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Freemium & The Enterprise -
   Proceed with Caution
We help web companies make print money
Lincoln Murphy Sixteen Ventures
Have you read this? If not, get your copy today!
Freemium is a Marketing Tactic
    not a Business Model
Marketing should align with your market, right?
How does your market feel about free?
Consumer-oriented Customer Acquisition Techniques
Businesses are DIFFERENT than consumers...

         ...and that is a good thing!
Businesses have more MONEY than TIME
Mo’ Money, Mo’ Problems


Problems




                    Money
The best idea:
Solve a real business problem &
charge money for it
3%
Back of the Napkin Math -
    Is Freemium even possible in our market?


Addressable Market x Reach % x Sign-up % x 3% =
   Potential Paying Customers from Freemium
Back of the Napkin Math -
    Is Freemium even possible in our market?


Addressable Market x Reach % x Sign-up % x 3% =
   Potential Paying Customers from Freemium

     Health Clubs in the US x             30,000
          30% (reach) x                    9,000
         50% (sign-up) x                   4,500
     3% (conversion to paid)
Back of the Napkin Math -
    Is Freemium even possible in our market?


Addressable Market x Reach % x Sign-up % x 3% =
   Potential Paying Customers from Freemium

     Health Clubs in the US x             30,000
          30% (reach) x                    9,000
         50% (sign-up) x                   4,500
     3% (conversion to paid)                135
Back of the Napkin Math -
        Is Freemium even possible in our market?


   Addressable Market x Reach % x Sign-up % x 3% =
      Potential Paying Customers from Freemium

           Health Clubs in the US x              30,000
                 30% (reach) x                    9,000
                50% (sign-up) x                   4,500
     et ing 3% (conversion to paid)                135
 ark s!
M op
  St            Most companies just Lay & Pray
Back of the Napkin Math -
      Is Freemium even possible in our market?


  Addressable Market x Reach % x Sign-up % x 3% =
     Potential Paying Customers from Freemium

       Health Clubs in the US x             30,000
 ro ng      30% (reach) x                    9,000
W rs
 Use       50% (sign-up) x                   4,500
       3% (conversion to paid)                135
                Beware False Traction!
The Wrong Kind of Traction




         http://www.accesshealth.com.au
“The long and the short of it is that
      we got a ton of Freemium users, but they
      were mostly not customer prospects.”
                   - Bob Warfield

         http://smoothspan.wordpress.com/2010/03/25/freemiums-for-saas/




Attract the RIGHT KIND of users
Where does Freemium work?



        Wide-Band Horizontal (HCM, ERP)
  Narrow-Band Horizontal (Box.net, Yammer, Xobni)
        Vertical Specific - Wide or Narrow
Where does Freemium work?


         Wide-Band Horizontal (HCM, ERP)
Narrow-Band Horizontal (Box.net, Yammer, Xobni)
         Vertical Specific - Wide or Narrow




    That’s why they’re here & not the other types
Freemium Methods that Work?


   Alternative
                 Land &
    Product
                 Expand
    Strategy
The best idea:
Solve a real business problem &
charge money for it
New Pricing & Revenue
Modeling Programs coming
         in April
Contact Info

        Lincoln Murphy
  http://sixteenventures.com
lincoln@sixteenventures.com
        @lincolnmurphy
        (972) 200-9317

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Lincoln Murphy Sixteen Ventures

  • 1. Freemium & The Enterprise - Proceed with Caution
  • 2. We help web companies make print money
  • 4. Have you read this? If not, get your copy today!
  • 5. Freemium is a Marketing Tactic not a Business Model
  • 6. Marketing should align with your market, right?
  • 7. How does your market feel about free?
  • 9. Businesses are DIFFERENT than consumers... ...and that is a good thing!
  • 10. Businesses have more MONEY than TIME
  • 11. Mo’ Money, Mo’ Problems Problems Money
  • 12. The best idea: Solve a real business problem & charge money for it
  • 13. 3%
  • 14. Back of the Napkin Math - Is Freemium even possible in our market? Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium
  • 15. Back of the Napkin Math - Is Freemium even possible in our market? Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium Health Clubs in the US x 30,000 30% (reach) x 9,000 50% (sign-up) x 4,500 3% (conversion to paid)
  • 16. Back of the Napkin Math - Is Freemium even possible in our market? Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium Health Clubs in the US x 30,000 30% (reach) x 9,000 50% (sign-up) x 4,500 3% (conversion to paid) 135
  • 17. Back of the Napkin Math - Is Freemium even possible in our market? Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium Health Clubs in the US x 30,000 30% (reach) x 9,000 50% (sign-up) x 4,500 et ing 3% (conversion to paid) 135 ark s! M op St Most companies just Lay & Pray
  • 18. Back of the Napkin Math - Is Freemium even possible in our market? Addressable Market x Reach % x Sign-up % x 3% = Potential Paying Customers from Freemium Health Clubs in the US x 30,000 ro ng 30% (reach) x 9,000 W rs Use 50% (sign-up) x 4,500 3% (conversion to paid) 135 Beware False Traction!
  • 19. The Wrong Kind of Traction http://www.accesshealth.com.au
  • 20. “The long and the short of it is that we got a ton of Freemium users, but they were mostly not customer prospects.” - Bob Warfield http://smoothspan.wordpress.com/2010/03/25/freemiums-for-saas/ Attract the RIGHT KIND of users
  • 21. Where does Freemium work? Wide-Band Horizontal (HCM, ERP) Narrow-Band Horizontal (Box.net, Yammer, Xobni) Vertical Specific - Wide or Narrow
  • 22. Where does Freemium work? Wide-Band Horizontal (HCM, ERP) Narrow-Band Horizontal (Box.net, Yammer, Xobni) Vertical Specific - Wide or Narrow That’s why they’re here & not the other types
  • 23. Freemium Methods that Work? Alternative Land & Product Expand Strategy
  • 24. The best idea: Solve a real business problem & charge money for it
  • 25. New Pricing & Revenue Modeling Programs coming in April
  • 26. Contact Info Lincoln Murphy http://sixteenventures.com lincoln@sixteenventures.com @lincolnmurphy (972) 200-9317