What’s your view of the freemium model?

Answered by: Jason Pressman, Managing Director

Category: Marketing and Sales

I think the Valley is particularly enamored with the freemium, free trial, low friction business model. There was a healthy Board debate at Zuora many years ago where we talked about is there some easy button or quicker insertion point for billing? Ultimately it relates to departmental buying and if it's multi-departmental, you need to look at the product characteristics. If you have a product that can be used either historically by an individual user like a sales rep at Salesforce or because it's a disruptive model like New Relic where they went to an individual developer that can deploy APM instead of selling it to I.T. then that characteristic where the end user can adopt something indicates that there really is a place where it's potentially valuable to offer a freemium model. But I think that a lot of people get this wrong today where they're trying to apply a freemium free trial model to something that has deep workflow that is embedded across departments or has multi-departmental buying. And there are lots of great companies like Zuora, like Anaplan, like Apptio - all in our portfolio - that have built companies selling enterprise software. There's still a lot of great companies doing that. So don't go freemium free trial if it's not right for your business.