Don't launch a freemium app
Don't launch paid for features at the same time as the free plan.
You need to give the free plan some time to itself, here’s why …
Years ago I launched a Magento extension, basically an improvement over the stock Magento menu system. It was a free download listed on the Magento marketplace. It was very well received, got plenty of 5 stars and started to move up the rankings nicely. Success breeds success and all that.
Going premium
I then introduced a premium version, which I promoted within the admin console of the free menu, and on the Magento marketplace. I continued to support the free version, releasing bug fixes and new features.
The strategy proved effective, I was pulling in around $250 per day, not bad for a side gig but ...
Something went wrong
I started to get some 1 and 2 star reviews for the free version. Not too many, and by this point I’d already got enough 5 start reviews that they were lost amongst these.
What was going wrong? Had I somehow broken the free menu?
People felt cheated
No. People weren’t complaining about the free menu itself - it was working better than ever. The problem was the premium version - now features were dangled in front of them but they had to pay. They felt cheated. I started to get 1 star reviews with comments like “totally crippled, forced to buy the premium version”
The irony was that the early versions of the free version had very few features but got a flood of top reviews. Subsequent versions had more features and were more stable, yet the perception from some was that I was cheating them.
Lessons learned
Looking back, if I had launched the free and premium versions at the same time I would never have received the initial flood of 5 star reviews and associated rankings. So that’s my takeaway
Don’t tell the initial free users that you plan to start charging for premium features!
I think this somehow varies from product to product. We launch a free version of our Cloud IDE months before we start the premium features (as it wasn't even ready yet!). We had several limitations for the free users from the very beginning and our initial users asked us if they could get more out of us if they paid. We carefully planned out what will be the difference between free and premium and both of them worked out well. The Cloud IDE is sufficient enough for mild usage, and it is powerful enough if you paid.
That's interesting. I've also noticed that free apps get more ratings that freemium ones. Perhaps it's also because when people see a freemium app they don't even bother to try it - believing that all the "good" features will be in the premium version?
It depends upon the features we give on the free and premium plans. If we give the reasonable cost for the features in premium it won't offend the initial free users.
It sounds like your original approach was successful. Not sure if I would launch both free + paid versions at the same time.
Did the free version give you any insights/customers for your premium version?
Yes 90% of paid customers came from the free version. I didn’t spend anything on marketing.
It’s always very annoying banner that breaks markup and screams buy me. I feel creepy seeing them, I think maybe that’s feeling that push people to write 1star reviews
@VikoFounder
You have highlighted good point about the product free vs paid version!
what do you think about starting product only 1 feature at 1 time free or paid only?
I will be thankful about your precious time.
Theres a reason why some of the top companies use freemium. Because it works.
Canva
ProfitWell
Just to name a few.
My SaaS currently has a 14-day trial with credit card needed to start trial. But we are switching to the freemium model.
Some good reading on this topic that solidifies this thinking can be found here:
Thanks for sharing
Very good resource. Thanks for sharing
We at Norns AI launched with a 7-day trial + hard paywall, no freemium, but started to think about giving freemium a try.
The tool needs to retain people and let them be hooked instead of sending them away right in the beginning if they're not ready to pay.
Automated email personalization could be quite a new approach for many people out there.
So some of them were not ready to pay for it since the very beginning of use.
But sure, the set/quality of core features should be the same.
The only alternative tactic is to launch another free micro-product that could up-sell the premium one but is not the same.
I think it's more nuanced than this, but there's definitely truth in it. For Bear Blog there's no issue at all with the freemium model and I have had no complaints. This is due to the nature of the users and it not being seen as an "app" but as a webservice. On the flip side JustSketchMe regularly has users complain that the free version is crippled by the paid version, even though the free version gets regular updates (even though it's, as the name implies, free).
This is very generic advice. It depends on the feature split between freemium and the paid plans. If you give enough value in the free plan, you should be getting positive Word of Mouth and reviews to fuel top of funnel, rather than bad reviews. Take Tally for example: 99% of their features are free and users are huge advocates of Tally allowing the team to spend literally zero on paid advertising. I've learned in a case study from Marie (the co-founder), that they have a 3% conversion rate but the benefits of getting many leads top of funnel far outweigh this.
hmmmm i think its subjective and depends on the platform. What I did was provide a free app with loads of features but if they wanted to display more data then they would pay. I made a few $ without any bad reviews. could it be that you didn't provide enough features in the free mode?
Possibly, although the majority of features were actually offered in the free version and I continued to add new free features.
I think your point about the platform is significant. In this case it was self-hosted, open source Magento. Perhaps people resented being asked to pay for a plugin when the core platform itself was free.
I wonder if I would have had a different experience with something like Shopify 🤔
Thanks for sharing your story.
These days I am hesitant to trial anything free without knowing what the priced version would be. @VikoFounder
For my latest tech startup, https://skilledup.life - free talent for tech startups, I've refused to even offer a free trial. In our case, we are a Human Platform and not really a software product.
I totally agree with you most people wanted to make quick money.
Yeah, that's true.
Interesting...
I am working on a free app. Would love to learn from you. mmogull@annapurnapartners.com
Isn't making them a bit annoyed a way to get paid? 😈
Never thought about it this way... Interesting how if you only had a premium version, you would've only gotten positive reviews. Can you clarify why the freemium users were unsatisfied with their offering?
Just because the free version lacked some of the features in the paid edition. I think of it like this: the service in coach/economy isn't too bad ... until you see the flight attendants waiting on the passengers In first :D
Wow. Interesting perspective.
That's really interesting, I've certainly seen those type of comments in marketplaces that contain a lot of free tools. Like the Wordpress plugin site or Google Workspace Market.
Interesting course of action. Aside from the fact that people hate paying in general, I have seen key people on twitter mentioning that being transparent about upcoming premium features is being welcomed more easily..
Was it clear to your users (initial and later) that the premium extension would come or exists? Eg was your extension titled "Navigation Free" or simply "Navigation"? I honestly think, if people understood that the limited version is free, they wouldn't have been so upset. On the other hand .. there are always trolls who hate paying for anything :)
You could have a point. The original plugin was simply called "Supermenu" and the later version was called "Supermenu Pro". I didn't actually plan to launch a premium version when I launched the free one.
The strange thing was that I continued to add features to the free and paid version, and actually I added more features to the free edition. I think your point about trolls is right though.
I agree to the point that @luceos made. If you straight away made clear that the standard version was free then your users won't be surprised seing a premium version at one point. Freemium apps are in my opinion still a very good way to attract people. They basically use your MVP. You really have to provide value on the premium one, but still make sure that with the free version, you can still accomplish a lot.
we have just launched freemium, check please
https://www.producthunt.com/posts/pitchmonster-io
This comment was deleted 2 years ago.
Yeah it’s a fair point. It’s true that most of the hassle I received was for the free version. However it’s also true that most of my paid customers started out with the free version. I guess it’s essentially a free trial with no time limitations.