• The Hack

    Get Rid of Your Free Subscription Option

  • AARRR stage

    Activation

  • Growth Problem

    How to Activate Paying Customers Faster

Haxplanation:

Free plans are a pricing option that most SaaS founders don’t even debate when launching their app. “Sure, we’ll have a bare-bones introductory plan that allows users to try our app at no cost” you say. Not so fast.

While an ever-increasing number of user sign-ups is a great vanity metric to see in your analytics dashboard, it’s not what your investors want to see. That’s right, they want to see activations. Followed very, very closely by cold, hard dollars. And a free plan does not a dollar make. Kapish?

Your counter-argument may be that you’ll eventually convert your freeloafers into honest, paying user-folk. The reality is not so straightforward. The likes of Pandora, Dropbox, Evernote, Automattic and MailChimp have all faced challenges with converting their free users and many other startups have scrapped their free plans. Keep in mind that a large number of non-paying users is a significant drag on your limited startup resources!

 

Just Hack It:

  • Charge for your product from the get-go!
  • Ask for money up-front!
  • Get credit card details before signing on a user!
  • Do you get the picture yet?
  • If you want to explore the business models that can help you to hack revenue faster (and have profitable activations) then read ‘The Customer Funded Business
  • Repeat after me: “There’s no money like ca$hmoney”. Now, go hustle for that startup dolla’!

 

Source or Inspiration:

http://www.softwarebyrob.com/2010/08/18/why-free-plans-dont-work/

 

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