say-no-to-free-750x410 Freemium vs. Free: Why We Ditched Our Free Plan

wrote this on April 15, 2014, 59 People Are Talking About It

As we came out of private Beta, we announced a pretty unpopular decision at Trak.io: we removed our free plan (and replaced it with a $9 per month plan).

I wanted to explain the reasons behind this and why we think it’s the best decision for our company and our paying customers.

Hopefully, other SaaS founders can take some insight from this and think hard before jumping immediately into Freemium! Because if you aren’t careful, you’ll actually just be giving away your product for Free!

Reason #1: ‘Free’ Is Not A Competitive Advantage In Business

One of the most prominent details we emphasized to everyone we spoke to in the early days of Trak.io was that we would offer a super generous Free plan. A free plan so generous that an average funded startup would very rarely outgrow it.

We would have floods of users dropping our competition, ripping out their old code integrations, and flocking to Trak.io because we would be Free. Free as in air.

We thought that the monthly cost, whether it was $0 or $499 per month, was how all startups chose their SaaS software (wrong!).

‘Free’ is not competitive advantage because your competition could easily do the same thing overnight. There’s no proprietary algorithm involved. No charismatic user interface to create. They just add a free plan overnight, and section off a bunch of cashflow to cover the burn.

If your competitors can copy you overnight, it was never a competitive advantage.

Reason #2: Free Users Help You To Build A Cool Product. Paying Customers Help You To Develop A Valuable Product

After introducing our $29 Priority Access program, offering Beta waiting list subscribers an instant queue jump, we started to see a huge shift in our customer development. Features that we’d previously emphasized because everyone said they were ‘cool’ no longer came up in conversations.

Instead, we started to hear about more ‘mundane’ ideas, but they had direct business value. People started asking about scenarios we’d just not thought about. Our paid queue jump users asked for Salesforce integrations. Multi-permission multi-colleague access. Custom data exports. Easier integration’s so marketing didn’t need to pester IT as much.

In contrast, our free beta users had suggested more icons for the metrics dashboard. For the ability to upload individual customer photos. For custom colour coding labels.

I’m not saying that free Beta users aren’t valuable. Neither am I saying that paying customers are the best way to innovate creatively as an entrepreneur. But, if you want to build something that people will pay for, then you should pay close attention to what your paying customers ask for.

Reason #3: Free Users Require The Most Support

Generally speaking, our Beta users who couldn’t justify a $29 expense on their business credit card, also couldn’t justify having their freelancer, agency or developer to integrate Trak.io into their app.

Thats ok. We have a pretty outdated integration process that we’re working on, and while we don’t have any automated data capture tools or plugins, we’re happy to help people write code. Literally, I’ve written the entire custom Javascript for dozens of applications so that people can jump straight into Trak.io.

But that takes quite a lot of time. And usually, those users are the ones who need the most hand-holding through the first few days of using the tool too.

In stark contrast, the feedback we usually get from our paying customers is “Installation was a breeze for our developer” or “Point us to your documentation, Mike (our CTO) will sort the rest”.

Our paying users just had more resources available to benefit the most from Trak.io with minimum input from us. A junior/mid developer capable of delivering suitable Trak.io customer support will cost us around $100-$200 per hour (if we hired someone). With a SaaS product costing only $9-$299 per month, we need to ensure we’re able to support all our users without burning tons of money in support staff.

At current count, we have 1,460 users registered with Trak.io. Some of those are still free users from the Beta who have a couple of weeks to decide to pay, or leave the platform. Quite simply, there’s no way that with our current team of 3 people, we could support 1,460 users effectively and to the level they expect from us.

But, if that user count was a more manageable number in the hundreds, and those users were paying us, not only could I continue to personally say hello to each user to welcome and onboard them, we could also hire a dedicated support member of staff.

Reason #4: We Don’t See Any Viral Benefit Of Thousands Of Free Users Telling Thousands Of Other Free Users About Us

Having thousands of users talking about your product is great. But not if all of those users only talk about your product because it’s free.

Honestly, how many people would you refer to Google analytics if it cost you $49 a month? Probably zero. It’s not saying much about a B2B product if it can’t add more than $49 of value to your business a month.

When a ‘forever free’ user refers one of their buddies because “Oh yeah it’s a free analytics product!”, do you think that new person is going to become a paying customer?

Having 10,000 free users who have no intention of ever paying you is not freemium. It’s just a free product.

We don’t want our viral engines of growth to rely on the fact that our product is free. We want users to refer their peers because we bring massive value to their business, an order of magnitude more than the couple of bucks a month we charge them.

Reason #5: We Get No Value From Their Data

At Trak.io, we aren’t selling aggregated data from the millions of people our software is tracking. We just provide the platform. The data belongs entirely to our respective customers who stored it with us.

Other analytics companies (and a few other B2B SaaS platforms in different industries) offer a free service in exchange for you giving them total access to resell and use your data. They take the aggregate data (or cookies), and sell it to the highest bidder – usually market research firms or ad-targeting networks.

We think thats just creepy.

Because we don’t do any ‘backdoor sales’, there’s no way we could monetize the data that our free users would bring to the platform.

Reason #6: We Want To Build A Sustainable Business Around A Product People Love (Enough To Pay For It)

The success stories of Freemium usually get a lot of spotlight. However, no one really talks about the cases where freemium bankrupted startups. Or crippled a startups efforts to monetize their product later (because everyone was so used to it being free).

People love to point out Mailchimp’s freemium model:

“They’re worth a Billion dollars and they have a huge free plan!”

What they fail to miss, is that Mailchimp launched in 2001 and spent 7 years building a massive product with tons of features, and built up to 85,000 paying customers, before introducing a free plan in 2008. It actually took them a few years to even offer a free trial!

Once you have a product people love enough to pay for, you have a healthy cashflow, and you’re confident there’s a viral engine of growth in your product… thats when you should consider introducing a freemium model in your B2B business.

If you’re in B2B, you need to focus on building a solid, sustainable business built around a product people love.

Reason #7: We Totally Changed Our Pricing Metrics, and Miscalculated Our Costs

During the Beta, we hinted to users that our pricing would look something like this:

Free, $29, $49, $149

At launch, our pricing now looks like this:

$9, $49, $149, $299

Initially, we were going to offer only 6 months data retention (we figured startups only care about short term data) which meant our costs were pretty much based around only keeping a few terrabytes on high spec servers at a time.

In reality though, we learned real businesses want to have the peace of mind of knowing they can run annual reports on their data and compare Q1 this year to Q1 last year.

This meant we instantly had to double all our assumptions on server costs!

We also intended to charge based on the number of visitors to your website/app. We soon realised this was a metric totally uncorrelated to the revenue or success of a product, and scaling on that just wasn’t a meaningful value-based metric.

As this meant we would now be storing a lot more data for an average account, as we were now storing potentially millions of anonymous visitors data, we had to increase our server cost estimates again.

Also throwing our cost estimates off were assumptions about how many events an average app would track. With similar products like KISSmetrics and Mixpanel, you’re charged on the number of data points you store. While this does have a a direct correlation to our costs, we soon realised it was unrelated to the business value the user gained, and actually created a bit of anxiety when users were first integrating:

“Which events should we track, we don’t want to track too many things because of the event storage limits!”

In reality, I want our users to track as much as possible because they’re going to kick themselves in 3 months when they learn about a problem in a workflow, but they didn’t track every individual step in that particular process.

In Summary

I’m not trying to say that a B2B SaaS app shouldn’t ever consider Freemium. And I’m not saying there aren’t great examples of it working.

I’m also fully aware that we’ve pissed off a lot of our very early Beta users by dropping our free plan.

However, I am saying you should really analyse your reasons for choosing freemium, and make sure you aren’t actually choosing ‘Free’. Free is just a vanity growth number that’s going to burn a hole in your cash.

Freemium should be a customer acquisition tactic.

We think the introduction of our $9 Solo plan will allow us to separate the free users who have no intention of ever paying for software, from the early-stage Bootstrappers, and we’re pretty happy with the decision so far!

Please leave a comment if you’ve had to approach the ‘Freemium vs. Free’ decision in your startup!

UPDATE Tues 5th April 2014:  Edited to remove the term ‘Freeloaders’ after a few readers correctly pointed out this was a pretty douchebag term to use, especially when WE were the ones who put the product out for free in the first place! I didn’t mean to offend anyone when I was writing the first draft at 4am. Lesson – get proof readers!

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Written by Liam Gooding

Liam is the cofounder and CEO of Trak.io. Engineer turned entrepreneur, he writes about growing SaaS startups and the evolving field of customer success management. He wrote a book, "Growth Pirate!" which discusses data-driven growth strategies for startups.

  • Stefan Haflidason

    Some good points here, but I wonder if you might find an alternative way to refer to users of a free plan as ‘freeloaders’ is pretty negative.

    • http://blog.trak.io/ Liam Gooding

      Hi Stefan, yeah totally agree and something that was echoed over on Hacker News. I’ve just updated the article!

  • swanify

    Great article, and totally agree, when we first launched our startup we got thousands of sign ups from ‘freeloaders’ and they never had any interest in paying for the product.

    • http://blog.trak.io/ Liam Gooding

      Hey thanks. What was the product (for other readers of your comment to go and take a look at)?

      I think it’s a fine balance, especially in the really early days, of having enough free users around that you have some opinions and ideas around to ‘make something cool’ but at the same time, having paying users around so that you make sure you’re building something to deliver business value.

      • swanify

        It’s http://www.enquiryhq.com – I guess it is a fine line, when you’re trying to validate a market I’d say it’s better to have only paid plans, and then introduce a free plan when you have the data to support what would work as a free plan.

        • http://blog.trak.io/ Liam Gooding

          The app looks sweet! :)

          Yeah thats the thing, nothing is set in stone and just like Mailchimp did (it took them 7 years!), once we have more data and a stronger company/product/cashflow/funnel I’d love to re-explore freemium as a growth vehicle.

          • swanify

            Thanks Liam, yea totally agree, the best thing a startup can do is get money through the door that allows them to grow etc, supporting 100′s of non-paying customers is not practical at all!

  • yazinsai

    Good point made around the quality of feedback you get from Free vs. Paying users. Don’t you think having a restricted free plan may have worked better than not having one at all?

    • http://blog.trak.io/ Liam Gooding

      I do think we should have set expectations on the free plan sooner, but hindsight is a fantastic thing!

      Since making this move, I’ve already had 35 emails in the last 2 hours from people asking for an uber restricted free plan for testing, developing plugins, open source etc. and I think thats one area I’d totally overlooked. We want to be 100% “developer friendly” but at the same time not affecting our business-case users.

      I guess developers on our developer plan will offer the best feedback about integration process, but we need the paying “business users” of the paying plans to give feedback on using the product itself.

      (Obviously I’ve generalised and stereotyped those 2 user groups here, not saying they can’t be the same person!)

      • yazinsai

        Best of luck Liam!

  • James Ludlow

    Any data on how many people have clicked the ‘Try Trak.io For Free’ link at the top of the page? :D

  • Kip Morton

    Good post and totally justified. I want to incorporate trak.io into our app once the initial low volume beta testing is complete. Funnily enough we decided to offer a trial period for people to get to use the full service before having to decide whether they like it enough to keep it and pay a small fee for it or it is disabled until they delete it or cough up. You may have annoyed some people who wanted the free service, but you’ll get so much more value from people willing to pay.

    • http://blog.trak.io/ Liam Gooding

      Thanks Kip.

      Yeah we’ve kept the 30 day free trial around and I think we’ll see if that’s long enough for most people. What’s the free trial look like in your product, 14 day, 30 day? Have you experimented with different lengths?

      • Kip Morton

        We are considering 3 months as a way of getting our app into people’s daily lives. The vitamin vs aspirin is very much active in our app – you can use it every day for pretty mundane stuff (I know I’d use it all the time) like a vitamin pill, but every once in a while it could really save your butt (aspirin) and it would be hugely valuable to someone in this scenario. I want to give people long enough so that they get to use it regularly (I hope) but that it increases the chances of one of those aspirin moments which really add value, turn customers into fans and get great word of mouth virality.

        I am hoping to do a larger Beta once we have the iOS/Android and desktop all working together with a bunch of students at a University and track usage and see when people hop over that mental hurdle of “this is a free app” to “I love this and am willing to pay for it”. I am sure it’ll be different for everyone, but I think 3 months is probably a good start length. Tracking losses and signups before the 3 months and then at the 3 month period might be enlightening.

        • http://blog.trak.io/ Liam Gooding

          @kipmorton:disqus I love that you’ really thought the strategy through (and not just gone for a free trial ‘because everyone else does’).

          If you’re going to be asking University students to pay, unless they’re in your ideal buyer persona remember to take their behaviour with a pinch of salt. In the UK, University Students have one of the highest *disposable* monthly incomes, and yet are famous for being extremely frugal about important things (groceries) but totally liberal with luxuries (iPads, £5 each drinks in a bar…)

          • Kip Morton

            Thanks for the wise words about students. I suppose it could become a double edged sword, if they love it you have a highly concentrated viral community, but if they don’t it will be killed off pretty quickly (if only locally).

            I decided on a free trial period predominantly because I hate the freemium versions. It’s never the full version, there’s always annoying banner ads and until you pay for it you never know if the full version is really worth it. If you go for a car test drive you don’t get the base line “L” model with the smallest engine… I am hoping that if there is sufficient time for people to make their mind up based on what the full version is, you only get ‘real’ customers after the 3 month period, similar to your reasoning for ditching the free plan.

  • http://visitorengage.com/ Jagan Ganti

    Great post Liam. Just what I’m going through right now with my bootstrapped product. Think I should ditch the free plan, but that somehow makes me believe will have virality as I got a backlink (watermark) to my SaaS offering visitorengage.com We are experimenting with pricing and miscalculated the costs too for an enterprise customer. We didn’t know how much to quote and were generous will “all things unlimited” :)

    Do you think the virality with a ‘powered by’ link on the customer facing site works? We got 200 users right now (since Jan).

    • http://blog.trak.io/ Liam Gooding

      Hi Jagan,

      Definitely! “Powered by” is a great example of when virality from Free users is working.

      - Mailchimp add a badge to every email
      - Slideshare adds a ‘powered by’ to every deck embed (as well as using display adverts)

      With Trak.io, short of forcing all free users to add an image into their websites footer we didn’t really see an *innovative* way to incorporate ‘powered by’. But in your case, it sounds like it’s working great as it’s built into the product itself.

      Also, I’m definitely not saying we’re experts at “Freemium vs. Premium” at Trak.io yet!

  • http://www.commissioncrowd.com/ Laura McGregor

    Some great points here and interesting food for thought. I disagree with your approach though, essentially it sounds like you have reprimanded your early advocates and gone against your word. Things change and you got some stuff wrong. We all understand and get that. But why not just honor your commitment to existing users and take away the free version for new users? Or change some of the parameters of what is offered in the promised free account. Thanks for writing about this though – it’s really helped me clarify my position on a few things. Wishing you every success!

    • http://blog.trak.io/ Liam Gooding

      Hey Laura,

      Thanks for the feedback!

      We’ve certainly done nothing internally to reprimand early Beta testers, and the only word we went back on was changing a free plan to a $9 plan because we realised that was the only way we could build the valuable product that our userbase as a whole is expecting from us.

      What’s not mentioned in this post is the hundreds of individual conversations I’ve had with all of our free users to understand their unique circumstances, and we’ve handled everything on a case by case so far. I think we’ve had 6 “rage quits” out of well over 1,000 active users because of this change.

      Sincerely though, I love and admire the fact you’ve challenged our position here and it’s exactly the reason I love the startup community so much: there’s no right or wrong answers and we’re all helping each other to find our path to something that works for our companies.

      If there weren’t any bold people like yourself reading my blogs, I think I’d be well and truly screwed!!!

  • calitalieh

    Excellent, post, and bravo for the update/edit. That really demonstrates the value system your company has, and the relationship you want with your community.

    • http://blog.trak.io/ Liam Gooding

      Thanks bro, I’m never too proud to admit when I’ve made a mistake and I’m known for being a bit hyperbolic sometimes!

      (By the way, sorry for replying so late the default comment order in Disqus is a little annoying, makes it easy to miss comments if you’re used to just checking the top for new stuff!)

  • http://www.iamdennisfield.com/ Dennis Field

    This came out at the right time! I’m sitting in the same spot with my bootstrapped start-up. I’ve been teasing a few plans and have been offering a free invite only plan for users for a while. Yes, it is great that they love it and use it, but you have to wonder if it is because it is free? We are getting ready to add some new features to increase value within the app, but as soon as we do, I’m confident we will be eliminating the free plan.

    • http://blog.trak.io/ Liam Gooding

      Hi Dennis – I’d love to see the results of how that goes? Will you be writing it up as a blog post?

      • http://www.iamdennisfield.com/ Dennis Field

        @liamgooding:disqus Yes, I plan to write about how that goes for us. I’m curious on how that will also improve engagement within the product. It’s much easier to “forget” about something that is free. Talk Soon!

        • http://blog.trak.io/ Liam Gooding

          @dfield1:disqus awesome, ping me when you write up the post, I’d love to share it out to other Trak.io users!

          • http://www.iamdennisfield.com/ Dennis Field

            Will do!

  • http://noralandisshack.com Nora

    Great post, Liam! I’m curious, what do you think free but limited accounts? For example, people can use the product for free with some really basic features and capabilities, but if they want to use your product for more advanced tasks or to process more data they have to pay.

    • http://blog.trak.io/ Liam Gooding

      Hi Nora,

      Maybe the best answer would be: you tell me! :D

      It would be great to see the data on customer.io’s free plan. i.e. how much total revenue has been made since launch of the free plan where customers have actively used the free plan (i.e. not just as a 30 day free trial) and then upgraded to a paid plan at a later date, vs. the support and hosting costs of those free users.

      When we signed upto customer.io, we used the free plan as a “developer free trial” – not a usable free tier – before we stuck in our credit card and upgraded to the paid product. I think in this case it can be really useful.

      I know customer.io is pretty mature and you’ve already got a product thats safely at product/market fit, so the example isn’t totally parallel to our scenario blogged above, but I definitely think you should convince Colin to let you put that data up as a blog post! :D

      Will be good to link to it as a “other side of the discussion” reference so that early founders don’t just assume it’s a black/white situation

  • http://www.cazoomi.com/ Clint Wilson

    Liam, great read & $9/month…I think you could raise your prices to $99/month as a starting point as it is well worth every penny for the solution your team has built out.

    ~Clint
    @cazoomi

    • http://blog.trak.io/ Liam Gooding

      Thanks Clint! :D Great to have your support (and to have Cazoomi as a paying customer!)

      • http://www.cazoomi.com/ Clint Wilson

        I’m sure you will have 1000s more by the end of the year so keep it up:)

        ~Clint
        @cazoomi

  • David Szabo

    Really great post, thanks Liam! We also had our priority access program to avoid attracting never-paying customers, after finding out that most of our signups never had the intention to convert into paying customers.

    • http://blog.trak.io/ Liam Gooding

      Hi David – great to hear! Did you write up the results of that? I’d love to share it out to my followers

      • David Szabo

        I’m working on a blog article about it, I’ll let you know, when it’s ready.

        • http://blog.trak.io/ Liam Gooding

          That would be awesome! Ping me on @liamgooding

  • https://userbin.com/ Johan Brissmyr

    Being compared to other success stories happens all the time. People often tend to give advice that worked for well them or for other companies they’ve read about on Hackernews or Medium. Your thoughts on why Mailchimp´s freemium model might work in some cases, but not necessarily for all SaaS businesses are spot on.

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  • http://www.arg0s.in/ Aravind Krishnaswamy

    Interesting article, @liamgooding:disqus. Some of the other analytics providers appear to leverage some degree of virality by having people gain additional ‘points’ towards a free plan by sticking a logo and link back off their home page. By not offering a free plan, do you feel greater pressure towards funnel conversion? Can you share some stats on how well that’s working for you? Thanks for a great post.

    • http://blog.trak.io/ Liam Gooding

      Hey Aravind,

      Thats a really good question about virality and our competitors. Thanks for asking:

      Firstly, we don’t have the data yet on how removing this free plan will affect revenues/costs/growth, and on this one I think we’re going to wait a few months before releasing it too so that we can have retention comparisons.

      Regards to virality: in terms of adding logos and banners to footers, we’ve not gone there as we think there’s something much more innovative to be done around virality for a company like ours. For example, Mixpanel have been running their ‘badge’ program for years, but when you run a scraper to look for it, you don’t come up with as many as you’d expect.

      We aren’t strictly a web analytics company, so our customers website footers isn’t the only channel we can “piggy back” on to achieve distribution. We have a lot more options open to us and we’re more likely to explore those in the future.

      I’m not saying that we’re dismissing any viral benefit and also that cost isn’t the only driving factor. I think something we want to conquer is achieving virality WITHOUT giving stuff away for free. We think when we crack that, we’ll have a much more powerful viral component.

      • http://www.arg0s.in/ Aravind Krishnaswamy

        Very interesting! I’d love to hear more about your acquisition and retention approach as you go along on your journey. All the best, and it’s wonderful to see a new perspective.

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  • Aaron Zakowski

    Thanks for a great analysis @liamgooding:disqus. We recently made the same decision at Viewbix to get rid of our Freemium plan. We had tens of thousands of free accounts using our video optimization platform who never had any interest in paying for our product. They were a drain on resources and held us back from developing an even better product for our paying customers.

    I also want to say that I’m very impressed with your ability to write an article that analyzes the Freemium debate in general while still doing a great job of promoting the value of your company and product. After reading, I plan to go back and check out your product again.

    • http://blog.trak.io/ Liam Gooding

      Thanks Aaron

      Looking at Viewbix I can see you also added a crazy cheap plan (19 bucks) like we added a 9 bucks plan. I think when the tool is clearly a business tool (i.e. a company branded video player), 19 bucks is less than the cost of buying cakes for the office on a friday, so shouldn’t receive any friction from your business customers. And especially with video streaming/hosting I’d imagine your costs are even higher than ours per free user, so as an outsider it looks like you guys made a great decision!

      Awesome to hear you’ll check out the tool too – just ping me after signing up if you need a hand or have any questions. We have a HUGE update coming in the first week of may that will have a huge positive impact on integration for all new customers :-)

      • Aaron Zakowski

        Liam, It’s funny you mention our “crazy cheap plan” at $19. Until very recently, our most expensive plan was only $19. We just implemented a big increase in pricing to reflect the value that our best customer are getting from Viewbix. Clearly, our pricing model was pretty screwed up until recently.

        • http://blog.trak.io/ Liam Gooding

          Well the first company I compared it to was Wistia (thats who we use for the Trak.io video on the homepage!) which is $25+ so I think $19+ is really cheap (assuming viewbix can host my videos too)

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  • Daniel Kohn

    Great article. didn’t read the other comments so maybe this has been covered, but I think free works well in cases like fresbooks where you get to start with 3 companies to try it all out and then start paying as you need to invoice more companies. Clearly, anyone who is serious about sending invoices will end up adding more than 3 companies quite quickly and end up having to pay but the first 3 a free to give users a taste. It’s the same with Wistia – they give away the first 5GB for free.

    • http://blog.trak.io/ Liam Gooding

      Hi Daniel,

      Thanks for reading the post – no worries about the comments there’s quite a lot on this post (our personal record actually!)

      I think in both of these cases mentioned (Freshbooks and Wistia), the free tier isn’t about product development, early viral growth and also not something done by early-stage companies. It’s a case of capturing market share by very established companies with a fully “finished” product, lots of funding and lots of revenue already in the millions per year.

      Wistia didn’t always offer a free plan, in fact they started off charging a few hundred bucks a month only (if I remember). They didn’t add freemium until quite into their journey as a company, and they acquired all of their first customers through hard outbound sales and referrals from paying customers.

      • Daniel Kohn

        Good points. Didn’t think of it like that. By the way, your platform looks really cool.

  • http://www.crocagile.com/ Shayn Baron

    Liam, great post! We struggled with the idea of freemium for quite some time. Eventually we decided against it. Our decision was based on supporting a small bootstrapped team. We even went a step further and required more information at signup (tell us about your team). This approach has been wonderful because those who sign up, end up as customers. It’s a growing manageable stream. It’s truly amazing when you collaborate with early adopters/customers and build your product together. Thank you for sharing this. You can check out how we hacked our signup here https://blog.crocagile.com/growth-hacking-your-signup-form/ Cheers!

    • http://blog.trak.io/ Liam Gooding

      Hi Shayn,

      Love the post – 3 months later, how is it going?

      We’re also requiring more and more information from signups. I think as a startup you’re initially very nervous about the value you’re offering, but when you start to accept that 14 (or 30) days of your product for free is extremely generous, asking for some basic information about their company starts to make a lot more sense.

      • http://www.crocagile.com/ Shayn Baron

        Hey Liam,

        I agree!

        It’s been a great filter for us! It’s much easier to engage with prospects and customers when you have some context. Our conversions, churn, and customer feedback have really improved with the required form. We love collaborating with other Crocagilers :) I think down the road (as we grow) we’ll remove it. For now, it allows us to focus on building an awesome product with a strong customer base.

  • http://process.st/ Vinay Patankar

    This was an awesome post dude! We also moved from freemium to trial recently – I just wrote a post about why we did it and didnt realize but named it the same as yours :P

    http://www.process.st/2014/07/freemium-vs-free-trial-why-we-ditched-our-free-plan/

    • http://blog.trak.io/ Liam Gooding

      Hi Vinay,

      Love it! Great to know I’m not the only one who realised this was a radical business shift and so requires a radical post name!!

  • http://www.fishbowlworkforce.com Malcolm Felt

    Hey Liam, Just curious. When you announced that the free version was switching to a paid version, how many of them decided to continue using and switch to a paid version?

    • http://blog.trak.io/ Liam Gooding

      Hi Malcolm,

      Sorry for the delay replying back!

      To answer your question anecdotally, we lost a LOT of registered users who no longer fitted our ideal customer framework anymore. i.e. these were users who will always be looking for the next free platform.

      These were in the thousands… 99% gmail, hotmail, yahoo etc. email addresses too which is interesting.

      We did however create a “Bootstrapper” plan specifically for these users and quite a few took it up. With these users, we know they’re willing to spend “something” on their business so there’s some validated learning to be had from these users.

      However, we were left with a handful of users who definitely fitted our ideal customer framework and from these users, we started to build out a much more focussed product.

      In an ideal world, we would have published a price that was a lot higher than we expected (easier to lower than increase prices!) so users entering our Beta did so with the knowledge that we were building a premium offering for fast growing SaaS companies.

      We messed up on that one for sure.