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Ask HN: Freemium: how far upwind should I stay

by nlabs on 3/12/10, 11:32 PM with 5 comments

Say you build a web app that cannot exist commercially without paying users (not a facebook). Yet you want to upwind the competition (to use pg's analogy) by being benevolent and offering free features - making it easy for users to get up and running with your software. The question is, when do you draw the line - when does a feature become "for paying customers only"? For example, how did Dropbox decide 2GB would be free - why not 10GB, why not 100 MB?

  • by patio11 on 3/13/10, 2:04 AM

    I segmented my probable market into two groups of customers, one which was numerically numerous and one which I felt would get the most value out of the application, and chose my pricing scheme such that the free version is close to worthless for group #2 except insofar that it demonstrates they'll have a positive experience with the paid version.

  • by skennedy on 3/13/10, 12:55 AM

    The approach I have always been taught is to make it so the user does not hit the "pay wall" within the first hour. First full day of use is preferable. If they are using the product for that full hour, their use of the site/product is becoming more than a passing interest. In which case, when they get to that barrier they are already invested mentally and now they need to decide how valuable your service is.

    In the case of Dropbox, you can store quite a few documents, pictures, and MP3s within 2GB. When you want to start backing up your whole hard drive, then you have committed to their product.

  • by nfnaaron on 3/13/10, 12:52 AM

    I was actually wondering that today with Lead Nuke: http://www.leadnuke.com/signup

    Their free and $10/mo plans both include "standard security." The $30/mo plan includes "Enhanced (SSL) security."

    Specifically I was wondering if the cost of an SSL certificate that browsers like was what influenced not including it in the lower level paid plan ($10/mo) or whether it was more to make the $30 plan more attractive. Or something else.

  • by p01nd3xt3r on 3/13/10, 12:27 AM

    I would look at what the feature cost me to offer and use that as the basis of my decision.