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by rick888
5749 days ago
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"The value of your service to a user isn't going to increase simply due to the passage of time or growth of your site. " Yes it will. If that user uses your service every day, over time, it will be more valuable to them. Most services also don't just stay the same over time. More features are added and bugs are fixed, which adds to the value. "If they wouldn't pay for it on day 1, the odds are they won't pay for it after 2 years of using the service." If you never gave them the option of paying in the first place, how do you know? "I think companies trying this route in the first place will be easier to change than peoples' reaction to it." The answer is to not have free services in the first place. Many companies have tried the freemium model and then realize that it can't scale (IE: the costs to support this free user base out weighs the benefits). |
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It has scaled wonderfully for Evernote:
"From the start, Libin modeled Evernote to be profitable at a 1% conversion rate ... Right now, roughly 2% of all Evernoters are premium customers ... Libin wants to maintain that rate at 5% or less. If people start converting en masse, 'that means our free product isn't good enough,' he says."
http://www.fastcompany.com/magazine/147/next-tech-remember-t...