Moving from free to freemium

If you used between February 2015 and June 2016, you'd remember a totally free service where you could publish individual “blog” posts without signing up. I had launched by building a simple website that showed some nice-looking text, along with some apps to publish that text from whatever device you wanted. It was all anonymous — you couldn't sign up even if you wanted to — and it struck a chord with all kinds of people who just wanted a simple digital tool to write with.

As I launched on our final native platform (iOS) five months in and wrapped up the web application, I started thinking about how to make it sustainable.

A business model

From early app reviews and the regular feedback I solicited from users, I saw that many people liked for the same reasons I did: low-friction to get started, the same amount of ease afterwards, and privacy for your thoughts throughout. As I thought about asking people to pay for this product, I knew I couldn't lose that initial ease. I also didn't want to suddenly force an ultimatum on everyone, like pay for this product or get out.

So I took some of the feedback I'd heard over the first 7 months and devised version 2.0. It'd let you sync/access posts across devices, and create a pseudonymous blog (since they'd take about the same level of technical effort). While I was at it, I'd offer additional features to go along with these blogs that people could pay for.

Over the next 10 months I worked part-time on building 2.0. Since I wanted blogs and paid plans to be released as one big chunk, I couldn't do the iterative releases I'd been doing up until that point. If I did want that satisfaction of just getting something out into the world, it'd have to be something So during this time I started on (now finally in alpha, soon to fully launch) and released HTMLhouse, which provided a bit of engineering-as-marketing.

I continued building a following on social media and getting regular feedback, including with a survey looking for answers to questions like “How much would you pay for feature X?” As a reward, respondents to that survey got a link to reserve their username ahead of time, and could log into their account as soon as 2.0 launched. Most responses were helpful to at least determine what features people wanted most — and many seemed interested in paying. But I wouldn't learn which features were really worth paying for until 2.0 was out in the world and I simply asked for money to get them.

We launched with one paid tier: a “Pro” subscription for $24 / year. Few people upgraded in the first two months, and others said they simply didn't need all it offered (like 10 blogs / aliases). So I soon added a “Casual” plan at $10 / year.

Some users went for the Casual plan, but I started getting new customers more regularly by adding new (needed or requested) features over the next few months, and only adding them to paid tiers. Soon we brought Pro up to the price point I wanted, $4 / month, after announcing the upcoming change and that existing subscribers would be grandfathered in. A few people upgraded just to get in at the lower price, but I didn't hear any criticism of the price change. Then, once the Casual plan offered plenty of value for its price, I started only adding features to the Pro plan. Today, Pro is our most popular plan.

Keeping free-forever

Besides free marketing, a free product gives a privacy-first platform like ours huge value by increasing the size of the crowd for our writers to blend into. In the same way you become more anonymous on the streets of a large city than a small town, an online crowd sharing their writing in one place makes individual identities less certain. In this way, both free and paying users get more value from the product by us having as many people as possible using it.

As for the economics, we saw our first cashflow-positive month in November. Though we haven't reached profitability, we get to look at things differently than most fast-growing, conquer the world startups would. There's no rush to beat out competitors or be first to something, because it wouldn't give us any meaningful advantage. So we have the luxury of growing at a pace that fits our desire for quality, and finding whatever there is to discover along the way (and share it, as we do on our transparency site).

Could we charge more and be profitable today? Perhaps. Would this product be useful to as many people then? No — which is the main point. I want to see everyone participate on the web without it costing them their email address, attention span, or dignity — and if it can cost only a buck or two to sustain it, it shouldn't cost any more than that.

If the web must live with the reality of “free” services like Google and Facebook, we have to counter it with truly free services that leave out the predation and sale of its users. There are infinite ways to make a sustainable product, and at this final hour of an ad-driven, surveillance-funded web, we should all consider these more ethical business models.