This is a slide deck I presented at Freemium Summit on March 26, 2010. An exploration of existing freemium businesses, business/market conditions where freemium can make sense, and finally some lessons learned from xobni
16. 1. Is freemium right for my business?
2. If it is, how do I make it successful
(lessons learned from Xobni)
17. If you make software, you can make
money in four ways
If you sell software to a business,
they don’t want you to make
money the last two ways
18. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
If you sell software to a business,
they don’t want you to make
money the last two ways
19. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
• Sell your stuff to some of your users (Freemium)
If you sell software to a business,
they don’t want you to make
money the last two ways
20. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
• Sell your stuff to some of your users (Freemium)
• Sell other companies’ stuff (Advertising)
If you sell software to a business,
they don’t want you to make
money the last two ways
21. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
• Sell your stuff to some of your users (Freemium)
• Sell other companies’ stuff (Advertising)
• Sell users’ stuff (Data marketplace)
If you sell software to a business,
they don’t want you to make
money the last two ways
22. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
• Sell your stuff to some of your users (Freemium)
• Sell other companies’ stuff (Advertising)
• Sell users’ stuff (Data marketplace)
If you sell software to a business,
they don’t want you to make
money the last two ways
23. If you make software, you can make
money in four ways
• Sell your stuff (Premium only)
• Sell your stuff to some of your users (Freemium)
• Sell other companies’ stuff (Advertising)
• Sell users’ stuff (Data marketplace)
If you sell software to a business,
they don’t want you to make
money the last two ways
24. Is freemium right for my business?
(let’s narrow discussion to freemium vs. premium only)
26. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
27. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
✓ Corollary: channels for buying users are too
expensive
28. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
✓ Corollary: channels for buying users are too
expensive
✓ Premium-only competitor is creating demand
29. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
✓ Corollary: channels for buying users are too
expensive
✓ Premium-only competitor is creating demand
✓ Your product has (or needs) network effects
30. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
✓ Corollary: channels for buying users are too
expensive
✓ Premium-only competitor is creating demand
✓ Your product has (or needs) network effects
✓ Cost to offer free service isn’t too high
31. When freemium makes more sense
than premium-only
✓ A channel for buying users doesn’t exist
✓ Corollary: channels for buying users are too
expensive
✓ Premium-only competitor is creating demand
✓ Your product has (or needs) network effects
✓ Cost to offer free service isn’t too high
✓ You can get $ to build free product
32. How to make freemium a success
(lessons learned from Xobni)
33. How to make freemium a success
(lessons learned from Xobni)
Paul Buchheit:
advice = limited life experience + overgeneralization
35. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
36. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
✓ Good virality on communication
platform
37. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
✓ Good virality on communication
platform
✓ No existing cheap paths to buy
Outlook users
38. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
✓ Good virality on communication
platform
✓ No existing cheap paths to buy
Outlook users
✓ Low marginal cost per user
39. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
✓ Good virality on communication
platform
✓ No existing cheap paths to buy
Outlook users
✓ Low marginal cost per user
✓ Access to VC funds
40. Why did we go freemium withwith Xobni?
Why did we go freemium Xobni?
✓ Good virality on communication
platform
✓ No existing cheap paths to buy
Outlook users
✓ Low marginal cost per user
✓ Access to VC funds
✓ We didn’t want to sell enterprise
software
50. Free Premium
Xobni
Plus
Xobni Free $29.95
for Outlook
51. Free Premium
Xobni
Plus
Xobni Free $29.95
for Outlook Xobni
Enterprise
$36/user/yr
52. Free Premium
Xobni
Blackberry
$9.99
Xobni
Plus
Xobni Free $29.95
for Outlook Xobni
Enterprise
$36/user/yr
53. Free Premium
Xobni
Blackberry
$9.99
Xobni One
$3.99/mo
Xobni
Plus
Xobni Free $29.95
for Outlook Xobni
Enterprise
$36/user/yr
54. Free Premium
Xobni
Blackberry
$9.99
Xobni One
$3.99/mo
New
mobile &
email
Xobni
platforms
Plus
Xobni Free $29.95
for Outlook Xobni
Enterprise
$36/user/yr
56. 1. Survey!
One huge advantage of free - you’ve got a lot of users
to talk to
Decisions we made because we understood our users:
• Deployed by IT? Our policy doesn’t allow
deployment without Xobni Enterprise
• One or multiple computers? Extra Xobni plus
licenses are $9.95
57. 2. Start with more in-product upsells
than you are comfortable with
• See what users are clicking on
• Determine which upsells convert to sales
• Improve or remove
65. 5. Obviously, A/B test
• High volume in freemium businesses makes
a/b testing more important than ever
• We got 50% improvement in premium
conversion by a/b testing our in-product
upsells and messages
67. 6. Not all channels are created equal
(and that can be okay)
68. 7. Users conditioned to free product
convert poorly to premium
• Existing free users converted poorly when
we launched premium
• New users that only see Xobni Free when
installing convert poorly
74. 1B market cap 1.9B market cap
450M market cap
Time will tell...
75. Freemium ain’t new
It’s just a new word
Matt Brezina
Co-founder, Xobni
Twitter: @brezina
http://www.mattbrezina.com/blog
Editor's Notes
$9M operating budget
1.3 from tea gardens
400k from gold course
$9M operating budget
1.3 from tea gardens
400k from gold course
$9M operating budget
1.3 from tea gardens
400k from gold course
we planned freemium from day 1. We said, let’s us go out and solve a problem for all of these really really valuable business users. And we’ll sell them a lot of stuff in the future
we planned freemium from day 1. We said, let’s us go out and solve a problem for all of these really really valuable business users. And we’ll sell them a lot of stuff in the future
we planned freemium from day 1. We said, let’s us go out and solve a problem for all of these really really valuable business users. And we’ll sell them a lot of stuff in the future
we planned freemium from day 1. We said, let’s us go out and solve a problem for all of these really really valuable business users. And we’ll sell them a lot of stuff in the future
we planned freemium from day 1. We said, let’s us go out and solve a problem for all of these really really valuable business users. And we’ll sell them a lot of stuff in the future
tod sacerdoti
made a competition in the company to guess the order of top upsells
andrew chen’s blog list of things to a/b test. I”ll be adding to his list on my own blog shortly.
YOu are doing such high volumes of impressions, it is probably more important in freemium than anywhere else
dan airely example of duke basketball tickets. 15x difference in value.