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Freemium Meetup November 2012 - Lincoln Murphy
1.
Lincoln Murphy presents...
The State of B2B Freemium 2013 A Reality Check
2.
B2C vs. B2B
Freemium B2C... more TIME than MONEY B2B... more MONEY than TIME The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
3.
Does Freemium Work?
• It depends... • To build revenue-generating business? Some are finding success • To build a Profitable business? Jury is still out • To build a massive user base and sell to someone else who will monetize? Some successes... like the lottery • Pick one and focus on it exclusively... The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
4.
Your Product Won’t
Sell Itself • ...unless it's designed to!!!! • Products that grow and “go viral” organically... don’t. • Behind the curtain is an army of smart people making it happen • Shouldn't seem forced; the conversion process should be natural • Spend as much time developing the Customer Acquisition, Engagement, Retention, and Viral Expansion processes as the core functionality of the product The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
5.
You need a
massive audience • Free-to-paid conversion rates are super-low even for "successful" Freemium companies • In the 3-5% range for the Classic Freemium model • What’s the quid pro quo; if no value from the free users, why have free users? The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
6.
You need a
lot of money • Freemium isn't cheap for the vendor & it’s getting more expensive • Freemium companies are raising money to steal users from other Freemium companies, not just disrupt the legacy software vendors, or premium SaaS companies • Evernote $166M funding to date • Dropbox $257M in funding to date • Box $284M in funding to date • Yammer $142M before Microsoft acquired them for $1.2B The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
7.
Free is more
accepted now • "Free" has been around a while now and isn't as off-putting; still non-starter in some markets • The "free = zero value" time has passed • Customers might not "get" the business model, but they trust them a more today • People don't want to invest their time, energy, and resources in a company that won't be there; got big funding? Flaunt it! • Generational changes are opportunities • "Let's cannibalize ourselves before others take our market share!" - Legacy Software Vendors The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
8.
But free isn’t
enough • Free isn't cool anymore; not a user magnet as before • Getting free users is becoming more difficult • Know what you're displacing with your offering • Once you get a user, get them engaged and use them to spread the word • Engagement isn't what it used to be; now it's even more important! The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
9.
Freemium can Streamline
the Complex Sale • The complex sale is where different personas within a company are involved in the buying process • For example you might have an End User, an Influencer, a Technical Buyer, and an Economic Buyer involved • Works well even where a sales person is still required - by the market - to close the deal • The Yammer model The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
10.
Should you use
Freemium? • Don’t “Go Freemium” to avoid selling • Know your audience • Free Trials can be VERY effective; should you pivot to profit? • If your product doesn’t add value why are you in business? If it does, maybe they’ll pay, right? • If your customers have more money than time... • Know what your goal as a company is, draw the line in the sand and don’t deviate from that goal... The State of B2B Freemium 2013 Copyright© 2012 Sixteen Ventures. All Rights Reserved.
11.
Contact Info
Lincoln Murphy http://sixteenventures.com lincoln@sixteenventures.com @lincolnmurphy (972) 200-9317
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