When should you start charging? šŸ’°

Jim Morrison
13 replies
Which is more important? āžœ build traction with engaged users on a free platform.. āžœ prove, early, that a small % of your users will pay.. TL;DR ā˜ļø... but I'll add some background in a comment if you're curious.

Replies

Jim Morrison
Background: we're launching Charlie (https://www.producthunt.com/upco...) - our news assistant in two weeks and we've taken a ~novel approach... āžœ accounts are "burner" first - you don't even need an email.. āžœ registration is free, in any case... āžœ we haven't built the payments in yet... āžœ user data is expunged after 14 days... āžœ dormant "burner" accounts are deleted after 28 days... The idea is; it makes it super quick & easy to get engaged in the product. The massive risk to us is that people come, look and leave... but I believe that unless people are really engaging of their own volition - without hooks & tricks - we're just kidding ourselves about our product's efficacy. Is that silly? @elizabeth_yin1 - I would love to know your thoughts on this - given your experience of nurturing seedling start-ups and having to asses whether to run follow-on funding... šŸ™
Laura Linham
Disclaimer: No head for business. I think traction and engaged users is more useful to get going. Something that shows people coming back, enjoying your platform, finding it indispensable... Of course, people also have to eat and...keep a roof over their heads so...
Jim Morrison
@laural this is kinda what I'm thinking... better to charge a small % of a big audience a small amount... than try and charge a big % of a small audience a lot... So audience is key.
Jason Scott
I don't think there's any harm in implementing payments early in a freemium model. If users have access to plenty of free content, with a rich enough experience where you don't feel every click almost leads to a paywall. Cashflow is king in business, and I think it's always worth giving the opportunity to early adopters who want to support a startup. I think it's easy to forget the advocates who actively want to support an early stage business thrive.
Jim Morrison
@jasonscott yeah, this is a really good point. Having the option is pretty important - https://onesub.io showed that where, probably, most of the paying subscribers are Seedrs investors, local tech-community folks or friends & family... What worries me from that situation though is it skews our perception of the value we're creating for the other n-million/billion potential customers... while not really actually generating enough revenue to make the tea.
Nabeel Amir
It simple: when you are certain that your engaged users have become this-much used to your platform (offered for free before) that they will now pay so as to continue using it.
Jim Morrison
@nabeel_amir how much is "this-much" šŸ˜¬ FWIW - the product (https://www.producthunt.com/upco...) is basically a pro-active little chatbot... so we hope it will be natural, after a few weeks of engagement, to start asking the reader ("user") directly if they would like to start contributing. We hope it will be a natural part of the conversation. šŸ¤ž
Deepa from PLG Works
We have learnt it the hard way. The best time to charge is ASAP. Giving the product for free is not getting you users you want, it is just giving you false hopes that product works.
Jim Morrison
@shahdeepa that's Deepa - that sounds like sage advice. May I ask, is/was your product a single-purchase product or a habit/subscription style product?
Deepa from PLG Works
@jimbomorrison Thursday has subscription based pricing. And while we were building that, for a short time it was a single purchase model and that too 'play now, pay later'.
Abraham Samma
Many people say charge as early as possible. That makes sense because it's the most important way of validating your startup from the get go. However, the question then becomes what is the right amount to charge.
Jim Morrison
@absamma Yeah, I totally get what you're saying on the validation front... I guess ours is not a "single-use" product (like a shop, let's say) - it's a "regular-use" product. As such, the sheer act of a person getting into the *habit* of using it is massive validation. The way I'm thinking about it is, until we can validate a healthy habit formation, whether or not we can charge for the product is a bit irrelevant, isn't it?
Abraham Samma
@jimbomorrison I would say yes, especially if you are aiming for a subscription model.