Buzzgain

Freemium

There are multiple types of Freemium models ranging from a free version of the product to a free trial period for your products. In metrics we track for Freemium products we talked about conversion ratios.

Given the recent downturn we noticed more companies abandoning their Freemium model.

1. Jott has ended its free version (officially Feb 2): “The free version of Jott is going to end on February 2, CEO John Pollard told me today. The terrible advertising market, he says, means every customer has to pay their own way from now on. Customers will need to pay $4/month to continue the service, the current price for a premium account. This includes users of the Jott iPhone application.”

2. Sprout has also given up on free version of their product. “We are focusing our product and sales on professional creative designers, agencies and publishers. Being a full software as a service model, we need to make sure we price the product at its true value.”

In a related discussion at Ycombinator there was a question if any startup is not charging users money and still making a profit? The intention was to see if you could monetize the user base in another way (which means via ads, or selling analytical data or charging some other person in the food chain.

In my opinion, the movement towards charging users versus providing free service is a good one for the startup economy. It increases barriers for the competition, requires you to have actual capabilities in the product instead of just putting 3 features together and calling them a beta version and finally makes the startup model sustainable.

We do offer a 2 week “free trial” to kick the tires of the product, but cannot sustain a free version of our product. Your thoughts?

Any other type of try before you buy model you’d suggest?

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