April’s Freemium SF Bay Area Meetup at Elance marked our Meetup’s first anniversary. Our moderator, Cynthia Typaldos of Kachingle, introduced speakers from Elance, engajer and Open Garden to nearly one hundred attendees. Freemium is still the rage, but discussion extends to other monetization strategies, pricing issues and business models. “How is anyone going to get somebody to pay?” is the central question. We seek the answers to this question and will follow them wherever they lead.
This month our three speakers have greatly different products and use different marketing strategies to sell their products. Read below a little of what they had to say.
Cory Langner, Sr. Business Development Associate,
Elance is a cloud-based employment platform that revolutionizes how work gets done. Cory noted that 30% of the workforce is made up of contingent workers (ed. It was just over 4% in 1999). Elance provides opportunities for small businesses to find part-time workers who are willing to take small jobs. Elance is free to post jobs. Freelancers bid on the jobs and build reputations. No money is paid out until after the job poster approves the work. Cory says this makes a great check and balance system that guarantees that everyone does what is expected. Elance compiles the performance data, distributes monies and does the paperwork including filing 1090 tax forms.
Sizes of hiring businesses and sizes of jobs can vary, but small businesses, especially startups, can benefit from workers competing for jobs from around the world. Cory gave the example of app vendor Echoer, whose CEO Daniel Cowen has a geographically dispersed talent pool of 20 freelancers that can be engaged on demand. Not only is there a vast labor force but American businesses can realize savings from lower prevailing wages paid elsewhere in the world. Elance has 2.3M freelancers, 500,000 hiring companies and 100,000 job postings in the last 30 days. Lifetime freelancer earnings are almost $750M. Elance takes a service fee of 8.75% when work is delivered and payment made. It is free for both hiring company and freelancer to sign up. For fixed price jobs, Elance has an escrow pool. Freelancers get paid from the pool when they meet milestones.
Michael is the founder and CEO of engajer, an online video platform that allows presenters to make 30-second (or less) videos that conclude with offerings of follow-up videos. They are useful for training, sales presentations and marketing pitches. Viewers select video snippets and navigate through the follow-up videos.
Michael says presenting short videos in a stream maintains customers’ interests and is efficient. This works for presenters too because valuable customer information is in the choices customers make.
Because of different objectives, presenters have different pricing considerations. Marketers tend to like fixed price contracts, sales people like to pay per seat. engajer is valuable in making customer sales, as a marketing tool and for training. This greatly affects which capabilities presenters heavily use.
Michael has tried four different pricing strategies with four different usage components. He discussed and reviewed them with us. Then he analyzed them, and in order, he then dismissed them as; “Not Scalable,” “Too Limiting,” “Too Complex,” and “Too Crazy.” Michael learned to keep pricing simple and to not fear change. “You must get out there and sell,” he says, “and take input from your customers.” “They will help you figure out your pricing.” And engajer does have a Freemium model, but only gives a small amount away for free. Premium features like reporting and analytics have a monthly fee. If you can shoot your own videos and build your own packages, engajer is free. If you are selling something through engajer’s ecommerce module, then engajer takes a percentage of the transaction price. Heftier packages are available for clients that want custom features from one of engajer’s partners.
“Share all of your devices on one network,” says Micha, Co-Founder & CEO of Open Garden. Open Garden allows you to share connections on a free wireless mesh network. Devices find their best 3G/4G connections and share them with other network devices. Micha gave an impressive real-live demonstration of how much faster internet connections are using Open Garden. Several devices can team up to speed downloads. Networking uses Bluetooth and Wi-Fi Direct, so devices can be up to twenty to thirty meters apart. Each device also can act as a relay and extend the network. It is only free now but in the future there will be a premium subscription version that will allow more control over Wi-Fi and be even faster.
The Freemium SF Bay Area Meetup is all about monetization and the Freemium model in SaaS, web, and mobile apps. It is the place where industry leaders share insider views. All who want to know more can attend. Come and join us. We meet on the second Thursday of each month. Visit our Meetup Blog, Freemium as a Business Model, where you can read more about us and our previous speakers. We also provide video recordings of past Meetups to watch.