The Startup Chat with Steli and Hiten on Smash Notes

The Startup Chat with Steli and Hiten podcast.

December 31, 2019

Unfiltered insights and actionable advice straight from the trenches of startup and business life. The show hosts, Steli Efti and Hiten Shah, are both serial entrepreneurs who have founded multi-million dollar SaaS startups. Being busy CEOs of fast-growing companies, they know the value of your time and make sure you get the most out of each 22 minute episode. Tune in for new episodes every Tuesday and Friday.



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In today’s episode, Steli and Hiten talk about the benefits of using freemiums (free plans) for your startup. SaaS companies are known for implementing free plans and with good reason—it’s an incredible way to get people hooked onto your product or service. Tune-in to learn the pros and cons of implementing freemiums and how to turn your free users into paying ones!

Time Stamped Show Notes:


00:03 – Today’s topic is freemium

00:37 – The first episode about freemium was The Startup Chat’s 3rd episode

00:58 – Listeners say the freemium episode was one of the best episodes of this podcast

02:21 – Hiten’s opinion of SaaS companies having freemiums has only grown stronger in the last two years

02:31 – If you have a SaaS business, you NEED a free plan

03:39 – “If people start using your product, why would you ever want them to stop?”

04:08 – A free plan helps you bring people onto your platform

04:19 – Without a free plan, you are missing a growth opportunity

05:04 – Having free users is a long-term marketing play

05:36 – In Close.io, there’s a distinction between their audience, people who engage in their marketing, and people who engage in their product

05:55 – When you have people using the free version of your product, they are still part of your marketing and are not actual customers

07:11 – Hiten often finds that the product team is responsible for the free plan users

07:38 – Sales want qualified leads; these leads can be those who have signed up for the free plan

08:34 – Freemium has activity points that people reach that qualify them for sales

09:21 – If you’re not into long-term marketing, don’t offer freemium. Or, you can offer it, but have an outbound strategy for sales with a paid product right away

09:53 – The free plan gets you marketing, word of mouth, and lowers your customer acquisition cost

11:04 – Do you have an opportunity for a free plan in your market?

12:02 – The key to setting up a free plan is knowing your limits

12:18 – A CRM tool with one free user is a classic example of a per-user charge

13:08 – Advanced settings or upgrades are also a great strategy for opting-in your free users

13:18 – If you are product-challenged, don’t use free plans

14:47 – Mailchimp is a great example of a company who gained success from freemiums

15:27 – Hubspot is also an example of a business with freemium offers

16:01 – if you dedicate your business to having free plans early on, you don’t miss out on the early customers in your market

16:12 – “If you don’t do free, someone else in your market might”

17:30 – If you have examples to share regarding using freemiums or not, send an email to Steli or Hiten


3 Key Points:


Freemiums are a MUST for SaaS businesses because a free plan lets potential customers experience your platform for free.

Setting up a free plan for your business is dependent on your offer limit.

If you’re product-challenged, don’t do a freemium as it will only create problems.


Steli Efti:


Hey, everybody. This is Steli Efti.


Hiten Shah:


And this is Hiten Shah.


Steli Efti:


Today we're actually going to revisit a topic that's been one of the most popular  episodes that we've ever done, and that was the freemium discussion we had and freemium  episode. You know, I didn't realize this, Hiten, until I just looked it up, but  the freemium episode was the third episode we released. It's number three. I don't know.


Hiten Shah:


Wow.


Steli Efti:


If you had asked me I've would've said like maybe ... I knew it was  an early one, but I would've said like the 30th or 40th one or something.  I didn't realize it was the third. It's one of the most popular ones, and  one that I frequently encounter when I talk to p...

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