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Don't Offer a Free Plan
21–30 of 232 posts
Re: Don't Offer a Free Plan
#22Most 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!
Yeah, but that logic is really for the very small number of clients on a very high revenue per client.
I think the example in the article used such low numbers to make the calculation easier. In most cases, the kind of SAAS they are talking about would have at least one or two orders of magnitude more users.
Reshaping the question: would you rather have 50,000 users paying $1 or 1,000 paying $50 each? your MBA caveat largely becomes moot.
Re: Don't Offer a Free Plan
#23It is sad but true that users that pay less, or zero, are more demanding on customer support and make unreasonable demands via social. Had a guy this week using our free product that has 90% of the paid products features berating us on Twitter for not being 100% free and demanding we convert and rely on donations to support our 40 person team. Makes me regret having a free offering. In my 20 years doing software star…
My guess is part (not all) of this is due to people assuming that free offerings are already generating revenue in some fashion other than a direct payment (e.g., advertising for Google/Facebook), and thus they're still helping your business and entitled to support as much as anybody.
Whether the assumption is right or wrong for each business, it's not hard to see how we've gotten here.
Re: Don't Offer a Free Plan
#24I don’t really understand why this gets a domain name instead of being a blog post. I read it feeling like this was the result of some collaboration or consortium trying to ask myself if the author might have something to gain from it, when really it seems to just be the work of one person. But maybe it is good to have an entire domain for some reason.
Re: Don't Offer a Free Plan
#25Anecdata: 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.…
I feel like free plans work best for products with a business/enterprise side:
- where free users are an onramp for getting $x,xxx/mo-$xx,xxx/mo contracts with companies.
- where many, many free users are subsidized every time a company signs up.
Trello/Jira/Asana seem to fall pretty firmly into that territory.
On the other hand, those running SaaS with fairly low per-month subscription value (e.g. $99-150/mo, as a lot of smaller or bootstrapped SaaSes seem to charge [1]) wouldn't necessarily get much value from these users.
[1]: https://plausible.io/#pricing (just picked these folks at random)
Re: Don't Offer a Free Plan
#26Most 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!
Still it’s easier to support 10 users than a 100. Product may be simpler because of it.
Re: Don't Offer a Free Plan
#27It is sad but true that users that pay less, or zero, are more demanding on customer support and make unreasonable demands via social. Had a guy this week using our free product that has 90% of the paid products features berating us on Twitter for not being 100% free and demanding we convert and rely on donations to support our 40 person team. Makes me regret having a free offering. In my 20 years doing software star…
“ demanding we convert and rely on donations”
People whining for more is fairly normal. Wanting it for everyone in perpetuity is new.
Does everyone think most businesses are somehow ad supported?
Re: Don't Offer a Free Plan
#28The fact that I've seen this repeated so much tells me these SAASes are probably more reliant on the free users than they realize. Otherwise they wouldn't talk about it, because they'd have done it, and it wouldn't have been a big deal.
Re: Don't Offer a Free Plan
#29Free plans can be a viral marketing investment.
This is a "never do X" opinionated click bait (click bait because we are always interested in a confident never do X expert opinion vs. the less interesting reasoned debate.).
Re: Don't Offer a Free Plan
#30The 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!
The problem is that free users aren't a representative sample of people who'll pay. I remember a 37signals post that mentioned how something like 90% of their paying users were designers, but that was only 5% of their free users. If you optimize on a sample that's structurally bad, no matter how large it is, you'll end up building the wrong thing.