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Comment by gnicholas | Hacker News Reader

We attempt to do what you describe: charge users for whom we create lots of value (power users), and give it away for free to others (casual users).

The difficulty is that if you want word to spread among communities of people that contain your power users (and would-be power users), then by charging them money, you're constraining growth in those key communities. Any thoughts on how to deal with this specific tradeoff?

I'd be interested to hear more of your insights, especially about how the balance might change over time. Do you give away more for free in the early days, to raise more awareness? How do you know when it's time to stop giving it away for free?

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>The difficulty is that if you want word to spread among communities of people that contain your power users (and would-be power users), then by charging them money, you're constraining growth in those key communities. Any thoughts on how to deal with this specific tradeoff?

We gave away premium licenses for free (no strings attached) to some socially active power users. It helped us to increase awareness.

Also, I found that premium users are more loyal in general and more willing to share the knowledge about our product.

>Do you give away more for free in the early days, to raise more awareness?

We surely did give away more for free in the early days. Partly, because we still figured out the product/market fit. As we pinpointed the PMF and added new features we periodically rebalanced the free offering. Since many new features became also available in the free edition we reduced some limits and capabilities of the free edition.

>How do you know when it's time to stop giving it away for free?

We never stopped. We still have a freemium model [1].

Overall, we try to keep the ratio of premium to free users at around 1:5. With my previous product, the ratio was 1:50 which was too unbalanced as I realized later.

[1] Comparison of our free/premium editions: https://easymorph.com/buy.html.

How much do you think the ratio of free/premium should depend on the cost of providing services? Obviously if there are large hard costs associated with each user, the ratio can only be so high. But if there is a low cost of service to free users, what's the next step in figuring out the right ratio? Is 50:1 always too high?

I believe the answer is not in the cost of providing service but rather if your product creates value more than its price or not. Just a few questions to think about: why are there so many free users? Is it because the premium can't provide enough value for them to justify purchase? Is it because the need in general is not significant so no matter how good your product is its conceptual value is not significant? Is it because the free users simply are not aware how to extract more value from your product with the premium version?

I suppose having answers to such questions would give a better understanding of the most efficient free/premium ratio.

Feel free to reach out to me by <username> at easymorph dot com for a chat.

what the hell, I love your beeline reader!

Curious to know if you've seen/used it before, or if you just saw it now. FWIW, we have a server-side widget that can be installed on blogs, in case you're interested. Helps maintain attention, and a study done by CNET found that readers were 35% more likely to finish an article when reading with BeeLine.

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