06 Mar 2012

Freemium - when the number doesn't matter

Once upon some long months ago, I uploaded 2 apps, Cue and moCloud to Nokia's Ovi. Cue is a location (cell ids and not gps) reminder application. You simply tag your locations and set reminders based on these tags. MoCloud on the other hand is an unofficial javaMe client for CloudApp. These apps are paid (2€) but they have free versions with less features. For example, on MoCloud free, you can't upload but can only manage uploads and on Cue free you can't have more than 20 location tags. It's a freemium model - get people to try/use and buy if they are convinced or enjoy it.

So I published and faced other things. I didn't even promote the apps. No bragging rights, ads and all that. (By the way, If you are an app publisher, or in fact you are a creator/developer of any kind, this is a bad thing to do. Promote, brag and do all that. Or get someone to do it for you. It's not just enough to DO alone. Let people KNOW).

Fast forward to now. I'm having to submit Twhii to the app store. The Nokia publisher site redesign drew me to notice the reports of both other apps so I decided to take a closer look. For the free versions, moCloud has about 4 times Cue's download. For the paid, Cue has sales, moCloud doesn't.

I have seen a lot of web startups brag about the number of visits, active users on the platform. The question however is how many of this visit is converted to pay (directly or indirectly)? Many startups build their business model with the big market as target. To them, it's about the numbers. "With a million users, if we can get 50,000 to pay, we are good". (Some don't even have monetization plans. Well, let's ignore those for now). It's however more complex than that. It is not about the number of total users. A big market may not be what you need. The truth is you may have a very small userbase that pay well and you are okay. Full premium startups (pinboard for example) are even gaining ground these days. Numbers can be decieving. How useful they are to you is what counts.

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My name is Opeyemi Obembe. I build things for web and mobile. You should follow me on Twitter (@kehers).