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Each of us has – at one point or another – fallen madly, deeply in love with an app.
Some inefficiency in your life, some void filled by an app that seems almost perfectly tailored to you.
You wonder how you survived before the app existed. You move the app to that prime real estate in your main menu bar. You consider naming your firstborn child after it.
Then, one day, at the height of your immersion in the tool, right when you’ve so integrated it into your life that you can’t imagine what you’d do without it, tragedy strikes.
You’re prompted to upgrade.
You’ve reached the freemium limit and all of a sudden, you’re at a crossroads. To upgrade or not upgrade? That is the question.
While it may sting a bit to bust out your card and sign up for a subscription, give credit where credit’s due: companies successfully adopting the freemium model nowadays know just the point of critical mass for their users.
They know just the features to withhold and just the time to prompt you.
And here’s the thing: that’s really hard to do right.
A good freemium product needs to strike a balance between offering just enough features to make you fall in love, but not so many that you’re able to operate without the upgrade.
We’ve put together upgrade prompts from top apps and sites like LinkedIn, Trello and Canva to examine what goes into creating the perfect freemium upgrade prompt.
Atlassian’s most recent acquisition, Trello, utilizes the freemium model to convert individual users of the project management platform to business class or enterprise solutions.
Like Slack, Trello leverages open source integrations to create harmony amongst the tools its users need on a daily basis. Integrations include Dropbox, Evernote, and MailChimp – three other notable freemium services.
These integrations can be the difference between using Trello as a standalone project management tool and fully integrating into the way you stay organized across all tools.
Trello wants to give you a taste of that, but not the whole cake.
Users are allowed one free integration and can scan the entire library of the 100+ offerings.
Anyone who enjoys synergy among apps will have their mind spinning as they think of the possibilities of syncing with Harvest or Google Drive, but when you go to enable that second integration, you’re prompted with the following:
Trello does a few things really intelligently here:
Switching out integrations is as simple as clicking the “Enable/Disable” button – no “one and done” policy here.
Smart move for Trello because users can test the integrations individually.
That means when they realize how great it would be to use both join.me and Salesforce, that upgrade prompt will look a lot more enticing.
The opening line of the upgrade prompt reads like they’re a close friend who doesn’t want you to have to upgrade either.
“If only there weren’t these darn paywalls that we built!”
In all seriousness, empathizing with your users about upgrades is a smart move.
It shows you’re on their side and are glad they’re finding value in the platform.
Spotify does this well also, and 25% of their active users pay for premium accounts (which is an insane number).
Sure, you could just write “You can’t do that!” and then provide a CTA, but you’d be walking a tight rope between upgrading and frustration.
Instead, a slight nudge that reminds users what they can do for free (but alludes to the benefits of upgrading) keeps users happy within the limitations of your model.
In short, a good freemium upgrade is self-aware enough to understand the biggest value add for their users, and then smart enough to give them a preview
Feedly is an RSS feed aggregator with both free and “Pro” accounts.
Users of the free platform get 100 feeds with minimal organizational tools while pro users get:
So, as you can see, pro users benefit from a mix of product and service upgrades that for heavy-duty RSS feed fans, may be worth the $5.41 per month.
The more interesting part of Feedly’s freemium model isn’t the difference in features, but rather when and how they prompt users to upgrade.
Feedly positions their upgrade as a “gift” being offered as a thank you for your patronage once you hit two months of use.
A 30 % discount is offered on a limited time basis (“today only”).
It’s a pretty crafty strategy for encouraging upgrades.
First, because the prompt reminds users that they’ve been active on the platform for some time now.
Second, because in conjunction with that reminder, users have an opportunity to now upgrade at a significant discount for the year.
Finally, because that discount is timestamped, forcing users to give a thought – then and there – on whether or not an upgrade makes sense.
Everyone knows LinkedIn as a go-to source for professional networking, job search, and industry content, but with 467 million members sharing their work experience on the platform, it’s also a go-to source for recruiters to find talent.
In fact, some numbers show as many as 94% of recruiters use LinkedIn in some form in their business.
The staffing industry alone is worth $142 billion – not to mention internal corporate recruiting – so needless to say, LinkedIn has long been positioned to profit from some members’ commercial use of the platform.
And to be clear, they have been doing just that since 2008 when LinkedIn Recruiter – a premium platform built specifically for, you guessed it, recruiters – launched.
LinkedIn has several tiers to its premium subscriptions based on how you intend to leverage their network. But, like most tools using a freemium model, users tend to max out their use of the free platform before deciding whether or not to upgrade.
LinkedIn’s strategy to capture potential upgrade-eligible users shows up right in the middle of a recruiter’s workflow in the form of a soft paywall:
The policy of how members reach this commercial use limit are detailed in LinkedIn’s help center, but in short: if you’re someone whose business runs on finding people through LinkedIn, the amount of work you’re able to do for free on the platform is fairly limited.
By stopping commercial users of the platform literally mid-search, LinkedIn quickly demonstrates the limitations of the free version while also positioning the upgrade as a recruiter’s salvation: premium solutions have unlimited searches.
LinkedIn also combines their freemium model with the more traditional “30-day free trial,” giving users the opportunity to test drive the difference in a premium account before fully committing to an annual contract.
The end result is positioning an upgraded platform for those who use LinkedIn to build their own businesses and profit.
Need a quick, professional, beautiful graphic in a pinch? Canva may be just the tool for you.
Canva positions themselves as “amazingly simple graphic design software” and in my limited use of the platform, I can confirm that’s actually true.
Users create an account and can quickly toggle to different templates based on what you’re looking to create: a social media post, blog graphic or even a poster.
For someone keeping an eye out for upgrade prompts, it doesn’t take long to recognize how Canva leverages the freemium model.
Yes, you can use templates, make simple changes and even download your work for free on Canva, but when you start to extend into features that would really allow Canva to replace Photoshop and become your go-to graphic design resource, subtle nudges toward the premium solution arise.
Canva details all the feature differences on their pricing page, but essentially the free version of Canva works great for an individual who needs a one-off design done well.
For serious graphic designers, these subtle nudges will eventually drive you and your team toward the upgrade check-out.
Adopting a freemium model for your product or service gives users an opportunity to dive into your platform headfirst, immerse themselves in what you offer and then decide whether your offering is so critical that they’re willing to transition from a free user to a paying one.
The difficulty comes in first deciding what’s offered for free and what’s protected behind the premium solution.
It’s tough striking the balance between just enough features to drive adoption, but not so many that an upgrade feels unnecessary.
The second difficulty comes in deciding the best way to prompt your users to upgrade.
Whether it’s Trello relating to customer’s desires for synergy, Feedly gifting discounts, LinkedIn limiting commercial activity or Canva subtly revealing the full capabilities of their platform, companies have implemented different methods for converting freemium users with varying degrees of success.
As more and more companies adopt freemium models, I’m sure we’ll see companies getting more creative with upgrade prompts.
*Note the below is satire
Congratulations! You’ve come up with some new, exciting SaaS idea and you’re actually taking it to market.
We already know your story:
After a few pints a few weeks back, you and a buddy got to talking about the inefficiencies of some niche problem in your lives and voila!
Like a little chick poking through its frail shell at the crest of dawn, the heavens opened up and an idea was born.
Yesterday, you were just some putz doing menial desk work but today, you’re an entrepreneur.
Today, you join the ranks of Steve Jobs, Jeff Bezos, and Larry Page as a person with an idea that changed the world.
You spoke with a friend of a friend’s co-worker whose brother-in-law does some VC work and he said (allegedly) that your idea sounds “interesting.” Can you say Mark Zucker-who?!
The stars seem to be aligning and you’re feeling unstoppable.
This is what it means to be “at the top of the world.”
But here’s the thing: statistically speaking, you’re probably going to fail.
We don’t like being the bearers of bad news, but here’s a harsh truth: 50% of businesses started this year won’t be around in 2021.
Most for pretty legitimate reasons including lack of market need, no cash flow, an inability to build a successful team and tough competition.
Some, however, fail for no other reason than their own stupidity. Much like this guy, some startups have no one to blame but themselves for their failure.
So maybe you’re reading this to learn from the mistakes of those who so foolishly failed before you.
Or, perhaps because you have a devilish taste for self-sabotage.
Either way, here are 6 tried and true steps to kill your startup.
If you want to effectively kill your startup right out the gate, it’s important you do absolutely no market research to determine if there’s even demand for your product or service.
People are sheep. They follow the herd. They don’t know what they need, it’s your job as a visionary to tell them.
Researching your target audience only to find it’s comprised of a small subset of an already niche market won’t do anything except shoot your confidence.
You don’t need that!
You’re an entrepreneur!
Don’t let them kill your vibe with their “negativity” about a small potential customer base in your target market.
Avoid research altogether and go with your gut.
Let’s say you fail to kill your startup by being too niche and your product actually has an addressable target market.
There’s still ample opportunity to ruin everything and watch your dream go up in flames.
Chances are you’re not the first to plant a flag as the go-to solution for your target market, but that’s ok!
A little competition is healthy, you know that.
However, it’s hard to even consider these other companies competition.
What you do is so game-changing that it’s offensive, frankly, to even be mentioned in the same conversation.
Other startups may have attempted to crack the code on a solution for your target market, but they’ve all failed.
You want to fail too, but in your own uniquely moronic way!
Our advice: ignore the competition.
After all, what could a company with potentially years of experience attempting to penetrate your target market have to teach you?
Just stay in your lane and do things your own way.
It’ll probably work out just fine.
A failed entrepreneur once said: To pivot, is to admit defeat.
Put those words on a Post-It note and stick it to your Macbook because that’s your new mantra.
All the greats know that pivoting when things aren’t working – whether due to addressable market, competition, or any number of other factors – is the startup equivalent of really, really wanting a good burrito but settling for Taco Bell because it’s closer.
You knew a good burrito was just the right thing to cure your insatiable appetite; why would you even consider anything else?
Some people think a startup pivoting shows bravery and adaptability.
In reality, pivoting exemplifies one characteristic only: that you’re a giant wimp.
At some point, somebody is going to try and get you to put together a marketing plan.
They’re going to say: “You need a marketing plan to get the attention of potential customers.”
Or, alternatively, they may ask: “Are you insane?! You’re going to launch with no marketing plan in place?”
Don’t let these “marketing experts” get under your skin.
You don’t need a marketing plan!
Your product is such a game-changer, you’re going to have people lined up around the block just from word-of-mouth.
You want a marketing plan?
Here’s my marketing plan: make it go viral with no budget. Boom.
Despite what anyone tells you, a childhood best friend with two semesters of community college experience and a LinkedIn profile showing they’re a lifeguard at “the Atlantic Ocean” is completely qualified to be your CFO.
After all, he did your taxes for you on TurboTax last year in less than 30 minutes and you got $200 back!
Investors aren’t interested in you building out a team capable of bringing your idea to life in an innovative, scalable way; they want to see you’re loyal to your friends and don’t forget where you came from.
Make your team look like the cast of HBO’s Entourage. After all, everyone needs a Turtle.
Sure, money is important. At the end of the day, this is a business and you recognize that generating interest from investors is a critical step in taking your idea from concept to reality.
But, a small piece of advice: don’t get wrapped up in the dog and pony show of pitch meetings.
Investors like to feel important and so they’ll often try to make a pitch meeting seem like it can make or break your startup’s chances of success. Not true.
Here’s what is true though: your concept is so innovative, so groundbreaking, so undeniably genius, that if people need an illustrious Powerpoint and business plan in order to see your vision, they clearly don’t get it. Their loss.
Don’t get me wrong, you’ll want to play the game a little bit. Certainly, dress appropriately (hoodies and flip-flops are the unofficial uniform of successful entrepreneurs – it exudes the perfect mix of childish unprofessionalism and geekish intelligence).
Terms like “disruption” and “innovation” are like catnip to investors, so be sure to include them frequently in your 90-minute long word vomit of ideas you call a “pitch.”
Speaking of your pitch: we hope it goes without saying that you should be winging it completely.
Try as much as you can to put the onus back on the investors for answers.
When they ask about your go-to-market strategy, retort with: “what do YOU think should be our go-to-market strategy?”
Because at the end of the day, yes, they are giving you money now, but what you’re providing them in the long-term is a lifetime of undeniable happiness and success.
So really, who should be pitching who here?
Woah, Woah, what?
You’ve actually made it this far and haven’t self-destructed yet?
You secured funding off that advice? What?
It’s ok. There’s still a chance for you to fail. In fact, #6 is one of the top reasons startups fail.
Because now you have some money. And money – in the hands of an idiot – is bound to be misappropriated.
Start hiring with abandon!
Yes, you do need a Chief Listening Officer, especially considering no one listens to you.
The more people you hire into ill-defined roles with no clear hierarchical structure, the more rapidly you’ll be able to grow your business.
In addition to talent, here’s what should be on your shopping list now that you have that Series A funding:
Don’t worry about clearing all that with the board. You’re the boss, remember?
The startup world reeks of failed pursuits.
Often, there’s nothing these companies could’ve done differently to change the outcome.
The good news is, entrepreneurs brave enough to give it another go with a second idea statistically have found more success.
If you’ve managed to survive these six pitfalls near-guaranteed to kill your startup, go play the lottery today.
If you’re lucky enough, perhaps you’ll succeed at that too, only to find a way to completely mess that up instead.
Anyone who’s ever been set-up on a blind date before knows the pressures of a successful user onboarding experience.
You’re sitting at a restaurant you can’t afford across from a complete stranger – could be the love of your life, could be a serial killer (that’s why they’re single!) – trying to make the best possible impression and not chew with your mouth open.
This is it. They are here; this is yours to lose. How are you going to make an immediate connection, demonstrate your value and entice them to come back again, all while getting some information about them for yourself?
This is the same question startups face every day. There are 2.2 million apps in the app store and an estimated 100 million new businesses started every year around the world.
The competition for your attention is at an all-time high and with that, there’s never been more of a need for sites to be giving thoughtful consideration to how they create stickiness with users from the get-go.
Like the dating world, everyone has their own unique approach – I once had a woman tell me she didn’t “believe in dinosaurs” – but also like dating, it often takes only one bad experience to make you acutely aware of what makes a good one (I met my wife shortly thereafter – she fully believes in dinosaurs).
Here’s everything you need to consider while building out your startup’s user onboarding experience (along with examples of sites who are already at the top of the game):
You know what it is you do and your value proposition, but as a new prospective user, what am I doing here and what problem is your platform going to solve?
Bringing your value prop to the forefront of the onboarding experience sets expectations for delivery, but also creates an opportunity for you to delight your new user by exceeding those expectations with the true depth of your platform.
Take the golden child of the SaaS start-up world, Slack, for example. Slack’s mission is to “make your working life simpler, more pleasant, and more productive.”
An ambitious, albeit slightly ambiguous aspiration. Slack is aware of that ambiguity though and for new users, simplifies it’s purpose to its core function: “Slack is a messaging app for teams.”
It’s a succinct, well-defined expectation for Slack’s most recognizable purpose: easier, streamlined chat communication amongst colleagues.
What’s behind the curtain, however, is a platform capable of much more than just replacing your email (we detailed 7 ways Slack can help optimize your startup back in December).
The lesson to be learned here is K.I.S.S.: keep it simple, startup. Shed the complexity of what you aspire for your platform to deliver (“…make your working life more pleasant…”) and focus in on what likely drove the user to you in the first place (Slack’s disruptive new approach to workplace communication).
Validate your user’s expectations immediately and then surprise them with what you’re truly capable of doing once they’ve bought into that initial value prop.
The secret to that new user buy-in lies in minimizing the time between your value prop and your new user’s first “win.”
There’s plenty of research backing the idea of quick wins as critical to the psychology of success, but the focus of user onboarding is often selfishly misaligned toward information gathering rather than making your new user feel successful.
It’s a simple role reversal: rather than forcing members to create a login or profile in order to experience the benefits of your platform, deliver small, quick wins on your platform as a way to incentivize profile creation.
Duolingo, a language-learning site that offers “everyone access to a private tutor experience through technology,” understands the importance of smalls wins.
A new user to Duolingo is visiting with the goal of acquiring a new language – obviously not something that they’ll be able to complete in one visit.
So, Duolingo sets about establishing small wins on the path toward the larger goal.
After selecting your language of choice and committing to one of four daily time commitments (a strategy which is itself pretty crafty – the highest level, which they’ve labeled “Insane” is still only a 20-minute daily time commitment so it’s not too hard to feel like an overachiever from the outset), you’re launched into a basic vocabulary lesson.
Within minutes, you’ve completed your first lesson, learned a simple phrase in your new language, gotten a feel for the way Duolingo educates, and earned your first 10 XP points – Duolingo’s measurement of language fluency – all without creating a profile (an onboarding tactic we’ll discuss in more detail below).
Headspace implements small wins and progress measurement in another field – meditation – where even those with the best of intentions won’t find success overnight.
The “Headspace Journey” as it is so aptly labeled by the company’s co-founder and lead instructor, Andy Puddicombe, launches new users into their free, introductory “Take10” course: a basic, low-commitment and consistently reassuring hand-holding through the foundations of a successful meditation practice.
Each of the 10-minute sessions ends with Puddicombe’s velvety voice signing off with: “We’ll see you back here tomorrow for Day X of Take 10,” a big checkmark overlaying the just-completed course, and the “Next Session” arrow jumping forward.
There’s psychology behind what Headspace is doing here. We mostly all know that daily meditation practice is good for the mind, but few make the time. Most would likely blame a busy schedule, but the real reason resides in a new meditator’s progression: are you making headway (no pun intended) in your pursuit for mindfulness? Headspace highlights that progress visually and celebrates it with follow-up emails like the one below.
Both Duolingo and Headspace are taking advantage of something called the goal-gradient effect: as people come closer to achieving a set goal, they work harder to make it happen.
It’s the same effect that made Seinfeld’s Elaine Benes obsessed with retrieving her Atomic Sub punch card and it’s what will help ensure your new users return to your platform again.
A good product tour doesn’t feel like a product tour. Like a pair of top-notch salsa dancers (not me), each step should feel natural, intuitive even.
Walking users through the platform feature-by-feature doesn’t stick; giving them a task, helping them achieve that small win and then introducing features in a natural flow along the way is the best way to ensure when they come back, they know exactly where to go and what to do.
Slack does this well with the introduction of Slackbot early on in the new user experience, but I’d like to highlight Evernote, the popular notebook tool/idea hive.
Evernote introduces new users to the platform through a checklist of to-do’s that guide you, step-by-step, through all of the core features.
After downloading the application and setting up your account, a checklist appears in the top left corner of the platform with a series of tasks starting with the simple “Create Notes” and ending five steps later with “Set Reminders.”
The five functions introduced build off one another, creating a workflow that’s intuitive and easy to replicate.
Notice that there’s no mention of “Work Chat” or tags or audio notes and certainly no prompt to upgrade from Evernote Basic to Premium.
The goal of the first visit is to clearly highlight the features and quickly create that first win.
The days of registration forms the length of most government background checks are behind us.
As a startup evaluating what information to require in a user’s first visit, ask yourself one simple question: what do I absolutely need this first time around?
Social logins – those nifty “Login with Facebook” or “Connect with Google” buttons that are prevalent now in most onboarding processes – have dramatically simplified the information collecting process.
Users don’t need to enter their name, email, date of birth and a flurry of other information into different fields to gain access to your site or app (a relief for mobile users in particular, for whom this was a particularly arduous process); instead, they can link directly to another site that’s already done the legwork of getting to know you.
And while the process is certainly easier and undoubtedly has a positive effect on your conversion rate of first-time visitors, it’s not foolproof.
There’s a range of permissions that social logins are able to request and while it may be tempting to request access to things like my friend list or “likes,” remember: the guiding question is “what do I absolutely need?” not “what do I want?”
Pinterest is an example of a site that likely needs most of what they request access to when you login with Facebook.
By gaining access to my Facebook likes and interests, not only am I up and running on Pinterest – a site I’ve never used before – in less time than it takes a dog to eat a hamburger, but I am coming in with an already well-curated feed of content mapped directly to me and my interests (screenshot not included because it was mostly pictures of barbeque and a checklist for building a home bar – yikes).
Recently, more and more sites are pushing the registration request to the end of the onboarding process in an attempt to minimize disruptions between the value prop and that first small win that creates user buy-in.
Our friend from earlier, Duolingo, does this by planting the opportunity to create an account and “save progress” directly following that first small win, right when that dopamine is kicking in and you’re feeling proud of yourself.
The real expert in backending the registration process, however, is Eventbrite.
Eventbrite is an “a global marketplace for live experiences;” a platform for figuring out what to do – and where your friends are going to be – on a Friday night.
There’s plenty of competition in the event space, so how does Eventbrite differentiate? By removing all barriers between you and that first small win.
As a new user, you’re greeted with a simple but exciting value proposition (“Find your next experience”) and then given direct, immediate access to Eventbrite’s entire database of upcoming events in your area – no registration required.
Once you’ve found one you’re interested in attending, your registration with Eventbrite is built directly into the ticket-buying process.
It’s so ingrained in the natural flow of using the platform that you don’t even realize it’s happening until it’s over.
All in all, your goal in registering new users should be to minimize the friction between them and finding value.
The best way to do that is to think carefully about what information you need in the first visit to create the best experience possible.
This is just the tip of the iceberg. Just as your startup is constantly evolving, so should the process with which you bring on new users.
And while there will always be new tools and methods to help you increase your conversion rate, remain true to creating the best possible experience for them.
They’ll thank you for it by coming back for more.