Tag Archives: product management

Moving from Free to Paid: 3 things that you cannot afford to mess

Often consumer online products need a critical mass of users to even know if the product is indeed 6280507539_f32a72be10_qworking 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.

 

Photo credit: https://www.flickr.com/people/68751915@N05/

Solving the puzzle – “water proof umbrella”

In my previous post, “Case Study: The Waterproof Umbrella” I wrote about “Out of Context engineers”. Engineers who are working on product or on feature but are not sure about its usage or need. While the earlier post was focused more on challenges, this time it is more about what a product manager should do to help engineers gain contextual knowledge.

There are ways by which you as a product owner can make the out-of-context engineers have a better understanding about product.

Detail requirements along with context : Charity begins at home, so why not start with little extra effort to help engineers understand something more about the product needs. When you write requirement definition or user stories, do ensure to include sections like “feature purpose”, “problem definition”,  “Expectation (from feature on implementation)”. A typical ‘User Story’ with ‘uses cases’ is not good enough for many engineers to understand the context or need, it rather just focuses on solution space and has bare minimal focus on problem definition or customer voice. Including suggested section along with accurate data helps engineers to connect problem definition with use cases and in-turn helps in designing an effective and elegant solution.

Customer experience : It is highly recommended that engineers who mostly have cubicle working habits should be taken out to meet customers, partners and field staff. When you go out to meet customers for a presentation or for a follow-up meeting, take one of these champs along with you. Let them have customer exposure, understand the expectation from horse’s mouth and feel the context. What is being suggested here is not something new but is definitely something which is not practiced so popularly; successful product companies like Intuit does practice this which is termed as “Follow Me Home”. You will also find a reference of this in “Lean Start-up” by Eric Ries. What this does is that it brings in a lot of contextual information to engineers, helps them understand that the customer focus is more on solving a problem and not necessary developing a feature as mostly perceived by engineers.

On many occasions, there are business or legal constraints due to which it is not possible to take an engineer along with you. For such scenarios, ensure that you share experience from customer meeting with the team and help team come to same level of understanding as you are.

Market updates : Send out updates in form of write-ups, ppts or even as a small talk once in a while to engineering team on what’s happening in market place, what is competition doing, newer announcements by government or by compliance agencies which could probably impact a feature or aspect of your product design. You chose the frequency, but ensure do not over-do or be so rare that engineers lose interest in such updates. This is an attempt to keep engineers connected with market place and also help them understand the business aspects of the product. They will sooner or later appreciate such information and also its implication on feature design or product road-map.

It is always advisable to have someone in the team who can challenge your understanding, only to help develop a better product and a better professional out of you. I take this as part of product manager’s responsibility to keep his team connected with the market and in turn with customer. Spend some extra time to detail out things that you might not have been doing, spend some time educating your team to ramp-up their understanding about business and problem you are trying to solve.

@mathurabhay