I don’t need every customer. I’m primarily in the business of selling a product for money. How much effort do I really want to devote to satisfying people who are unable or extremely unlikely to pay for anything?
Marco Arment on his decision to discontinue the free versions of Instapaper, his save and read later application. I would say, $4.99 is a fair price for an app that adds so much daily value. More importantly, I admire Marco for taking this stand and doing what is right for his business and more importantly for his paying customers. Of course, his decision goes against the Freemium movement. I wonder if others will follow Arment’s example.
I do agree that it’s a strong move against the Freemium model. At the end of the day, the value dictates the price that can be charged to sustain profitability. If you are a game changer, you have the right to be valued accurately. At the same time, if you are a copycat and haven’t really added any value, not so much.
Very well put Bilal.
I have to say, as a paying user, I submitted a support request several months ago and simply never heard back. I ended up figuring it out for myself after some trial/error (over a week or so), but once resolved I have a feeling the issue could have been fixed by a support team pretty quickly.
I absolutely love Instapaper as a product, and have no regrets about paying for it. I bring up that scenario only because I feel that if you charge for a product, and people pay for it, there will be an expectation of support & commitment that must at least top the freemium model it now goes against.
However, with the success of the product so far, I have no doubt that with more paying users, Mr. Arment could probably pull this off just fine.
Sean
I think it is going to be helpful for guys like you who are supporting the product with dollars and are expecting a modicum of support, if (and when) you need it.
there is something great about a freemium model and then paying for awesome extras. I get it… but i don’t.
Instapaper isn’t exactly difficult to duplicate. Marco has done a very good job of it yes, and he has every right to charge five bucks for his work. I hope that it puts a little cash in his pocket… but it’s not going to be a long-term business. I wish him well.
I wish the people who are going to replace his free product even more well, though.
T
I think there are many other options already on the market. I think what is working for the model is that it is simple, elegant and immensely useful. if someone beats him on the merit of their product so be it – for now as a paying customer, i am fairly happy with Instapaper because it works.
let’s see how this evolves.
Freemium makes sense if you have a solid free product + a compelling reason for people to upgrade to the pay version.
Arment is pretty clear in his post that he saw low conversions and that most people using the free version were satisfied and saw no reason to upgrade.
So I think this is less a denouncement of the freemium model than a realization that Instapaper wasn’t an ideal fit as currently packaged.
Other companies — Evernote is a good example — seem to be doing a fine job profiting from the freemium model and converting a decent number of free customers into paying ones.
Great points Jim.
So I don’t quite know the conversion rates for Marco’s app, though I do think you have a point. I wrote about why Evernote works here. http://bit.ly/nm0C7 I think it answers your comments and extends them.
With alot of ppl having mobile on all the time, they’ll just keep sites open on their mobile devices to read later. Also, with Delicious still around, why pay?
Kudos to Marco Arment for voicing the thoughts of many developers. Users will pay for the value they derive. One may argue that ad-based revenue can make up for free services. The customer pays for the service by disclosing information. It is the VC funded investments which skew the argument and favor Marco’s stand. Some of the funded companies providing free services are buying customers with the hope of inflated valuations, in which case the true value of the services are masked.
TANSTAAFL!!! Free Luna :) or, as the case is here, $4.99 Luna. Kudos to Marco for this experiment. Let’s see what happens. Are people locked in to instapaper? It’s a test of lock-in as a product marketing strategy. Thanks for spotlighting this.
Freemium makes sense when users of the free version are likely to be vectors to buyers of the paid version. Instapaper happens not to be such an app, but they do exist.
At the end of the day, it’s difficult to justify a free version when it is not paying the bills and taking up that much dev and customer service time. Simple as that. At the end of the day, we have to pay the rent and eat and other banal yet essential things that free doesn’t pay for. I commend Marco for his stand, and reverting the a millenia old business model of “I made this, you find it useful, you want it, you buy it”. It’s not revolutionary, it’s just sensible.