The article is missing out a huge argument in favour of free plans: the opportunity to generate data. This doesn’t even need to be done in a shady manner - imagine analysing what users usually type in free form boxes, normalise that and build a tag hierarchy, for example. There’s a billion way to make a free plan useful - it’s not just a curtesy to your users!
Don't Offer a Free Plan
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Re: Don't Offer a Free Plan
#12The article is missing out a huge argument in favour of free plans: the opportunity to generate data. This doesn’t even need to be done in a shady manner - imagine analysing what users usually type in free form boxes, normalise that and build a tag hierarchy, for example. There’s a billion way to make a free plan useful - it’s not just a curtesy to your users!
Nah. I had a million installs of a web widget and was drowning in data doing over a billion impressions a month and we had to pivot or starve to death. Nice idea but not true in my experience unless you already have customers lined up and are intentional about what you launch in order to generate the specific data they are hungry for.
Re: Don't Offer a Free Plan
#13Anecdata: Trello and Jira both have free plans that I used that caused me to recommend them for paid usage at multiple companies I’ve worked with. Those free plans resulted in $xx-$xxxx monthly subscriptions.
Asana has a paid plan with a 5-user minimum limit. I never bothered to even try it since I wouldn’t have the extended time to play with it. As a result it never even got mentioned to companies I’ve worked with.
So, it’s important to have a free plan (or at least very cheap paid plan as the article recommended) for “influencers” to get heavily involved with.
Re: Don't Offer a Free Plan
#14I don’t know if I buy this logic.
I can tell you that AWS free tier in my case didn’t “convert” from their metric perspective, but they turned into commercial accounts that generated $5-6M for my customers that early adopted.
I can think of a lot of other paid SaaS stuff (Trello, Basecamp, Dropbox come to mind) where that free plan translated into real revenue. For work stuff, the effort to spend $500 is as much as $5M.
Re: Don't Offer a Free Plan
#15One concept I like is the Premium plan that gives lifetime
access to all features but only updates for one year. It can act
as both the old-school software purchase or subscription
depending on what the user prefers.
Re: Don't Offer a Free Plan
#16It's also much fairer to your paying users, since they'll end up paying the bill for the free users.
Re: Don't Offer a Free Plan
#17Anecdata: Trello and Jira both have free plans that I used that caused me to recommend them for paid usage at multiple companies I’ve worked with. Those free plans resulted in $xx-$xxxx monthly subscriptions. Asana has a paid plan with a 5-user minimum limit. I never bothered to even try it since I wouldn’t have the extended time to play with it. As a result it never even got mentioned to companies I’ve worked with.…
The article specifically mentions free trial periods as being a good idea.
Re: Don't Offer a Free Plan
#18I wrote a piece about power users recently that gained some notice on HN a little over a week ago. It seems to fit in the same mindset as this, except written from the power user’s perspective: https://tedium.co/2021/01/27/power-users-history/
Comment thread here: https://news.ycombinator.com/item?id=25978396
This honestly feels like my argument written from the perspective of the product maker. I hope we meet in the middle on this subject, because it seems like there’s some good overlap to be had. Good tools should not just be built for free because that’s how we’ve always done it. Make everyone happy.
Re: Don't Offer a Free Plan
#19Most MBA programs go over why you don’t want a small number of high paying clients. It’s the opposite of diversification and is a risk factor. In the situation they claim as bad losing 1 clients means losing 10% of your revenue!
I think this isn’t arguing that you should aim to have 10 (or 1!) high/paying clients, but rather that it is better to have 100 (or 1000) medium-paying clients than 10,000 (or 1,000,000) low-paying (or free) clients, because you are likely to underestimate the marginal cost of a single client, and at higher rates, this marginal cost is more significant. If you have 100 medium-paying clients then losing 1 is not such a big hit to revenue. If you have some kind of dynamic pricing, it seems reasonably likely that you’ll get a power law for how much clients pay, and you’ll be worried about the biggest client leaving even if you have lots of others.
Re: Don't Offer a Free Plan
#20One concept I like is the Premium plan that gives lifetime access to all features but only updates for one year. It can act as both the old-school software purchase or subscription depending on what the user prefers.
Atlassian does this, no? Or at least used to. I believe they've stopped now.