1. Baking Dough
Freemium Lessons from the Real World
David Weekly @ SF Freemium June 14, 2012

2. PBwiki PBworks
• June 2005: First private wiki host! Free+ads.
• July: $5/mo -> NO ADS (unlimited users)
• 2006: $5/10/20 a month
• 2007: $10/20/35 a month
• 2008: $20/user/mo (unlimited wikis)
• 2010: $20-50/user/mo [verticalized]

3. PBlearnings
• A la carte pricing confusing/complex.
• “Principle of Least Surprise”, adapt w/users.
• When cheap, 100% self-service
• Consumer-to-enterprise = hard!
• ...but tool-to-solution = >100x $$$

4. Key Thresholds
• $5: impulse consumer buy
• $50: prosumer purchase
• $500: casual business tool
• $5k: serious business tool
• $50k: partial solution
• $500k strategic solution

5. Conversion Rates
• Expect 1-5% for consumer freemium.
• Evernote: can take a long time to get to 5%!
• Accumulate unique data (notes, wishlists,
travel history, etc.) for longterm value.

6. Get Baked!
• Retention: LTCV++
• Sharing: CAC--
• Success: CAC < LTCV
• Person: become a ritual (for a group)
• Company: become a key (team) process

7. Conflicting Lessons
• Enterprise solutions pay well, but...
• Consumer: wider audience than ever!
• BillUser() call in all OS APIs, soon.
• Consumerization of the enterprise

8. Clear Lessons
• Ad inventory on mobile is atrocious.
• Exactly where payment APIs are strongest.
• In-app purchase is dominating.
• Ads overall are a poor user experience,
conflicting with what the user wants.

9. So
• Beware ads. (other than as a stick to
encourage people to upgrade)
• Retain data.
• Make purchase easy.
• Encourage sharing.
• Be useful!