0. It's the 'a small price' plus a free tier that concerns me in terms of sustainability for a business. It makes sense of Walmart to provide and maintain and support free software because the free software: a. does not cannibalize sales transactions.
b. does not have design incentives to be delibrately
bad/frustrating/incomplete
c. does not allow the creation of bad business metrics
like "Look how many free users it has!"
d. *does* create a virtuous cycle where there is revenue
for support and maintenance proportional to its use.
The free tier of a paid product does the opposite of each. Not only is the paid tier "competing with free" the company itself is actively anchoring the price to 0€.1. 10,000 free users and 1000 paid users means supporting 11,000 users on the revenue from 1000 (and that's assuming an optimistic 9% conversion rate and an optimistic 1000 users). With the current pricing that's less than 50k a year before expenses. 2. The revenue model in #\1 suggests a significant probability that the business will be underfunded. Underfunded businesses tend toward ceasing operations. I mean if the business gets to 1000 paid accounts a year from now at a steady rate, that's only 25k in the first year. 3. Where I am going is that the as a business proposition, if it is worth investing the time in building and managing a website on PageRocket, then it is probably worth 50€ a month and with 50€ a month per paid account, there is money to run a business and incentives to make the product worth 50€ a month or 100 or 200. Of course, if the goal is passive income, then that's a different model. 4. There was an interview with Jeff Atwood (I think on Hanselminutes but maybe Software Engineering Daily) where he described the three things a landing page has to do. The two I remember are it has to tell people 'what it is' and 'why the person should care'. A lot of goes in to those will be subject to interpretation by the visitor. "Oh a box to type in my email address" leads to a lot of quick assumptions that it is probably better not to have people make. |
The goal is somewhere between passive income and becoming something more so maybe that's why the mixed signals. Have to take a look at that, I guess.
I know and we did the math on how free users impact our finances but had to somehow launch it and get attention. What would you suggest? Trials and increased pricing? By the way, thanks for providing your feedback!