Little did we know when we published the "Reality of Freemium in SaaS" (PDF) report in early January 2010, it would hit such a nerve with the industry. In fact, you know we hit a nerve when I've been asked to speak at the Freemium Summit on March 26, 2010 in San Francisco, California to "bring a different view" to the mix.
Aside from being asked to speak at the Freemium Summit, the paper has been mentioned or used in a number of places...
Articles that used the paper as a jumping off point or looked at different aspects of it:
- "Why Freemium is Bad for Business" on ZDNet by Phil Wainewright
- Study: SaaS Pricing Is Still Opaque And Freemium Is Rare on ReadWriteWeb
- Justin Pirie's This Week in SaaS #10 - Interview w/ Lincoln Murphy about Freemium paper
- "Rethink Your SaaS Channel Strategies" on Sandhill.com - Looks at the Channels / Distribution angle
- "Users or Abusers" on PPM Today - looks at Users vs. Customers
Articles that used the paper to educate their customers or readers on the different aspects of Freemium:
- "SaaS Reality Check: Freemium is NOT a Business Model" on Under The Radar blog by Dealmaker Media
- "No Such Thing as a Free Lunch" on the Rackspace blog
- "Freemium Paper by Lincoln Murphy of Sixteen Ventures" on the Chargify blog
- This Week in SaaS for IT Management
The Best Feedback
While we had some great coverage, the best feedback has been from the readers directly. Some people chose to contact us privately via email while others chose to leave passionate comments in support of Freemium on the blogs. Passionate reactions means that we definitely hit a nerve!
The best feedback, and the thing that makes writing this paper worth it, was from founders or companies directly who had the following to say:
Executive from existing B2B SaaS company:
"...it is even causing me to rethink our Freemium strategy. The low conversion rate [common in the industry] blows me away. Something I knew, but until I saw it substantiated, I thought I was doing something wrong."
Startup founder:
"I've read your article and it was an eye opener for me in many ways. I'm currently working on [an application], which is designated to be distributed as a Freemium at least in the beginning. Now, your insights are making me reconsider many of my basic assumptions, which is a good thing to do when the project is still at early stage. So here are my thanks for your excellent work!"
Startup founder:
"I'm about to start a start-up targeting small and medium-sized financial institutions. Just wanted to drop you a note, thanking you for your paper on Freemium. [...] In my case, it helped me see that I would be using Freemium as a crutch to avoid having to sell (I am a technologist by background), and that providing services to users would be a potentially fatal distraction from acquiring and servicing customers."
Startup founder:
"I thought it was spot on, and reinforced my gut feeling that fremium is a waste of time, effort, and money for us. If you've solved a thorny business problem, then not charging for it will just lead to suspicion, plus your competitors are charging for their shitty legacy software. No business person is going to invest the time to configure your software if you think it's worth giving away for free."
Attorney that works with early-stage SaaS Vendors:
"This is a great reality check on the growing enthusiasm for the Freemium model. I think you put the analytical focus exactly where it should be: what's the quid pro quo? I'll definitely be employing your insights when we counsel our SaaS clients on pricing alternatives in their SaaS contracts"
These are the reasons this paper was written, not for all of the coverage (who would have expected a 23 page paper to go viral?) Even if the people that wrote to us or commented on the blogs do not do anything different, at least we got them and the industry to collectively re-address their business decisions. We really might have saved a company from failure and for that, writing this paper was the right thing to do.
If you need help with your Pricing Strategy, including Freemium, take advantage of our Pricing Page Tune-Up & Overhaul services or schedule a Quick Start session with Sixteen Ventures today.
Author: Lincoln Murphy (You should follow me on Twitter)