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To Freemium or Not Freemium?

Dusty Candland | | saas, cloudsh

I usually don't write about the side projects I'm working on. In the spirit of changing that, I'm going write about my thoughts for CloudSh & the Freemium model.

CloudSh is a SAAS service providing search for static sites, or any site really, as long as the content is public.

I initially planned on having an free level, then changed my mind, then changed it again! WTF?! It's hard working in a vacuum!

The bad

There are a lot of stories of Freemium going bad.

Baremetrics relays their story of trying it and ultimately going to a free trial period.

What went wrong?

  • Huge increase in customer support
  • Huge increase in server load & costs
  • Lost time dealing with both of those
  • Poor customer support for paying customers

Basecamp is another example of a very successful SAAS app that eventually removed their free plan. Though they still have one for students and teachers.

I've seen a number of companies offer a free for open-source plan. Especially in the developer space. I like this idea.

The good

On the flip side it's worked for a lot of companies, MailChimp and SendGrid jump out as good examples. I've used both.

ChartMogul argues for freemium with some suggestions to limit the downsides.

It seems like a good way to allow people to get a good idea of the value the product provides. And when it makes sense, hopefully you'll upgrade.

As an early and unproved startup, it can help build your user base and improve the product.

For MailChimp, there is another benefit, alluded to in this IndieHackers post; powered by, a marketing channel nobody talks about

So, there are some benefits:

  • Increased user base
  • Validation that the product is useful
  • Powered by marketing

Sooooo, what about CloudSh?

I'm going to offer a free plan and see how things go. I'm going this route for two reasons. First, the powered by marketing aspect is pretty appealing. And secondly, I want people to use the things I build!

The free plan will have some hard limits and limited support (though since I'm hoping to get feedback, not too limited).

I'm also going to offer a free for open source plan because I find it hard to contribute to open source projects, but use them all the time. This will be a way to try to give back in some way.

What do you think about Freemium?


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