Six facts you must not know about free value-added


editor’s note: over the past few months, the discussion on whether free value-added has been successful has not been interrupted. IVP partners and researchers got the following six after months of interviews with several free value-added leaders such as 37signals, Dropbox, and Evernote. It sends signals far more than the four words “free added value”. And you will find that any of the following facts are based on the previous one, the front and the next one. Now that I have the patience to turn it over, please ask the reader to read it patiently and you will reap the rewards.


over the past few months, the debate about whether the free value-added business model can work is pretty fierce. For some people, free value-added is like a money trap that sacrifices a company’s revenues and forces a company to feed riders who will never become paid customers. In other people’s eyes, free value-added is the future of the business, becoming a reasonable trend in the cost of bandwidth, storage, information processing gradually zero. But the two parties acknowledge that the value of free value-added is very large (both for users and for themselves). An article in the Wall Street journal says free value-added is like a samurai sword: “unless you’re a master of it, you might cut off your arm.”.”

in our view, free value-added in the industry as a whole has a large-scale subversive significance, and this model also needs to be correctly interpreted. So, in the past few months, we are on the 37signals, Dropbox, Evernote, GitHub, HootSuite, New, Relic, SurveyMonkey, Weebly, leader of the Zendesk the number of freemium were interviewed, the following six facts / lessons. These six, please make good use of everyone!


1. starts with products,

in the interview process, is a little bit companies repeatedly mentioned: please put the first! Although the design for a high quality of the products are very important to every startup, but for an adherence to the freemium model of the company, the “product” is particularly important.

The so-called

is not afraid of deep alley, a perfect free value-added products do not need human intervention and a lot of overhead, will have their own will to market themselves, successful access to new users (either for free users or subscribers), and automatically fix customer service work — a major premise is that inside I love you, the customer to the product.

for freemium companies, the average rate of conversion from free to paid is typically between 1% and 10%. And what they’re producing