Sub Club Podcast: Should You Ditch Freemium for a Free Trial Model?

0:02But we basically switched from a freemium model to a free trial model to simplify things. Because freemium, in my opinion, in a direct to consumer business, is probably the most complicated monetization strategy you can have. And we gotta be really clear thesis statement, really clear metrics, really know where to draw these lines, right?

0:23Otherwise, no pun intended for a video television company, draw the lines. Father, dad joke, right? So, but it hadn't, that freemium strategy had been really, I think, deployed more defensively to like keep the pros happy, if you will. And still today, the pros, students, athletes can join the platform. We're never going to disrupt with a paywall, the interaction between the two.

0:45It's just like a touchstone third rail. You're never going to change that. It's a fundamental tenant of our business, if you will. But we did rethink that freemium business model. Because the thesis statement, I think, was fairly weak, to be blunt. Because it wasn't, again, it was like an add on line of business, right?

1:01It was not the main event. So it didn't get That level of thinking when something's opportunistic, you attack it and you take the money that's there. Right. But that's very different than being methodical and thinking about it from scratch. I want to interject because I think a lot of apps can relate and maybe I need to help point this out, but so many apps, if they're four or five, six years

1:21old, they don't have as much kind of. Business strategy debt as you went sports did, but they probably have more than they realize. There's features that they give away for free in their freemium strategy that maybe are higher value that they should be putting behind a paywall. There's ways they do things that haven't been rethought in years. And to your point earlier, things have changed so much consumer willingness

1:48to pay via subscription has changed. Onboarding patterns have changed, even like willingness to pay higher prices are surprisingly doing better and better. If you can deliver the value, consumers are more willing to pay higher prices for software these days than I ever thought consumers would be willing to pay for. So I think. This is how, if you're listening in and you're like, what is this?

2:09Like all that have to do with my business. I think this is the meat of it is that if you've been around and your business has plateaued at all, or even if you've just been around a bit and are still growing, but want to grow faster, like taking a minute to reevaluate some of these like core aspects of the business can produce incredible fruit.

2:29So then what was your process? Like, how did you gather data? Talk to users. What did it look like to. Figure out where those opportunities were to shift the business strategy. I think one of the things that our team is most proud of is it feels like we've been in the last four years, like 15 different companies completely disorients our board, which is a whole different masterclass that someone needs to give me, but I view

2:52that as a sign of progress and success. So there's lots of times. We actually come back to something that we may have done previously and someone says, well, we already tried that. And I go, whoa, but that was 18 months ago. And think about all the things we've learned. Let's go back to. So I'm a big fan of why are you where you are?

3:08Can you go back and critically evaluate that? And are those still true? Sometimes they might just be truisms, right? And you might just say, check, check, check. For instance, for us, we're never going to make the student pay to interact with their instructor. We're just not going to do it. We go back every once I'll say, well, we could. And we go, no, but that violates our core value, you know, and these people have a long relationship with us, we're not on the pro side, right,

3:31we're not going to disrupt that. Okay, great, that one hasn't moved, but what about these other things? So, first for us was, just go back to the beginning, and so, free trial is just simpler, right? We couldn't reconstruct the thesis statement behind the freemium strategy. So we said, we need to make things simpler, and like, get back to the basics. And by the way, if you switch from free trial, or from freemium

3:54to free trial, you're just going to make more money doing it. You might burn users, different story, but we can talk about that, and bad reviews, whatever. So there are costs, right? So that was, I want to say, I use the word easy a lot when I think I mean simple. That was simple, it was A or B, you gotta choose a door, pick one, right?

4:09But we decided basically to retreat to move forward. Meaning there's a lot of assumptions that are stacked here, and we don't really know how many of these are true. Where's a simple place to start to explain the universe that we're living in? And then proceed from there and try to meticulously, brick by brick, right, lay

4:25these down so we have a solid foundation. And again, because we had such high turnover, a feature and a bug in some ways, and so institutional knowledge got eroded to some extent. It was easier to do that, because there weren't a lot of sacred cows to us. But also harder because there was fear around, well, what

4:39are we disrupting, right? Because we didn't have that full knowledge. So that was a start, at least. Simplifying things, so we could list the four or five assumptions that we thought we were operating based on, and then building off of those.