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Toni Schneider Automattic


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Toni Schneider Automattic

  1. 1. Toni Schneider, CEO Freemium Summit March 26, 2010
  2. 2. 2006
  3. 3. 5 Things We’ve Learned Building Our Freemium Business
  4. 4. YMMV
  5. 5. 1. Find the Freemium Fit
  6. 6. 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
  7. 7. 2. Charge for the Hard Stuff
  8. 8. 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
  9. 9. 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
  10. 10. 3. The Life of a Paid Feature
  11. 11. Domain Mapping •Complementary to blog hosting •Requested consistently by early 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
  12. 12. Domain Mapping Adoption Unit sales per week 3,000 2,400 1,800 1,200 600 2006 2007 2008 2009 2010
  13. 13. 4. Manage What You Measure
  14. 14. The Dashboard is Your Friend
  15. 15. 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
  16. 16. 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
  17. 17. 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
  18. 18. 5. You Can Always Make it Better
  19. 19. Best Practices •24/7 customer support from the beginning •Listen to user feedback: Sad Xmas, blog comments, Net Promoter Surveys,, WordCamps •Continuous deployment model for development •No user lock-in •20% contributions to open source projects •Multi-language from day one
  20. 20. Things We’re Working On •Pricing and segmentation analysis •Payments/subscriptions •AB and multivariate testing •Premium feature discovery •A la carte vs. tiered features
  21. 21. 2010
  22. 22. Thanks