SaaS Builders: Beware The Free Trial • Hacker News Board

Re: SaaS Builders: Beware The Free Trial

#31

Post by herge » Wed, May 14, 2014, 2:11 PM UTC

TomGullen wrote: post #10

I'm struggling to see why bandwidth is costing you so much. We have a dedicated server with 10tb bandwidth on 1gbps port for under $100 a month. Also, if the podcasts are failing they can't be using much bandwidth? I think this is cognitive dissonance, you're complaining about free users costing you a lot of money in bandwidth yet apparently they are all failing (very few listeners?)

I wonder if instead of having 90 free days, he capped the free trial based on bandwidth. The more popular the podcast, the more bandwidth it would use, but the more likely the podcaster has revenu from ads which would scale (sub-linearly!) with the bandwidth costs.

Anyone could try it out with a small or starting podcast, but would have to pay out once it became popular.

Re: SaaS Builders: Beware The Free Trial

#32

Post by andyakb » Wed, May 14, 2014, 2:24 PM UTC

I agree that your free trial was at the very least much too long, and that the money back guarantee makes a lot of sense for a bootstrapped SaaS company [Jason from WPEngine strongly recommends this as well]; however, I would interpret some of your data a bit differently.

50% of your signups never uploaded a podcast, but once they did, 80% uploaded more than one. Your takeaway from this should be that you absolutely need to do everything you can to onboard the user and get them to upload their first podcast because once they do, they are much more likely to continue using the service. I am guessing that now that you have a money back guarantee your average customer will be more motivated than before, but you still need to work to build processes that help users get started and continue using the service, otherwise your churn is going to be horrible.

Re: SaaS Builders: Beware The Free Trial

#33

Post by TomGullen » Wed, May 14, 2014, 2:26 PM UTC

derickbailey wrote: post #17

TomGullen wrote: post #10

I'm struggling to see why bandwidth is costing you so much. We have a dedicated server with 10tb bandwidth on 1gbps port for under $100 a month. Also, if the podcasts are failing they can't be using much bandwidth? I think this is cognitive dissonance, you're complaining about free users costing you a lot of money in bandwidth yet apparently they are all failing (very few listeners?)

I'm serving files from Amazon S3. This gives me the benefit of world class storage and streaming, without having to own / run the servers myself. Bandwidth from them is "cheap" at $0.12/GB... but with an average podcast of 30 minutes being 25meg file, an episode with 1,000 downloads is 2.5GB of bandwidth. i have a customer that averages 20,000 downloads per episode, and a bunch of others with close to 1,000 downloads…

I know Cloud is appealing for the scaling side of things, but you could save a lot of money using dedicated servers from other providers. Something to consider anyway.

Re: SaaS Builders: Beware The Free Trial

#34

Post by billmalarky » Wed, May 14, 2014, 2:54 PM UTC

TomGullen wrote: post #10

I'm struggling to see why bandwidth is costing you so much. We have a dedicated server with 10tb bandwidth on 1gbps port for under $100 a month. Also, if the podcasts are failing they can't be using much bandwidth? I think this is cognitive dissonance, you're complaining about free users costing you a lot of money in bandwidth yet apparently they are all failing (very few listeners?)

What host are you using?

Re: SaaS Builders: Beware The Free Trial

#35

Post by brianbreslin » Wed, May 14, 2014, 2:58 PM UTC

Has anyone found any good ways to force free users to upgrade to paid? i have a SaaS with a freemium option that has led to 2500 free users and only 1% conversion to paid. The support costs of the free users far outweighs the paid revenue. My guess is most of those free users won't upgrade, but has anyone had success in cutting the dead weight/forcing upgrades?

Re: SaaS Builders: Beware The Free Trial

#36

Post by DenisM » Wed, May 14, 2014, 3:01 PM UTC

The salient point: author has replaced free trial with money back guarantee and his signups did not decrease!

Anyone has similar experience with removing free trial? I wonder if it's actually a trend or a single occurrence.

Re: SaaS Builders: Beware The Free Trial

#37

Post by loceng » Wed, May 14, 2014, 3:05 PM UTC

brianbreslin wrote: post #35

Has anyone found any good ways to force free users to upgrade to paid? i have a SaaS with a freemium option that has led to 2500 free users and only 1% conversion to paid. The support costs of the free users far outweighs the paid revenue. My guess is most of those free users won't upgrade, but has anyone had success in cutting the dead weight/forcing upgrades?

Well, you'd have to change the freemium plan. I suppose at this point because something was promised, an expectation set, that you'll perhaps upset some people with changes. I would look to see who the top users are usage wise (perhaps cost wise on your part) and what features they use. I imagine there'd be numbers that you could group, perhaps even number of actions per month, etc..

If the top users under freemium no longer want to use the service if you start including them in a paid group, then you have a problem and might have to rethink pricing or the business model overall.

Re: SaaS Builders: Beware The Free Trial

#38

Post by GFischer » Wed, May 14, 2014, 3:18 PM UTC

scolson wrote: post #7

I am a huge fan of the unlimited (duration) free trial. How many of us sign up for something, poke at it, forget for a few weeks, and then go back again more seriously? I'm sure I do it all the time. By the time I remember, I am most of the way through a trial period and haven't actually evaluated wether the product is a good fit for me or not. Regardless of how long your trial runs, people really need to bake in res…

There's a variant, which I really like, which is the method Beyond Compare uses:

30 uses trial - every time you use it you can use it for the entire day. If you don't use, it doesn't detract from the trial.

Re: SaaS Builders: Beware The Free Trial

#39

Post by ricardonunez » Wed, May 14, 2014, 3:20 PM UTC

brianbreslin wrote: post #35

Has anyone found any good ways to force free users to upgrade to paid? i have a SaaS with a freemium option that has led to 2500 free users and only 1% conversion to paid. The support costs of the free users far outweighs the paid revenue. My guess is most of those free users won't upgrade, but has anyone had success in cutting the dead weight/forcing upgrades?

Have you tried removing more features in the free version? It may be you solved the problem to almost all of them and they don't see a reason to upgrade. You need to figure out if is a pricing or a business model issue so you need to do a lot of testing. If you are talking about your WordPress Backup service, in one of my projects we provide WordPress services and I can tell you that most of my clients rarely get over 200MB. Also, if you have a dashboard or a newsletter, try running a special discount to older users (split test it). Hide the free version for a month or two and see if conversions increase.

Re: SaaS Builders: Beware The Free Trial

#40

Post by camus2 » Wed, May 14, 2014, 3:27 PM UTC

scolson wrote: post #7

I am a huge fan of the unlimited (duration) free trial. How many of us sign up for something, poke at it, forget for a few weeks, and then go back again more seriously? I'm sure I do it all the time. By the time I remember, I am most of the way through a trial period and haven't actually evaluated wether the product is a good fit for me or not. Regardless of how long your trial runs, people really need to bake in res…

the problem is often unlimited free trials == subsidized by paid customers.

I'm sure if Heroku, for instance, was a paid product without free trial,it would potentially cost less to paid customers. This and services like mongohq,mongolab,... clearly subsidize free accounts with paid ones.

I think the amazon free tier model is a better model.You have one year to mess around but you still have to pay if you abuse resources.

Of course in the podcast hosting space,things are different since there is a lot of competition. Not that much in the paas market,where good services are rare. Most paas suck,we all know which are the good and the bad ones.