Freemium

I loved this quote by Tristan Harris in the New York Magazine article The Internet Apologizes … “We cannot afford the advertising business model. The price of free is actually too high. It is literally destroying our society, because it incentivizes automated systems that have these inherent flaws. Cambridge Analytica is the easiest way of explaining why that’s true. Because that wasn’t an abuse by a bad actor — that was the inherent platform. The problem with Facebook is Facebook.” ...

My partner Seth Levine has an outstanding post up today about the freemium model. It’s titled Pricing models, the freemium myth and why you may not be charging enough for your product and is worth going and reading right now. He covers a bunch of stuff, nicely divided into the following topics: Beware of too many pricing tiers. Have a clear delineation between product tiers. How about overlay features that you charge by the drink for? Be careful what you put a tariff on. The freemium myth. Don’t be afraid to charge for your product. Beware the long “trial period”. Seth has become “the pricing model guy” at Foundry Group – we’ve been dragging him into every pricing conversation whenever they come up. ...

A few weeks ago I was on two panels at Google I/O 2010 . The video from one of them – Making Freemium work – converting free users to paying customers is up. Don Dodge from Google is the moderator and my fellow panelists are Dave McClure, Jeff Clavier, Matt Holleran, and Joe Kraus. It’s 60 minutes long, but we covered a lot of ground.