Don’t look for evangelists among people who think your product isn’t worth $19
We used to offer a free plan for light use of Workable. A few weeks ago we eliminated it. In its place we created a very affordable plan at $19/month.
There has been plenty of interesting debate on the merits of freemium for consumer products. I think our experience offers an additional perspective, from the standpoint of a b2b SaaS company.
So I’m sharing our reasoning here, for what it’s worth.
Limiting design choices to things that can scale infinitely at near-zero cost is a recipe for making mediocre products.
Free users are not really free, even for a digitally distributed product like Workable. They typically outnumber paying customers by a factor of 10 or more. As Workable started becoming more and more popular, we realized that this isn’t going to scale. We know that a few months from now we would start getting crushed under the weight of our own success.
The best features become impossible to incorporate in the product. You can’t add any high cost-per-use features that require third-party technology or heavier operations. For example, we wanted to offer our users a better viewer for resumes, advanced parsing capabilities, better search algorithms, and so on. The cost to offer it to thousands of users for free became prohibitive.
We are simply not willing to limit ourselves, our product and our customers to mediocrity, so we found a low-end pricing that’s affordable for light users but permits us to build the product they deserve.
Some would say why don’t you offer the better features only to paying customers? But this is not as simple as it sounds. Do you create a gimped product that’s lacking half the functionality? Do you maintain a good version of a feature and a poor one at the same time, with all the complexity this adds to the product?
What about support? Do you ignore non-paying users, offer them no support or bad support? This will only lead to frustration and bad customer experience for a huge volume of people, eventually destroying the product’s reputation.
The idea that free users generate free marketing is self-defeating.
It’s easy to think that the more users you have, the more free marketing you get.
More accurately, it’s happy users that create free marketing for a product, and we haven’t found a magic way to make free users happy at zero cost.
Don’t look for evangelists among the people who think your product isn’t worth $19.
Users who can be made happy enough to create good word of mouth about your product, are probably the same people who would pay for it already.
Free users are notoriously hard to please. They want something for nothing. They probably don’t like your product too much and they’re not getting a lot of value from it. (if they did, they wouldn’t mind paying $19 or $49 for one of your inexpensive plans)
Free users will get the worst possible experience. They see the most minimal version of your software, you have put limits on their use of good features that cost you money, and they’re last in priority for customer support.
Maintaining a second-class version of our product, just for the sake of having a free plan, would only create a mass of under-served customers, ultimately hurting our brand.
On the internet, your $1,000/month user doesn’t have a stronger voice than the guy who never paid for software in his life.
When someone tweets “this product sucks” readers can’t tell if this is coming from someone who got the good version of the product or the bad, unsupported one. Oh, and for every paid user you probably have 10 or 100 free ones. They will be louder, by sheer numbers alone.
Is it really good marketing to make a mediocre impression to a lot of people? We decided we would rather have fewer people experience our product so that we can give them a product worth experiencing with the quality, features and support that we want to define our brand.
Customers who expect to get real value out of your product are the only customers you have a chance of making happy.
There’s a world of difference between “free” and “very affordable”. It forces an honest decision. Will I really get value out of this product, enough to justify paying for it? If someone is not getting $19 worth of value out of Workable, then we’re not solving a real problem they have.
We only want customers that we can hope to make happy and we don’t see a sustainable way to do this for non-paying customers.
Let’s be honest. Whatever you do, supporting an overwhelming host of free users does have some cost, even if you manage to keep it low. Guess who will pay this cost? The paying customers, of course. We don’t think that’s fair.
We know that not everyone will like and need our product enough to justify paying for it, and that’s ok. We just want to spend all of our effort and resources serving those who do.