Justin Vincent

Why You Should NOT Charge for Your Webapp From Day One

Cargo Cult

When I launched my webapp Pluggio last year there was a cargo-cult meme doing the rounds…

“You should charge From Day 1”

…that meme is still doing the rounds today (Jan 2011).

If you’re about to launch your web app let me tell you don’t do that!

Lucky Mistake

I made the lucky mistake with Pluggio of not charging from day one. Not because I didn’t want to – but because I didn’t have the payment stuff setup and I was too lazy to do it before launch.

Lucky for me, instead, I made it very easy to signup for free and explained that I would be charging in a few months, but for now it’s 100% free. So signup! Play while you can! Get value out of it! (before it costs anything).

Free Testers & Focus Group

As a result a lot more people signed up because they felt like they were getting a deal.

This approach enabled me to have 200-300 users a day for the first few months using the software. I didn’t realize at the time but that was an awesome advantage. People were reporting bugs and making suggestions via Get Satisfaction left right and center. (Make sure to put your Get Satisfaction link at the top of every page)

So, for two months, I worked like crazy fixing all the bugs and adding as many features as I could for those free users. Because it was free people were very forgiving and supportive of the work I was doing.

Then after two months of free – I turned the site paid.

Note: I gave all testers one year free paid account as a thank you.

Better Product. More Money.

Due to having so many people testing it out, the site was massively better than it could have been if I had a pay-wall from at the beginning. Subsequently Pluggio retention rates of paid users are thorugh the roof – with the average paid user sticking around for six to nine months.

In my opinion, you won’t make real money on your product until it’s rounded out and bug free.

By opening the flood gates for the first two months of existence, keeping it free, making it super easy for people to report bugs – you will get a rounded out bug free product, wayyyy  faster than if you had any kind of pay-wall.

End result. Better product. Happier users. More money.

Plans & Pricing Page? No way!

I would especially suggest not having any kind of Plans & Pricing page that committed to price points or plan limits. Yes have a plans and pricing page, but just say “coming in a few months, for now everything is 100% free”. If you put any kind of real plans and pricing it hurts you because it makes it way more likely for people not to test your product.

This turned out to be hugely helpful for me with Pluggio because then I could review the stats and see exactly how to create my small, medium & large plans. I could define triggers for each plan  based on what people were actually doing rather than just guessing.

Disclaimer: As always there is no one truth, so if you have any counter (or supporting) examples please feel free to comment below.