More Freemium and Startup Marketing Thoughts

Same excuses for a lack of meaningful blog posts recently…  But the good news is I’m nearing the end of my immersive interim VP marketing role, and will soon transition to a part time advising role.  This should free me up to spend more time with the blog.

Until then, here are three very raw startup marketing thoughts that have been running through my head lately…

  1. Freemium will be a dominant business model in software and online services. It is easiest to execute when disrupting large existing categories with strong demand.  It is more challenging to execute when growing a new category through aggressive marketing spending. Getting all the pieces right will dramatically improve your ability to market and grow a freemium business.  Premium only is rarely a viable option – you will eventually lose to the company that introduces a freemium model in your category.
  2. Early stage marketers that aren’t looking at the full business picture likely won’t be successful.  Most of the obvious marketing levers are irrelevant without the right business model, product/market fit, tracking systems, etc. Early stage marketers need to spend time perfecting the whole economic picture.  Marketing might not even be the right title to give this role, but the marketing function is a critical component.
  3. The traditional Silicon Valley rift between engineering and marketing is shrinking.  The increasing importance of analytics in marketing means effective marketers can more easily connect with mostly left brained engineers. Additionally, some of the most leveraged online marketing activities require close coordination with engineering (such as viral marketing and conversion optimization). The trend of great marketers coming from engineering backgrounds will likely accelerate (and no – I don’t have an engineering background).  Still, all tech marketers will need to have a good balance of right brain and left brain talents.

I plan to expand these thoughts in future posts.

7 thoughts on “More Freemium and Startup Marketing Thoughts

  1. Sean,Love your blog. I think I might be a marketer trapped in a CFO’s body.Question: do you have any stats for conversion to paid rates for freemium services that target business users rather than consumers?Thanks,Mark

  2. Sean – I’d love to talk with you a possible next interim vp-marketing role at an internet start-up.How can I reach you? Thanks,

  3. The typical range I’ve heard/experienced is 1% to 5%. It really depends on testing/optimization and where you draw the line between your free and premium products. If most of the value is in the free product, you’ll have a very large free user base, but driving upgrades will be difficult. Visa versa is also true – if all the good stuff is in the premium product, upgrade rates may exceed 10%, but it will be on a very low base of free users. Hope this helps.

  4. Sebastian- I appreciate you reaching out to me. I started to look at a few other projects, but found it was cutting into my time at my current startup. I’d love to connect with you mid july when I finish fulltime here. My email is seanwellis at gmail … com.

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