[stevesaldana]

One of the biggest problems I face is determining when the time is right to shift from free to paid. I originally slapped a subscription page on my app[1] thinking "we'll see how this goes". But after a few weeks of 0 conversions, I had a tough time justifying turning down folks who would have at least signed up if there wasn't a payment required - so I made it free.

The way I look at it is that any feedback with a free plan is better than zero feedback with a subscription. I gain a lot of valuable insight observing how users actually use the service. I'm hesitant to give that up by switching back to a subscription plan and watching new signups die again.

I know there's no magic bullet. I suppose this could be solved quickly if I had more time to devote to selling and marketing - admittedly I've been slacking in that department.

Any words of wisdom would be much appreciated.

[1] https://beanjockey.com

[alanbyrne]

Stop coding, pick up the phone and call some of your free users. Ask them if they'd pay for your product and why/why not.

If none of your free customers are willing to pay, then it might be time for a pivot. Such as licensing your app to financial providers as a value add.

[timv]

If you do pivot, there might be enough return in acting as a broker (/lead generator) for selling financial products to your users.

Once they're paid down their loans (and even before then) you should have a pretty good picture of their financial situation. What are they going to do with that extra cash they have now that their loans repayments are done?

* Take out a loan for a car/holiday?

* Open a share trading account?

* While they're paying down their debts can you get them a better deal on their credit card?

[stevesaldana]

You are spot on. There are so many alternative fee-generating sources and maybe I've been too stubborn at ignoring them. My motivation going into this was that I wanted to create something that provided a definitive value of x, and have customers happily pay a function of x. The known value / known cost approach seemed fair to me.

Pitching additional product for me is troublesome because of the intrinsic fees associated with them. I look at my service as something that accelerates debt repayment in the most efficient way. But to encourage customers to roll-over into a cc balance transfer, mortgage refi, or student loan consolidation, it just pushes their obligations further out in the future. Now, this might not be a bad thing for some people. But ultimately you could get a lot of people into the fee roulette game and it becomes a never-ending cycle where every economic peak and trough of high->low interest rates creates a new incentive for a financial services company to pitch new product.

So, I struggle with this. Do I want to maximize my revenue, or do I want to just provide a really good service for the small group of people willing to pay for it...

[stevesaldana]

Guilty as charged. But I do appreciate hearing it directly from you as it serves to drive the point home.

As a first-time founder and relatively new developer, I could never really tell when the time is right to stop creating and start pitching. Looking back, I definitely went too far with the build, but better late than never to snap out of it and start soliciting.

[shazow]

I don't see a pricing page anywhere, how come? (Sounds like you removed it; why?)

> The way I look at it is that any feedback with a free plan is better than zero feedback with a subscription.

I wouldn't be so sure. My experience has been that I get very different kinds of feedback from free users versus paying users. Often times even opposite feedback.

Be careful listening to people who are not, and will likely never be, your target paying customers.

> I'm hesitant to give that up by switching back to a subscription plan and watching new signups die again.

Freemium can work reasonably well for this. Takes less courage, and you ideally get some paying users in the process. Not sure what the best pricing breakdown would be for your app specifically though, as I'm not too familiar with the industry.

Alternatively, you can do free trials (2 weeks, 1 month, or 3 months). Take a credit card up-front if you're feeling brave, or defer if you're not. If people don't convert, contact them personally and find out why. Offer a "no questions asked money-back guarantee", it'll probably make you feel comfortable more than your customer. If you really want, you can give them some customers free accounts anyways.

Best of luck! :)

[stevesaldana]

Thanks for the advice!

[tosh]

Spot on.

[Schultzy]

While I can appreciate the desire for user feedback, I would challenge the assumption that it's "valuable". The very first point of the article touched on the difference between information that you will gather from free VS paying users. One kind is valuable because it can help you develop the product to be more appealing to those willing to pay, whereas the other kind may end up taking you on a very costly goose chase that won't help you generate any revenue.

[stevesaldana]

The article opened my eyes to that. I am treating all feedback as valuable, whereas that might be the wrong way to go about it. It's clearly something I need to think about more deeply and work on discovering the true customer pain points, not just the "it would be nice if you had x, y, z" type of response I'm accustomed to reacting to.

[Paul_D_Santana]

It could be that your target market (people in debt) is one in which people have a lower ability (or willingness) to spend. (Google Ramit Sethi's Pay Certainty test.)

In that case, perhaps an alternate revenue system can be found. Maybe something like Mint.com.

I read (listened) to Chris Anderson's book Free: The Future of a Radical Price [1], which tackles this very subject of creating revenue from free products. (Chris Anderson is the founder of Wired.com and this book debuted as #12 on the New York Times Best Seller List.) You may find his book useful too. I highly recommend it. Best of all, the book is priced appropriately: Free.

[1] http://www.audible.com/pd?asin=B002V5CUHI

[stevesaldana]

Ironically, our target market is actually folks who are the top 60% income earners in the US. Debt and income are directly related, and higher earners have a majority share of the debt in the nation[1]. It makes sense intuitively because these are the people whom are more likely to have tertiary education degrees and a mortgage. So, I'm really trying to find the sweet spot of households with low debt-to-income ratios (high ability to repay), but also large amounts of debt (high need for a solution).

Lower income earners, with primarily unsecured credit card debt for example, are basically faced with two options - spend less or earn more. There's no panacea that software can provide, other than increasing awareness of costs and consequences.

Thanks for the link - I'll check it out.

[1] http://www.federalreserve.gov/pubs/bulletin/2012/pdf/scf12.p...

[Paul_D_Santana]

Ah, interesting. I was not aware that debt and income were related favorably in that way.

So how do you attract high earners with a lot of debt (but still low debt-to-income)? That sounds extremely difficult.

[stevesaldana]

I'm not really sure I have an answer to that as I'm just figuring it out as I go. The most typical customer would be a first-time homeowner, early 30s, and 18-36 months post-grad school. At that point, you've accumulated a lot of debt, but likely have a well-paying job and stable career.

Everyday, I question if the Internet is the best place to market something like this and if a price point in the $5-$15/month range is too low. Eventually you start to creep up towards the level of service that a personal financial advisor would offer. But, I have limited desire to support the asset-side of household balance sheets (401K, stock investments, cash, etc). It's not that I don't want to go down that path, it's just that there are many more variables once you start to incorporate investment objectives, risk tolerance, return forecasting, and stochastic outcomes.

The other marketing challenge is how to cater towards people outside the US. In Europe especially, there are some crazy forms of credit made to people which have all sorts of embedded optionality. I used to work for a bank, building models to forecast this kind of stuff and it was such a challenge looking at it from the lender's perspective, I can only imagine the confusion from the borrower's point of view.

[mctx]

Where's your Pricing page? I couldn't see anything related to pricing or plans on first inspection.

[stevesaldana]

There isn't one at the moment. I removed it about two months ago as an attempt to encourage more signups.

[_pdeschen]

But then you dont get data about how much someone is willing to pay. Why not at least have your pricing table and underneath each pricing package, a signup for free call to action button with their own href anchor ( /signup#gold ) to track within google anyltics or something? This way even though people so sign up for free you'll gain a bit of knowledge about which package they clicked on and as a side effect the potential intend. Not perfect but better then no metrics.

[ianstormtaylor]

Not to mention you're probably turning away signups that think a completely free API is too good to be true. Check out the first question of the Van Westendorp test: http://en.wikipedia.org/wiki/Van_Westendorps_Price_Sensitivi...

[polymatter]

link should be (http://en.wikipedia.org/wiki/Van_Westendorps_Price_Sensitivi...)