Toni Schneider Automattic

Toni Schneider, CEO Freemium Summit March 26, 2010

5 Things We’ve Learned Building Our Freemium Business

1. Find the Freemium Fit

Go Into Freemium with Your Eyes Open •Freemium is *not* for everyone •Can be great (Zynga) or not so great (Yahoo! Mail) •Marginal beneﬁt has to be high and defensible •Free tier must be self-sustaining •Paid tier has to be focus, not afterthought

2. Charge for the Hard Stuff

Who is Your Ideal Customer? •Many options for running WordPress • Standalone software is free to everyone • Free hosted tier • Paid hosted tier •Focus revenue model on customers who have budgets to run their sites but not the IT staff

Deciding What to Charge For •We charge for things that have a well understood cost and are hard to do •What do you do when your main competitor gives everything away for free? •Compete by delivering unique features, constant upgrades and superior user experience

3. The Life of a Paid Feature

Domain Mapping •Complementary to blog hosting •Requested consistently by early WordPress.com users •Priced above upstream provider’s charge to us •Initial rollout: payments through PayPal only, limited promotion •Improvements over time: Dashboard alerts, support docs, store payment options, more to come

Domain Mapping Adoption Unit sales per week 3,000 2,400 1,800 1,200 600 2006 2007 2008 2009 2010

4. Manage What You Measure

The Dashboard is Your Friend

WordPress.com Blogs 11,000,000 8,250,000 5,500,000 2,750,000 0 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 Source: Internal Logs

WordPress.com Monthly Uniques 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 1-Apr-07 17-Jul-07 1-Nov-07 16-Feb-08 2-Jun-08 17-Sep-08 2-Jan-09 19-Apr-09 4-Aug-09 19-Nov-09 6-Mar-10 Source: Quantcast

Which Metrics Actually Matter? •Find your core metric • 10M blogs sounds great, but it’s the 400k unique new posts a day that matter • Optimize for the revenue related metrics • 250M unique visitors sounds great, but (for our Freemium business) it’s the 200k paying customers that matter

5. You Can Always Make it Better

Best Practices •24/7 customer support from the beginning •Listen to user feedback: Sad Xmas, blog comments, Net Promoter Surveys, survey.io, WordCamps •Continuous deployment model for development •No user lock-in •20% contributions to open source projects •Multi-language from day one

Things We’re Working On •Pricing and segmentation analysis •Payments/subscriptions •AB and multivariate testing •Premium feature discovery •A la carte vs. tiered features

Thanks toni@automattic.com toni.org

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Toni Schneider Automattic

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Toni Schneider Automattic — Presentation Transcript