to load up a massive open floorplan with more than a dozen steel containers, rust, grime and all. Here's the interior of one of the containers. Mostly, they're used for conferencing and brainstorming. The office is called Cargo (of course). We're sold on pure aesthetic grounds. We also love the idea Group8's toying with here. [Via DailyTonic ; images by Régis Golay of FEDERAL Studio in Geneva and courtesy of Group8 ]

Innovation de business model en PACA J’ai beau parler souvent d’innovation de business model pour essayer d’évangéliser et de sortir le concept d’innovation de son ornière exclusivement technologique, à vrai dire je ne devrais pas avoir à le faire. Cette définition de Schumpeter de 1942 a déjà tout dit : L’invention signifie la conception d’une nouveauté. Alors que l’innovation se définit par l’introduction de l’invention dans un milieu social. Voici néanmoins la présentation ayant servi de support à ma dernière interventions pour le réseau régional de l’innovation, PACA Innovation. Revenir sur la distinction entre innovation technologique et innovation de business model (ou entre l’invention et l’innovation, donc) ;Donner des exemples concrets de ce qu’est l’innovation de business model ;Différencier la phase startup qui doit se préoccuper de tester un business model, la phase de structuration et la phase entreprise où il est plus difficile d’innover son business model.

4 Cans of Red bool* Getting the Most Out of the Freemium Model By Demetrius Madrigal and Bryan McClain Published: December 6, 2010 “Freemium is a business model that provides users with free access to a service’s core functionality, but charges for additional or improved features.” Freemium business models seem to be gaining in popularity and rapidly becoming a dominant factor in the success of Web startups. Massively successful social-gaming companies like Zynga and Playdom have had a role in driving their adoption. These companies have been able to grow quickly and make substantial revenues through a combination of ad sales and charging small amounts of money for additional game items and features. Freemium is a business model that provides users with free access to a service’s core functionality, but charges for additional or improved features. In this month’s column, we’ll discuss methods of getting the most out of the freemium model and maximizing the likelihood that users of basic, free services will start paying for premium features. Conclusion