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Don’t bite the shit sandwich

unicornfree.com

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Re: Don’t bite the shit sandwich

#31

Post by ahoyhere »

cookiecaper wrote: post #25

There's a place for free, but I agree that those who start businesses and then have to come up with a plan to generate money are doing things completely backwards. It's one of the reasons I am annoyed at Twitter; they should be shunned for starting this thing with millions of dollars of other peoples' money and ultimately having no idea how they're ever going to make any of it back, but instead they get played up lik…

I agree with you about freemium, in general! As you said, I addressed it in the comments on the blog post, briefly.

But I think under the talk of freemium, the important questions get lost. Freemium - it's so easy, you give part of it away for free, and part you charge for. Right?

But what do you give for free? What do you charge for? How do you convince people to pay?

Those questions typically go completely unaddressed because of the assumption that money will, magically, appear somehow, with enough viral growth.

People treat the free part of freemium as if you can just slap it on like Sriracha sauce, and improve everything. That's simply not how it works.

Freckle has an extremely limited free plan and we sort of hide it. It is freemium but it is so limited it irritates some people.

But, based on the way other SaaS entrepreneurs choke on their coffee and go "Monthly?!" when I tell them how much we earn per 1000 accounts (total), that extremely limited, fairly hidden account works extremely well for us. :)

And, for the record, I believe the best free-mium strategy is to give away related content, not the thing itself. Give away the occasional cheese stick or cup of cocoa -- not the milk, and not timeshare access to the cow.

Re: Don’t bite the shit sandwich

#32

Post by raganwald »

ahoyhere wrote: post #14
kixxauth wrote: post #11

I buy all the Unicornfree ideology here. But I can't help but begin to think that I reject shit sandwiches simply because the shit sandwich makers reject me. By the way, I also eat up all the preaching that comes out of 37Signals. I love that stuff. I love being an underdog. But, is it an inferiority complex? I have my own thoughts on this: http://fireworksfactory.blogspot.com/2010/05/hacking-on-dyna...

That's a really good point. I read most of your essay, and you're probably going to hate me for this, but… all that effort you put into engineering a new type of business, why didn't you use that energy for building a product you can charge for? I don't agree with "always work on your best idea." My philosophy is "always work on the your best idea that is the nexus of being fun and earning you money soonest." That's…

> A VC is a client, in another form.

Only, clients give you money that you can use in any way you see fit: Grow your business, buy a West Coast Freeride bike, save it for a rainy day.

VCs put money in your business and then take your business for themselves and decide how to spend their money. It was never yours and never will be. If you wind up getting a big, big payday, you might get some of that money. But you'll never get a penny from the VC.

Thus, I would say that while there are excellent reasons to do business with a VC, if we are comparing them to clients I would say they are more demanding than clients while paradoxically giving you no money at all.

Re: Don’t bite the shit sandwich

#33

Post by ahoyhere »

raganwald wrote: post #32
ahoyhere wrote: post #14

Earlier quoted context omitted.

That's a really good point. I read most of your essay, and you're probably going to hate me for this, but… all that effort you put into engineering a new type of business, why didn't you use that energy for building a product you can charge for? I don't agree with "always work on your best idea." My philosophy is "always work on the your best idea that is the nexus of being fun and earning you money soonest." That's…

> A VC is a client, in another form. Only, clients give you money that you can use in any way you see fit: Grow your business, buy a West Coast Freeride bike, save it for a rainy day. VCs put money in your business and then take your business for themselves and decide how to spend their money. It was never yours and never will be. If you wind up getting a big, big payday, you might get some of that money. But you'll…

I was thinking of it purely in terms of decision-making -- if you are only bootstrapping, you are free to serve your customers to the best of your ability, and shape your business how you choose. I have seen many friends forced to compromise because their VC demanded it. (And not the everybody-learns-and-grows type of compromise.)

But you really pounded the financial nail into the coffin there :)

Re: Don’t bite the shit sandwich

#34

Post by ynniv »

lidmith wrote: post #2

Hmm, on the whole monetization thing, there are a lot of good services that people (myself, anyways) would not pay money for. Twitter, Gmail, others. Figuring out how to monetize in a way other than "sell your product to your customer" is a real problem for such services. Btw, I have never clicked on a google ad. Not once. I also now have adblock installed. Monetizing useful but free services is a tough problem, not…

Of course you would pay for GMail - if the price was right. If an ad-free version of GMail cost 1¢/year (a lifetime for a dollar!), you would pay for it. In fact, you would probably pay a lot more that that if Google wasn't offering their service for free. And someone could easily still sell a webmail product, if it were better than GMail.

Re: Don’t bite the shit sandwich

#35

Post by mcantor »

ahoyhere wrote: post #12
lidmith wrote: post #9

Earlier quoted context omitted.

While I understand that they do tailor their ads to the information in your email, it was my (perhaps naive) understanding that the particulars of your emails were not used outside of determining those ads. Am I wrong in this?

I couldn't tell you, I don't know. But their public mission is to index all the world's information. That much we do know for sure, since they've said it themselves. They are also clearly trying to cover ALL the bases, to have everybody sucking at their proverbial info-teat. They want you to store your calendar, docs, contacts, phone, videos, status updates, internet reading, spreadsheets, etc., etc., all on their se…

Did you know they used Goog-411 to collect spoken phonemes to improve their auto-captioning of YouTube videos (so they can search them)?

Source?

Re: Don’t bite the shit sandwich

#36

Post by tibbon »

_delirium wrote: post #28
lsc wrote: post #10

hah. I love it. Now, personally, I don't have a problem with 'free' but I do think that 'free' goes more with "I'm doing this because I think it's fun" than "I'm doing this so I can get rich." - I think most of the problems you see with 'free' happen when you try to get rich off your free product, rather than just trying to create a good product that happens do be free. Craigslist is an excellent example. I mean, cra…

Craigslist is an odd case, because I think he did actually get rich by global standards, or at least, he has more money than most VC-backed entrepreneurs with exits have. Estimates vary, but he appears to make somewhere between $10m and $50m in cash dividends from CL per year , possibly more, which would put his cash net worth comfortably over $100m, not even including Craigslist equity. There are plenty of startups…

And their model is pretty clear. They are exchanging goods (posting space for job listings) for money.

The critique of free isn't that you can't give away a piece of candy to smooth over business, but that free isn't a business model.

Re: Don’t bite the shit sandwich

#37

Post by ahoyhere »

mcantor wrote: post #35
ahoyhere wrote: post #12

Earlier quoted context omitted.

I couldn't tell you, I don't know. But their public mission is to index all the world's information. That much we do know for sure, since they've said it themselves. They are also clearly trying to cover ALL the bases, to have everybody sucking at their proverbial info-teat. They want you to store your calendar, docs, contacts, phone, videos, status updates, internet reading, spreadsheets, etc., etc., all on their se…

Did you know they used Goog-411 to collect spoken phonemes to improve their auto-captioning of YouTube videos (so they can search them)? Source?

LMGTFY:

http://www.google.com/search?q=goog-411%20phoneme

Re: Don’t bite the shit sandwich

#38

Post by eru »

ahoyhere wrote: post #31
cookiecaper wrote: post #25

There's a place for free, but I agree that those who start businesses and then have to come up with a plan to generate money are doing things completely backwards. It's one of the reasons I am annoyed at Twitter; they should be shunned for starting this thing with millions of dollars of other peoples' money and ultimately having no idea how they're ever going to make any of it back, but instead they get played up lik…

I agree with you about freemium, in general! As you said, I addressed it in the comments on the blog post, briefly. But I think under the talk of freemium, the important questions get lost. Freemium - it's so easy, you give part of it away for free, and part you charge for. Right? But what do you give for free? What do you charge for? How do you convince people to pay? Those questions typically go completely unaddres…

> But, based on the way other SaaS entrepreneurs choke on their coffee and go "Monthly?!" when I tell them how much we earn per 1000 accounts (total), that extremely limited, fairly hidden account works extremely well for us. :)

Could you elaborate on that? What's the use of your free account, if nobody uses it anyway?

Re: Don’t bite the shit sandwich

#39

Post by what »

ynniv wrote: post #34
lidmith wrote: post #2

Hmm, on the whole monetization thing, there are a lot of good services that people (myself, anyways) would not pay money for. Twitter, Gmail, others. Figuring out how to monetize in a way other than "sell your product to your customer" is a real problem for such services. Btw, I have never clicked on a google ad. Not once. I also now have adblock installed. Monetizing useful but free services is a tough problem, not…

Of course you would pay for GMail - if the price was right. If an ad-free version of GMail cost 1¢/year (a lifetime for a dollar!), you would pay for it. In fact, you would probably pay a lot more that that if Google wasn't offering their service for free. And someone could easily still sell a webmail product, if it were better than GMail.

You can just mention death in all your emails to remove the ads. Google doesn't want to offend you by advertising coffins and funeral services for your deceased relative/friend. It's been a while since I've tried it, but it used to work.

Re: Don’t bite the shit sandwich

#40

Post by ahoyhere »

eru wrote: post #38
ahoyhere wrote: post #31

Earlier quoted context omitted.

I agree with you about freemium, in general! As you said, I addressed it in the comments on the blog post, briefly. But I think under the talk of freemium, the important questions get lost. Freemium - it's so easy, you give part of it away for free, and part you charge for. Right? But what do you give for free? What do you charge for? How do you convince people to pay? Those questions typically go completely unaddres…

> But, based on the way other SaaS entrepreneurs choke on their coffee and go "Monthly?!" when I tell them how much we earn per 1000 accounts (total), that extremely limited, fairly hidden account works extremely well for us. :) Could you elaborate on that? What's the use of your free account, if nobody uses it anyway?

I never said nobody uses it. We have several thousand free accounts. But we make it much easier & more appealing to sign up for a paid account.

It's like clipping coupons: you segment your audience by price sensitivity by making the cheap people (poorer leads) work for their discounts.

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