scott mcmullan presentation
TRANSCRIPT
Lots of customers, growing fast
2008 2009 2010
• Over 30M active users• Over 3M businesses• More than 3,000 new
businesses each day
(10M are EDU)30
Rough breakdown of the 30 Million
10 Million are free EDU
"The rest" are free Standard/Other
"Millions" are paid Premier
Focus on 3 topics
1. Why we like freemium
2. Freemium's impact on direct sales
3. Freemium's impact on channel/ecosystem, including 2 case studies
We like freemium because...
• entered mature, premium market --> help disrupt• large addressable market --> upsell math works• existing, free consumers --> product & support leverage• our apps have network effects --> lower marketing costs• students graduate --> bring expectations to work• we know ads --> additional revenue stream• broad product --> opportunity for differentiation, add-ons
Freemium: impact on direct sales
3 Sales Teams--------------------Field sales: > 3k usersTelesales: 100 - 3k usersOnline sales: 1 - 100 users
Freemium works because...• user cap on free --> limits conflict with sales teams• big diverse customer base --> more oppty to sell add-ons• self-service DNA --> pilots are easier/cheaper
A challenge• online sales team competes with free
1. Revenue layer cake
Think "use as directed for best results"
FREEMIUM:
Small biz& EDU only
http://www.flickr.com/photos/rapo/2373988909 CC-BY
Freemium: impact on ecosystem
VARs ------------20% discount to VAR
Freemium works because...• larger customer base --> more "air cover"
--> grows appetite for consulting, apps• more cloud-savvy user --> better conversion rates
A challenge• $50/user/year --> pressure on ecosystem prices
Apps Marketplace --------------------------- 20% revshare to Google
Smartsheet.com
3X better paid conversion rates than pay per click
Cloud-savvy users easier to sell/support
1. Create a revenue layer cake2. Use as directed for best results3. Helps build multiple channels
Think "You'll find new ways to use it"
1. Create a revenue layer cake (core, add-ons, ads, ecosystem)
2. Use as directed for best results (right size, right segment)
3. Helps build multiple channels (sales teams, vars, isvs)
4. You'll find new ways to use it (awareness, preferences, ecosystem)
Summary: freemium helped us scale