Comments on: When Should a Startup Start Charging?

By: Mark Westling

Mark Westling — Wed, 23 Dec 2009 22:37:21 +0000

I agree with you on charging enterprises immediately. Not only does your fee help the enterprise with value calculations, there’s also a strong sense within enterprises that value is correlated with cost — in other words, if your product is free or cheap, it’s probably not worth much, and higher priced competitors will be considered. Once an enterprise makes any kind of investment in your product, you’re likely to be kept longer due to the “sunk cost” effect. There are many other reasons, too numerous to go into here.

By: Mark MacLeod

Mark MacLeod — Sun, 20 Dec 2009 18:33:05 +0000

Sean, in a fremium biz, do you think some minimum user base is required before you turn on the revenues? Or is it just about product / market fit?

By: milof: "For startups targeting enterprises, it actually does make sense to | flaker.pl

Fri, 20 Nov 2009 10:55:52 +0000

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By: Lucy

Lucy — Tue, 13 Oct 2009 21:38:31 +0000

Hi Sean,

Great blog. I really appreciate your pieces on P/M Fit and would love to know what answer options you use when using the survey question “How disappointed…”. We’ve started using it on User surveys but want to make sure that we’re asking it the right way so that we can use the 40% mark effectively.

Thanks!

lucy

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By: Gregory Schnese

Gregory Schnese — Sun, 06 Sep 2009 17:08:16 +0000

Sean,

Besides sureveys, how would you suggest a startup measures their product/market fit?

For example, I may buy something from bestbuy.com and after my purchase they ask me to fill in a survey. I may or may not do this, I assume many people don’t. Best Buy could use the transation as a metric, startups could possibly use sign ups…

Greg

By: Sean

Sean — Fri, 04 Sep 2009 23:27:47 +0000

Thanks Sarah. I have a few companies I’ve worked with that waited to implement business models. Xobni only recently implemented V1 of their business model and Flexilis has not yet implemented their business model. Unfortunately my NDA prevents me from going into the specific details of what has happened with either company. Also at LogMeIn we had one product (targeted to small businesses) that was free during Beta. This free Beta was essential to getting the product right. Once we started charging for it, the sales conversion rate was strong. Again, I apologize for being limited on the details I can provide. On the enterprise side, I’ve been working with Socialcast. They’ve charged for a version of their product from early on and I believe this has helped us hone in on the right product and market.

By: Sarah Milstein

Sarah Milstein — Fri, 04 Sep 2009 22:05:52 +0000

Great post, Sean. Can you share an example or two of startups that waited, how they went about charging users, and what happened? I’m not looking for a novella; even a short example would help me get my head around this. Thanks in advance.