Finally had a chance to really read through this article and the attached MIT document…

Finally had a chance to really read through this article and the attached MIT document and thought I'd share.

Getting 90% of the market share but not making any money is not a win.

"Free brought us recreational users who tried us for superficial reasons, while those who found real value were the enterprise customers.”

If you've already developed a large 'customer' base from a Freemium model – answer to the enterprise customers needs to really grow your product(s) in the right direction – and your business. If people are willing to pay, chances are you're filling a need & you will attract more paying customers.

Thanks for sharing +Panah Rad!

Reshared post from +Panah Rad

Has the Freemium business model run its course?

"Product innovation does not mean business model innovation. If your product adds compelling value to customers, charging for it is simply getting your fair share of the value created. You do not have to be ashamed of making a profit."

Very interesting thoughts.

Source: Gigaom.com

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Freemium has run its course
Freemium can only offer the hope that customers will fall in love with your product and be willing to pay for it later. This is a scattershot approach to monetization. Rags Srinivasan argues that it’s…

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2 thoughts on “Finally had a chance to really read through this article and the attached MIT document…

  1. I always see the free accounts primarily as an indefinite try before you buy sort of thing.  Trouble is that quite often, what a company is offering for more money is not worth the price they are trying to charge.  This can be caused either by too much being offered to the free account and thus satisfying most users, or by setting the price tag too high (either too high for your demographic or too high for the additional perks of a paid account).

    Take WordPress.com for example (in my view/opinion) – I am sure tons of people pay for hosting there to get additional features like premium domain and ad-free and so on…  But you can get a much more full experience without as much cost if you know some basics about installing WordPress on another host (it's even automatic in most cases!).  The difference in a HostGator WordPress install and a comparably unlocked WordPress.com account is pretty significant, and so for me (just me, not everyone!), WordPress.com's freemium plan makes zero sense.

    I'm probably off topic by now, hah. "Has the Freemium business model run its course?"  I don't think so.  As long as they are sensible feature vs. price, I think freemium is a great business model.

  2. I've often thought of the WordPress idea of freemium & realize they're making enough money from people who do not want to get technically involved. (I would hope!) If not – then yes, they should rethink their strategies.

    I totally agree with the "it's not worth paying X amount" to get the non-free version because the benefits aren't that great.

    There are some plugins that I've made the exception with: "WP eCommerce" and "WPtouch Pro". They offer so much in their plugins – and at developer level, it's just made of win.

    My colleague +Kristen Havens needs to see this linked article. I almost tagged her when I posted it but didn't want to annoy her. Now I feel like annoying her 🙂 Hehe!

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