Freemium Software

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Posted by Neville Franks
Sep 9, 2009 at 08:03 AM

This maybe off topic but I couldn’t help but post re. Alexander Deliyannis’s comment “Business model: I am a strong of the ?freemium? approach and am a paying user/subscriber of several applications following such an approach.” at http://www.outlinersoftware.com/topics/viewt/1231/0/suggestions-for-development-of-cross-platform-linux-outliner-note-taking-software For those interested in this topic and in the business of software I suggest you read “The bar for success in our industry is too low” at http://37signals.com/svn/posts/1890-the-bar-for-success-in-our-industry-is-too-low

Neville Franks, http://blog.surfulater.com

Posted by Hugh
Sep 9, 2009 at 09:04 AM

Thanks, Neville.

An interesting piece with relevance to the Linux outliner idea. If EverNote, with all its marketing fanfare, its reputed $15.5m. of investment and $79,000 a month turnover, its (relatively) new combination of features and its presence on every major platform except Linux, doesn’t expect to return a profit till 2011, what hope is there for any ambitious freemium start-up competitor?

A mentor used to quote to me: “Turnover is vanity, profits are sanity.”

Posted by Stephen Zeoli
Sep 9, 2009 at 10:48 AM

Interesting. Thanks, Neville.

I don’t actually have any insights about this, but that won’t stop me from commenting.

Jason F., the author of the referenced article, is being a little too literal, especially complaining about the title of the Times article, which was clearly meant as a hook. All start up businesses lose money at the beginning. Any that can’t afford to are going to fail right away. In fact, Jason is doing his readers a disservice suggesting that they should expect to make a profit from the start.

There are many roads to success, many definitions of successful. I worked for an entrepreneur for eight years. He used to say that there was nothing wrong with losing money. You just needed to watch the cash flow. A few years after I left the company he demonstrated this principle by running out of cash and driving the company into bankruptcy. But by then he’d made his millions and was doing just fine. (This was a fairly well known bicycle manufacturer named Cannondale, by the way, which has since been bought and is being run with a bit more sanity, and DEEPER POCKETS.)

Steve Z.

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