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Succeeding with Freemium<br />Sean Ellis<br />July 14th, 2011<br />Founder & CEO of CatchFree<br />Blog: Startup-Marketing...
Competing Against Free…<br />Hope nobody discovers free guy? <br />Spend heavily on marketing?<br />HBR “counter with free...
Agenda<br />Path to Freemium<br />The Freemium Loop<br />Freemium culture is critical<br />Free/paid breakdown<br />Market...
2003 - 2007<br />4<br />Entrenched 800 lbs guerilla<br />Great product/marketing<br />Disrupt/diff with freemium<br />Cash...
Google Search Volume 5 Years<br />
6<br />Xobni<br />Dropbox<br />Eventbrite<br />Lookout<br />Socialcast<br />2008 - 2009<br />
The Freemium Growth Loop<br />7<br />Reinvest<br />Premium Upgrade<br />Seed a<br />Free User<br />Get word-of-mouth free ...
Freemium Culture<br />Least recognized necessity<br />Passion to spread “experience”<br />Patience to seed<br />Freeloader...
Free/Paid Breakdown<br />Free Version<br />Premium Version<br />Experience creates evangelist<br />Evangelists drive growt...
Free is the MVP<br />Lowers complexity barrier<br />Lowers support cost<br />More version differentiation<br />10<br />
Marketing Freemium<br />Promote free version<br />Evangelists for free version<br />Revenue per 100 users<br />Allowable a...
The Freemium Growth Loop<br />12<br />Reinvest<br />Premium Upgrade<br />Seed a<br />Free User<br />Get word-of-mouth free...
Channel Discovery<br />Works with freemium economics<br />Addresses skepticism<br />Leverage good-will asset<br />Seeds fr...
14<br />
Sean Ellis, Founder & CEO<br />CatchFree.com<br />Blog: Startup-Marketing.com<br />Twitter: @SeanEllis<br />
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Succeeding with Freemium - Sean Ellis

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In recent years freemium has become a leading startup business model. Startups use the pricing model to disrupt existing categories or to prevent a future competitor from disrupting them. But freemium is a difficult model to execute and requires a unique growth strategy. In this session, Sean will share lessons learned from helping to launch and/or grow 15 freemium businesses that are now collectively worth billions of dollars.

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  • Highly defensible growth engine Requires unique culture (not common in established companies – startups malleable)Not easy to execute – today we’ll talk about best practices.
  • Product driven – free has to be good enough to create evangelists; paid needs to be noticeably better…
  • LogMeIn examples…Intended use case – free remote access creates need for paid version to print remote doc (especially if app doesn’t exist locally)Unintended use case – 2 problems… 1) setup time consuming 2) fear of re-accessSkype example – free conf – join via phone…
  • Minimum feature set to solve key problem
  • Transcript of "Succeeding with Freemium - Sean Ellis"

    1. 1. Succeeding with Freemium<br />Sean Ellis<br />July 14th, 2011<br />Founder & CEO of CatchFree<br />Blog: Startup-Marketing.com<br />Twitter: @SeanEllis<br />
    2. 2. Competing Against Free…<br />Hope nobody discovers free guy? <br />Spend heavily on marketing?<br />HBR “counter with free version”<br />2<br />
    3. 3. Agenda<br />Path to Freemium<br />The Freemium Loop<br />Freemium culture is critical<br />Free/paid breakdown<br />Marketing a freemium service<br />3<br />
    4. 4. 2003 - 2007<br />4<br />Entrenched 800 lbs guerilla<br />Great product/marketing<br />Disrupt/diff with freemium<br />Cashflow positive growth<br />$1B-ish on NASDAQ<br />
    5. 5. Google Search Volume 5 Years<br />
    6. 6. 6<br />Xobni<br />Dropbox<br />Eventbrite<br />Lookout<br />Socialcast<br />2008 - 2009<br />
    7. 7. The Freemium Growth Loop<br />7<br />Reinvest<br />Premium Upgrade<br />Seed a<br />Free User<br />Get word-of-mouth free users<br />
    8. 8. Freemium Culture<br />Least recognized necessity<br />Passion to spread “experience”<br />Patience to seed<br />Freeloaders are good<br />Protect culture – greed kills growth<br />8<br />
    9. 9. Free/Paid Breakdown<br />Free Version<br />Premium Version<br />Experience creates evangelist<br />Evangelists drive growth<br />Build relationship<br />Free creates need for premium<br />Understand needs<br />Solve problems with premium<br />9<br />Experience<br />Relationship<br />Understand<br />Solve<br />
    10. 10. Free is the MVP<br />Lowers complexity barrier<br />Lowers support cost<br />More version differentiation<br />10<br />
    11. 11. Marketing Freemium<br />Promote free version<br />Evangelists for free version<br />Revenue per 100 users<br />Allowable acquisition cost (less marginal cost)<br />11<br />
    12. 12. The Freemium Growth Loop<br />12<br />Reinvest<br />Premium Upgrade<br />Seed a<br />Free User<br />Get word-of-mouth free users<br />
    13. 13. Channel Discovery<br />Works with freemium economics<br />Addresses skepticism<br />Leverage good-will asset<br />Seeds freemium growth loop<br />13<br />
    14. 14. 14<br />
    15. 15. Sean Ellis, Founder & CEO<br />CatchFree.com<br />Blog: Startup-Marketing.com<br />Twitter: @SeanEllis<br />

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