Business model · Strategy

What companies, if any, have a freemium model better than Evernote's

Varun Gupta Sr. Front-End Developer at Code Brew Labs

November 4th, 2016

Evernote is a great example of a freemium business model, one of the best in my opinion. They are very good at sharing their data and strategical thoughts around the model. Is Evernote the best service at executing this?

Even better perhaps is their retention of over 40% of their users over a long period of time. What I mean with this is that you use their service for some time and lets say a year or so, after you have invested a significant amount of your time with the product, they hit you with the premium blocker. I would assume this is a genius move for them as after a user has put so much into the product you pay whatever you have to pay to continue using the service.

I am looking for some feedback on other companies that offer a freemium business model and your thoughts/experiences with using them. Especially my interest relies on the freemium to premium transition as being free forever is not sustainable. While I know freemium models are not for every business, I believe it may be for us in the short term to grow fast.

Rodrigo Vaca Product & Marketing

November 4th, 2016

Varun -

Sorry to break it to you, but Evernote is *hardlly* an example to follow these days, particularly when it comes to making money:
http://www.businessinsider.com/evernote-replaces-leadership-team-2016-3

They have 150M users, and they can't make money to stay afloat. You judge if that's a great example of a freemium business model!

Rodrigo

Jen Fuerte Founder at TeachrTec

November 6th, 2016

One note about Evernote - in the freemium plan - if you make changes, you can not "undo" No control Z, no backup. Many don't know this, only discovering it after erasing crucial notes by mistake, lost forever :( Maybe if more know, they would get the paid plan.

Dimitry Rotstein Founder at Miranor

November 4th, 2016


But there are other freemium concepts. I'm not sure that any is superior to others in every case - I think each product may benefit most from one or more possibilities, as follows:

1. Premium version has added features, e.g. Avast (paid version includes more diverse and powerful protection), Angry Birds (paid version has more levels).

2. Premium version has LESS features. i.e. paid version removes certain artificial inconveniences or annoyances (having to see adds, having to wait 10-60 seconds between execution steps), e.g. DepositFiles.

3. Premium version has a different license. Avast in its early days offered the same product for free and paid customers, but free version could only be used on a private computer - if you wanted to install it on a work computer you had to pay (may not be the most effective concept if Avast apparently dropped it, but who knows).

4. Premium version includes technical/customer support and/or training, e.g. RedHat (I think).

Of course, there are other ways of making money from an otherwise free product, e.g. adds, donations, in-app purchases, affiliations, etc.

Chicke Fitzgerald

November 6th, 2016

I believe that my company's model is even better.  We not only provide our product free, but we revenue share back with our clients and their customers when the product is used.  We have a utility that is viable for well over 50% of companies, venues and events and for 67% of those that travel to those places.