Should we even offer a freemium product?

http://blog.polleverywhere.com/should-we-even-offer-a-free-product-for-educa

by speby • 16 years ago

42 12 16 years ago

blog.polleverywhere.com

sachinag• 16 years ago

This is an exceptionally honest and forthright look at the pros/cons of a freemium model versus a simple free trial. I tip my hat to the Pollers for being willing to express their conundrum in such clear language in a public forum. Kudos.

swombat• 16 years ago

While I have nothing against the sentiment/content in this post, I think the structure leaves a lot to be desired. Why anger your readers if you're going to give in anyway?

Far too confrontational, imho...

bradgessler• 16 years ago

Actually this didn't anger our readers at all, the opposite in fact. Its very easy for people to forget that there are people behind web companies that have to eat, sleep under a roof, and occasionally blow some money on something fun every once in a while like Skiing.

Teachers are very reasonable people, so we're being straight forward about the situation and reminding them that we're not Google; we don't make money from ads, we make money from building software applications.

It amazes me how people assume free products "monetized" by ads are the norm when in fact it is a freakish anomaly for any business. Most companies run like lemonade stands; you pay for water, lemons and sugar, mix it all up, setup a stand, and sell it to a customer for an amount that covers your costs and gives you reasonable profits to cover your risk.

speby2• 16 years ago

Agree. Based on some of the comments and re-tweets from educators themselves, it is clear that they are reasonable. They just want to pinch pennies (And who doesn't?). Unfortunately, there is a minimum level for us to charge that still makes sense to even sell to them in the first place.

As a poster above mentioned earlier, just having to deal with a PO process almost automatically means you have to charge more just on that basis, as dealing with the paper back and forth process, collecting on invoices, etc., adds up to a significant portion of the acquisition costs. Unfortunately, it schools continue to insist on a purchase ordering model, they'll have to also keep paying for it in all the services/products they consume.

In fact, if you want an interesting business opportunity, it could be to build a product that helps schools/educational institutions buy shit more smartly!!! Using credit cards and expense reimbursements from staff members rather than a centralized purchase order/paper check system. Blech!

jasonkester• 16 years ago

I'd make .edu a special case and give away a free subscription to any teacher who asks for one.

In fact, that's exactly what I did with Twiddla, and it has paid off amazingly well in the form of ridiculously loyal, eternally grateful users and tons of free press. Better still, every student in every classroom that uses Twiddla today will eventually be wearing a suit and sitting in a conference room while a bunch of other guy in suits struggle to make WebEx work at all, and chances are he'll suggest this cool web meeting tool he used back in school.

So if I were you guys, I'd re-do the math to see what it will cost to offer free accounts, but only to educational users. It was more than worth it for us.

dpatru• 16 years ago

$129/year < $3/week = Not expensive for something that gets used.

patio11• 16 years ago

My two cents:

1) Never, ever describe customer feedback as whining dramatics, especially when it is whining dramatics. It is very easy to get teachers to see things as Us vs. Them and you are -- make no mistake about this -- Them.

2) When reading comments from teachers about your pricing strategy I find it is salutary to remind oneself that they don't teach for free, either. Again, you don't have to say that out loud.

3) There are price-sensitive customers in every market. You don't have to sell to them.

4) Teachers report spending $250 to $400 a year on educational supplies from their own pockets. I would keep that in mind when contemplating pricing of software/services aimed at them.

5) If you want to sell to school districts, you are going to have to learn how to do Enterprise Sales. Trust me on this: $150 a year is not nearly enough to recoup the costs you'll incur doing this. (Just chasing POs through the 7+ step process to get them approved will cost you more than that in staff time. When customers approach me about paying with a PO I give them a copy for free -- it saves me money. Not even joking!)

pvg• 16 years ago

And a small addition to point 1 - don't post your customers' emails in public. Especially if you're going to describe them as whining dramatics. It's the equivalent of announcing 'if you send me any feedback I dislike, I'll post it on the net and make fun of you'.

vishaldpatel• 16 years ago

Suggestion for the archive feature: -> Archive results for all. -> Only make the latest results available for the free customers. When they pay for a year's subscription, make the rest of the archive available.

I think flickr does this.

speby2• 16 years ago

This is actually the direction we're heading with PE. Thanks for the independent validation on this strategy.

ryanhuff• 16 years ago

You might consider allowing teachers at the same school to pool an account so they can split the costs across multiple teachers. Teachers in the same grade or subject often collaborate, and this might be a good way to incentivize teachers to sell the product in their schools for you.

axiom• 16 years ago

I think the real lesson to take away from this is "stay the hell away from the education market, especially primary/secondary schools." Seriously, it's a god damn nightmare, and the fact that $50 plastic remote controls are the state of the art in that market is just an indication of that.

Should we even offer a freemium product?

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