Often consumer online products need a critical mass of users to even know if the product is indeed working and adds value to the users. Most products start by offering the product/service free to attain critical mass and also get actively engaged users. No sooner does it gather enough engaged users, the juggernaut of “monetization” is on its way and the only model that might be feasible is the user-paid model. Most products usually have a well-thought road-map on how long the free model must continue and how to start some positive cash flow. When you move to a paid model, you could mess up totally by doing these:
- Convolute the user experience: This strategy only spells doom for the product. Alternatively, look at features you can carve out for paid users; the user experience of the product as a whole should be left in-tact. Sometimes it so happens that the whole set of existing features forms the perfect user experience and removal of any feature cripples the product so much so that it becomes useless. In such cases, the challenge would be to create new feature set – which are enticing enough for a segment of users to pay or create a limited time period for usage of the free product.
- Delay moving away from free: The conversion percentage from paid to free is usually a small fraction; running free version for a long period increases the cost of acquisition of paid users.
- Asking for “long-term” commitment: Users moving from free to paid should have a smooth “on-boarding” experience. Mandatory long period sign-ups (even if there is opt-out facility) causes high drop-out rates among users.
You build your user base with a lot of effort – let it not wither away when you need them the most.
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A few years back, a senior engineering manager kept a stern face and told me “The developers will be idle from next month as you seem to have no more user stories lined-up for them. I will withdraw them from your product and they will not be available when you need them”. I looked at him flabbergasted. When on earth was Product Manager’s job to create work for developers? A Product Manager’s job is to run the product’s business in a profitable manner; in the process if there is work for developers or sales or support – that is only a consequence of it. I have seen Product Managers succumbing to such statements by:
- Developing features which have low business value – thereby creating a monster which needs to be supported for years to come
- Developing supplementary services which do not align with the overall vision of the company
While such a statement to start with was myopic, so are some of the reactions. During “lean” periods there are productive ways to make the best use of the time:
- Solve technical debts. There may not be any immediate business value, but in the due course this will pay off by lesser maintenance cost and faster implementation of new features. Again, identification of the right “technical debt” to solve is a challenging task which the product manager must engage the Architect and other senior technical specialists of the product.
- Take your developers to the customers: Some organizations have institutionalized customer visits by all members of the team, while some restrict it to the product managers and sales. This is a great time to take the development folks to meet customers in a “no agenda” fashion to know how they use the product and elicit “pain points”. These visits give a great insight into the customer, which usually results in greater sense of commitment and involvement for the participants, having known what their creation does to lives of people.
Use lean periods wisely.