Mailchimp for example spent 8 years refining their product and pricing before they felt confident a Freemium offering would be beneficial. While companies like Dropbox, Evernote and Slack embraced Freemium from the beginning and the majority of their success is based on their Freemium model.
That said, businesses that target markets above 100 million, can be quite happy with 1% conversion rates as 1 million paying customers can generate an extremely healthy business.
My general feeling is that it is extremely important to truly understand what customers value in your product before embarking on a Freemium journey. This need not take eight years like Mailchimp, but really understanding and your market for a period of time prevents the guesswork associated with launching Freemium from day one.
Also you don’t need to be worried about not launching, you can always introduce Freemium when the time is right.
This quote from a recent article I read encapsulates my current thinking:
Freemium is definitely something I want to explore in the future but in the first instance I want to measure and understand value. That said, I will have a Free Trial Version so that at least allows potential customer to access the product before committing.
The evolution of the product over this time has been amazing to see and the sheer power of the device is something to behold. The new A14 Chip in this latest iPad has some [almost] unbelievable specs and the fact that it works with Apple Pencil 2 opens up a world of opportunities for this mid-level device.
It is incredible to think that on average over 50 million units have been sold each and every year since it was first launched.
While I haven’t given up my laptop yet, I know many people who regularly use an iPad as their main computing device.
I remember when it was launched initially and the amount of criticism that both the product itself and the name received.
I won’t be buying an Air just yet – but the blue one does look pretty sharp!
Last year I ran 1,000km in a year for the first time. This year I decided to do it again. I find running a great time to think away from everything else. I also haven’t had a lot of work this year so I’ve been setting a few other goals along the way
Running a half marathon a month (4 out of 8 achieved to date)
Running 200km in month – this one was quite tough
With these other targets my overall milage has increased and sees me completing the 1,000 four months earlier then last year.
Quite often things take longer then expected! But today marks the official start of something new.
Ive been trying to get something off the ground for over 12 months and after a few misguided attempts today marked the incorporation of a new business.
We’ve got a lot ahead of us before we’ll be in a position to talk about it but it is a great feeling to have my own business again.
Today marks the point where various prototypes from the last 6 months get put to the side and we start development of what will hopefully be v1 of our product.
Getting started is always a hump to get over, but while we have lots of challenges ahead of us as we begin to build a new business from the ground up, we now have a single minded goal and focus to aim at.
I’ve found there 17 Awesome Apps for Architects and Designers page a place I return after first seeing it a couple of years ago. It is great to see the apps that people are creating but I also use it to see if there are any potential gaps that I might be able to fill.
I can see a couple and am starting to explore and prototype some things to see where this may lead.
The posts on the Architizer instagram channel also provide some very useful inspiration and generate a lot of thoughts around some of my ideas.
This is a tougher question for me as there is no clear cut answer and the ideas I have are spread across all platforms – web / phone / tablet / desktop. All platforms have different pros and cons and also require different development skills.
I’ve been developing web based apps for over 20 years. The original ARCHICADselect Website was powered by early ASP and SQL Database. This evolved over time and became a whole front and back office system integrated with accounting, support, payments, subscriptions.
More recently I have been learning iOS development with Swift and SwiftUI. This has certainly been fun and has been great to see some early ideas come to life on my iPad – even if they are very primitive!
When considering platforms I’m also coming back to business models like subscription and freemium.
Freemium is where you have a Free Version and a [paid] Premium Version of the software. The general idea (and the details should be a post on themselves) is that the Free Product is a marketing Tool to capture as many users as possible and then convert a number of these to paying customers.
A key consideration with regards to Freemium is the “cost to serve” that is, how much does it cost to serve each freemium user. There are many businesses that have failed purely due to the excessive costs associated with supporting their ‘free’ users.
A fairly simplistic view admittedly is that free customers on a “web based” system will have costs that can increase significantly as the number of customers increases. While a piece of software installed on a users iPad has a very margin cost to serve which (should) stay under control with large volumes.
This is not the only consideration but an example of how different platforms can have different affects. Like I say Freemium is a strategy in itself and I’d be jumping the gun a little to be deciding my business model detail without first knowing what I am developing.
In short, this is one area I still need to give considerable thought, though based on some prototypes to date I can at least reduce the options to web or iPad – or ultimately maybe a mix.
For those of you who know me or are readers of this blog you’ll know I have a passion for creating business models based on recurring revenue – the majority of my consulting projects have been based on this aspect of business.
While Salesforce is generally credited with making Subscription based Software / Software as a Service mainstream, the last 20 years have seen
Subscription businesses build revenue over the long term so have high cash requirements during the short to medium term. However, the pay off, if executed well, can be very rewarding.
Another advantage is that the cost to get started can be very low if based on a monthly model. This is not to say that sales are or will be easy – value still needs to be delivered at any price – but having a fee based on a period of time reduces risk for the customer.
The flip side of this is of course the ability for customer to stop paying if they don’t see value. Therefore the sales process for a subscription business continues long after the initial purchase.
As a person who has always had a customer centric mindset I see subscription models and the associated customer journeys as compliments to the overall strategy.
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