Albert reposted this
In August 2017, Albert ran out of cash. We had 50k devoted users, but Albert was free, so we lost money. Here’s the story of how we went from free to paid, and how it completely changed our trajectory: https://fnd.news/3tsHfNl In early August 2017, after one last unsuccessful fundraising attempt, we had one option left: ask customers to pay. We needed to be sure that customers loved the product enough to pay for it long-term, so we asked every user to pay what *they* thought was fair. We showed a slider ranging from $0 to $14 a month, and the user could pick any value. On the morning of August 11, 2017, we launched the slider. Over half of our users voluntarily chose to pay more than $0, averaging $4 per month. Albert went from $0 to $1 million in annual recurring revenue almost overnight. We had almost missed the most obvious way to build a sustainable business: charging the customer. On this journey, we've learned three important principles to building a successful paid product: 1. Bundling. Charge less for the entire service than the total cost of all individual features bought separately elsewhere. This has worked well for Albert. 2. Clear pricing. Customers want to know what a service truly costs them. 3. Onboarding friction. One of the most unintuitive things about charging customers is that the added friction is a good thing. When a customer makes a decision to pay for a service, even if for a free trial, they're committing to investing enough time in the service to find out if they will use it. In fact, this principle is so powerful—albeit counterintuitive—that Albert's onboarding flow is over 50 screens! Millions of people have completed this flow. By the end of the onboarding flow, we know if we have a dedicated customer and the customer knows if they want to dedicate themselves to the product. A win for both sides. Charging customers brings focus. Removing "free" brings clear focus across a company. Everyone at the company knows who to serve, who to support, and who to build for. Costs are aligned with revenue. Perhaps most important is the clear message to the customer: vote with your wallet. If you don't like the product enough to pay for it, you'll leave. The company knows that it must always deliver a great product, because mediocrity will be punished with churn and lost revenue.
I can still hear the Genius gong going off 😁
A bunch of scam con artists y’all take are card information and don’t let us remove it of cancel anything charge me 200 to 100 a month it’s pathetic how yall scam
Hypothetical thinking out loud… This Makes me think about healthcare services… where pricing is anything but clear. I wonder how this thinking / ux could apply in that space. - Great post and thank you for sharing. I love reading “real life” examples of business decisions and impacts.
That’s interesting, but you recently put into place a policy change that forces all customers to use genius for $14.99 a month or close their accounts. I think 14.99 is very different than $4
How do you find charging impacts churn? Expecting your churn went down 🥳
IF YOU ARE POSITIVE YOU “ASKED” SHOW US PROOF. YOU CANT CAUSE I NEVER RECIEVED NOTICE.
YOU DID NOT ASK ME TO START PAYING YOU JUST STARTED CHARGING WITHOUT MY CONSENT.
inspiring.
Raphael Guastaferro bundling
Co-Founder & CEO at Finofo
6moGreat story. Thanks for sharing, Yinon. How was this communicated? Did you send an email to all users? Or was it communicated directly on the app? Would love to see the copy you used to communicate this change.