Tag Archives: Business model

I was going to write our Foodie Friday Fun piece about Jacques Pepin and his insistence in cracking eggs on a flat surface until I realized that I had written it already almost three years ago.  I guess that sort of proves his point – small details are what makes good cooking.  It makes good businesspeople and managers too.  Apparently, it makes for less redundant blogs as well.

Lunch (Photo credit: munir)

Instead, let’s write about free lunches.  We’ve all heard about them and that it’s supposedly impossible to get something for nothing.  It comes from the old tradition of bars serving free food if you bought drinks.  I was reminded of this as I experienced yet another “freemium” model.  The problem is that many companies have turned freemium into bait and switch.  They’ve also made the free product pretty useless without the premium purchase.  There’s a really nice piece on three gaming companies and how they approached this balance on The Mary Sue (hat tip to my girl geek youngest daughter for pointing it out!).

In my case, I used an online golf trip service.  It’s a great idea – in fact, it was a concept my buddies and I had talked about doing ourselves to help other groups plan golf trips and score golf tournaments.  The problem is this:  the basics – organizing emails, setting up housing, and communicating with the group are free.  Another free element is setting up scorecards.  Once you actually have scores, you can input them but tournament results are part of the paid system.  So is the trip accounting.  Now if you’ve ever traveled with other folks you know that keeping track of the money and dividing it all out is a big pain.  So is scoring a golf tournament when handicaps, match play, and other side bets factor in.  The price to upgrade is per player, per round, so as the trip gets bigger or longer, the cost goes up until, as in our case, it became prohibitively expensive.  In other words, I scored the tournament manually, the accountant is figuring out the bills manually, and we won’t be back to the service since it offers us nothing we really need.

I’ve had the freemium business model discussion with many clients over the last few years.  I think it’s a good idea but I also think it the free part needs to be valuable on its own and the paid part needs to be an add-on, not an integral part of why folks would use the product in the first place.  As always, the focus needs to be on the customer and providing value, not on luring them in with a semi-broken product that only a payment fixes.  Look at Pandora or Skype – great freemium businesses. So is Valve, the game company.

There may not be any free lunch but we certainly can provide some great free snacks that whet folk’s appetites without making them angry.  You with me?