Succeeding with Freemium - Sean Ellis
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The document discusses the concept of freemium business models, highlighting the importance of creating a compelling free version to attract users and facilitate growth. It emphasizes building a freemium culture, the necessity of understanding user needs, and the relationship between free and paid versions to drive revenue and evangelism. Insights include marketing strategies and the significance of maintaining a quality user experience to sustain growth.
Succeeding with Freemium - Sean Ellis
- 1. Succeeding with FreemiumSean EllisJuly 14th, 2011Founder & CEO of CatchFreeBlog: Startup-Marketing.comTwitter: @SeanEllis
- 2. Competing Against FreeâŠHope nobody discovers free guy? Spend heavily on marketing?HBR âcounter with free versionâ2
- 3. AgendaPath to FreemiumThe Freemium LoopFreemium culture is criticalFree/paid breakdownMarketing a freemium service3
- 4. 2003 - 20074Entrenched 800 lbs guerillaGreat product/marketingDisrupt/diff with freemiumCashflow positive growth$1B-ish on NASDAQ
- 5. Google Search Volume 5 Years
- 7. The Freemium Growth Loop7ReinvestPremium UpgradeSeed aFree UserGet word-of-mouth free users
- 8. Freemium CultureLeast recognized necessityPassion to spread âexperienceâPatience to seedFreeloaders are goodProtect culture â greed kills growth8
- 9. Free/Paid BreakdownFree VersionPremium VersionExperience creates evangelistEvangelists drive growthBuild relationshipFree creates need for premiumUnderstand needsSolve problems with premium9ExperienceRelationshipUnderstandSolve
- 10. Free is the MVPLowers complexity barrierLowers support costMore version differentiation10
- 11. Marketing FreemiumPromote free versionEvangelists for free versionRevenue per 100 usersAllowable acquisition cost (less marginal cost)11
- 12. The Freemium Growth Loop12ReinvestPremium UpgradeSeed aFree UserGet word-of-mouth free users
- 13. Channel DiscoveryWorks with freemium economicsAddresses skepticismLeverage good-will assetSeeds freemium growth loop13
- 14. 14
- 15. Sean Ellis, Founder & CEOCatchFree.comBlog: Startup-Marketing.comTwitter: @SeanEllis
Editor's Notes
- #3: Highly defensible growth engine Requires unique culture (not common in established companies â startups malleable)Not easy to execute â today weâll talk about best practices.
- #8: Product driven â free has to be good enough to create evangelists; paid needs to be noticeably betterâŠ
- #10: LogMeIn examplesâŠIntended use case â free remote access creates need for paid version to print remote doc (especially if app doesnât exist locally)Unintended use case â 2 problems⊠1) setup time consuming 2) fear of re-accessSkype example â free conf â join via phoneâŠ
- #11: Minimum feature set to solve key problem