| OK, one of my titles was Global Head of Freemium Channel, so here is my take: 1)I've never seen a freemium business reach above 15% paid users from total active base - if your economics cannot support this for a long time, get out right away. Most freemium business are roaches surviving on 1-5% conversions. 2) Freemium works best when: - User has to urgently do something now that is limited (faster=paid, free= slow, those annoying download places that make you wait 1 min for each download or sign up to download now do make money of this simple fact) - User finds content worth paying for in the sea of free content (NYT) - User has low barriers to start, but would be hard to leave (e.g. upload photos) service - User uses service, then gets to bill usage to others (e.g. malware software, document delivery, b2b stuff) - User base can easily reach limits of free service and will require more eventually (e.g. data storage) - User base can clearly be defined as amateur vs. professionals, and the professionals will need more features and pay (e.g. Wordpress plugins, Salesforce API apps, etc...) - User base will be so large the business can be sustained with advertising (what most people want to build but ends up failing all the time - cant get done properly without a miracle) My advice is start with the paid, always. It will give you a realistic conversion result + you can always go lower/free later. If some people already want to pay you, take their money!
You might want to bill first, offer the freemium solution later via email to 'grow' truly interested users that would convert at some point. Freemium 'fools' a lot of business who do NOT track everything religiously. The freemium business is fragile like a soufle, so when everything is perfect it works but when not, its an epic fail. Proceed with caution. |