FREEMIUM is NOT dead, maybe Business Model de riguer - Fred Wilson
My take: most people want the CORPORATE route (what I may call the short-cut route) and DO NOT want to master the RETAIL side of things - that’s why we need to study VERTICAL MARKET SOLUTIONS in the first place. Otherwise every Tom, Dick and Harry (or Juan, Pedro and Jose) will be vying for business from the Top 1,000 (or 2,000 or 3,000 or 4,000 or 5,000 take your picK) corporations and end up being in a RED OCEAN strategy. As Fred Wilson puts it:
“As I noted in the comments to Roger’s post, we’ve struggled with early stage investments in enterprise oriented web services. Sales to enterprises often require expensive sales teams and it’s much harder to know if you’ve nailed the product/service with feedback from a limited number of enterprise customers.
It’s much better, in my opinion, to go with the freemium model, give a version of the service away for free to all comers, get a lot of users, get good market feedback, then develop a premium version of the product/service for sale to enterprise customers. If your free version is popular with a lot of users, your customer base is the target for the upsell and you might be able to live without an expensive sales force initially. And, of course, keep your costs really low until you start to get revenues.
In summary, freemium is far from dead, in fact it may be the business model de rigueur.”
Yes Virginia, there is FREEMIUM and it is here to say (and Merry Christmas to you too!).
posted by Paul “The Pageman” Pajo
