Talk about a conundrum for any tech entrepreneur: offer a limited-time free trial (typically 14-30 days) or roll the dice on business freemium? It’s one of the biggest decisions you can make. There’s lots of examples of successful business freemium companies out there – Evernote, Box, LinkedIn, SurveyMonkey, Hootsuite, Zendesk, Xero, VerticalResponse, & Mailchimp to name a few. Hopefully Dasheroo will make that list, too! So how did we arrive at the decision to go business freemium? Here’s some of the considerations we discussed:

• Market size: Is it big and global? Ours is. In fact, we probably say “every business in the world needs a Dasheroo business dashboard” to someone at least once a day! And yes, it’s global. We already have users in 60 countries.You need a large market size since only 1-10% of your users will convert to a paid plan. Most freemium businesses convert 3-5% to paid.
• User acquisition: Great, it’s free but will it help capture the market more quickly and efficiently? Viral growth and word of mouth is key here, as freemium basically takes the place of a big marketing budget or sales force. In our case, we believe that establishing a robust free plan gets the word out, and our users are currently our highest driver of new users via word of mouth. We still have a long way to go on adding viral hooks within out product, but we’ll get there too.
• Support costs: Sounds obvious, but customer support and back-end (AWS, hosting & database scaling) costs must be modeled and minimized. We’ve talked to many folks out there, and this seems to be a ‘gotcha’ that just isn’t nailed down well enough at the get-go. We put the time into making sure our product is as intuitive as possible (reducing customer support costs) and instrumenting use case examples on the back end to make sure it is a sustainable model.
• Competition: We took a very close look at our competition and virtually all went with a 14-30 day free trial. There’s one other player that offers a freemium plan, but we felt we could offer a more compelling, robust free offering. We also feel that as busy as people get, it might take more than a few weeks for them to set up their Dashboards and feel positive about the value; there’s nothing worse than getting forced into paying before you have derived value.
• Can we make auto-convert work: Well, we better! We have freemium experience in our pasts and have learned a lot about what to do, and more importantly what not to do to right-size the features and functionality to the pricing tiers so it’s very clear to users the value they will get by paying for our service. Most of this is under wraps for now, as we’re monitoring how our users interact with Dasheroo, but when we do announce our pricing we’re confident it’ll be very fair and clear on what additional value users will get over the free version.

So that’s our story and we’re sticking to it! we’re still early on, so as we learn both the good and the bad, we’ll share them with you in future posts.

What’s your experience with business freemium or free trials? Share with us.