Freemium San Francisco Bay Area Message Board › WSJ article: "When Freemium Fails" (Aug 22, 2012)

WSJ article: "When Freemium Fails" (Aug 22, 2012)

A former member
For the first time the WSJ has written an article specifically about Freemium.

When Freemium Fails - by Sarah E. Needleman and Angus Loten, Aug 22, 2012.z
(those of you without a subscription may need to access via Sarah's tweet rather than the direct link)

The article is worth reading - here's just a few quotes:


  • for some (new businesses), the "freemium" strategy is turning out to be a costly trap, leaving them with higher operating costs and thousands of freeloaders
  • "The decision to move away from freemium was the best business decision we ever made," said Lance Walley, co-founder and chief executive officer (of Chargify)
  • "Freemium is really a construct of the digital age because there's almost no marginal cost to digital goods," said Chris Anderson, author of "Free: The Future of a Radical Price," and editor in chief of Wired magazine
  • "The problem is, it's not always obvious what features should be free and which should be paid," he (Vineet Kumar, Harvard professor) said. What's more, he added, offering too many features in the free version risks "cannibalizing your paid customers," while not offering enough might generate little interest all around.

Those of you with a WSJ subscription may want to comment on the article - many of you have your own experience and expertise and opinion to share.

If you do comment, feel free to include a link to our Freemium Meetup (www.meetup.com/freemium­) or Freemium Blog (www.freemiumsfbay.com­).  Both the meetup and the blog have all of the speaker presentations and videos.  It would be great to attract some new speakers, members, and visitors to our group.

Cynthia
Lead Organizer
Freemium Meetup SF Bay
cynthia@kachingle.com
408 867-8875




 
A former member
Post #: 15
Related, but much older, is the article in the New York Times "Using ‘Free’ to Turn a Profit"

http://www.nytimes.co...­

to which Jason Fried had a somewhat hyperbolic response:

http://37signals.com/...­

"This weekend the New York Times published a piece called Using ‘Free’ to Turn a Profit. The piece focused on Evernote, a web-based and smart-phone based application for taking notes, snapping pictures, and storing stuff you want to remember later. The following critique isn’t about Evernote (it’s an impressive product which a lot of people love). It’s about the incredibly low bar for “success” in our industry and how the tech-business press perpetuates the perception... Let’s erase one claim right off the bat. The headline, “Using ‘Free’ to Turn a Profit”, is misleading and downright false as it relates to the subject of the story. Near the end of the piece Phil Libin, the chief executive of Evernote, says they are generating about $79,000/month in revenue. Then the article goes on to say “By January 2011, Mr. Libin projects, the company will break even.”"
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