What are some uncommon methods for startups to use in order to penetrate the market?
In the market, the number of choices is approaching infinity, an exaggeration of market saturation pointed out by Seth Godin in his book “The Dip”.
A few days ago, I received an email from a new startup called Striking.ly. The mail title was: “Striking.ly Pro Goes Free” Striking.ly is offering 14 days Free Trials of Pro: version. This has been the traditional strategy of an old business model called “Freemium”, a business model used to offer a free version and a paid version. “Freemium”, a term created by Jarid Lukin, was inspired by venture capitalist Fred Wilson, who proposed the marketing strategy in a 2006 blog post.
The 14 Day Free Pro version of Striking.ly and also the 30 day trial offer of Netflix got me thinking. The thinking part was caused by an activated old neuron in my brain, which very rarely happens to me, and it took me back to 1998’s famous article “The Bill & Warren Show” by Brent Schlender of Fortune Magazine. In the article, Bill Gates discussed the following concerning piracy of Microsoft products in China:
Although about three million computers get sold every year in China, people don’t pay for the software. Someday they will, though. And as long as they’re going to steal it, we want them to steal ours. They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.
Gates’ main point was free, pirated versions of Microsoft products will lead to dependency, and that Microsoft will take advantage of that dependency to generate revenue at some point in the future. The dependency is further reinforced by the unique files and data generated by Microsoft products. Hence, I want to share my thought on this: I believe maybe it is time for startups to allow more time for trial or free use of the full/pro version of their products and move beyond the 14 or 30 day periods to longer periods such as two to four months. This will allow for greater time to build dependency on the product and make it more likely for users to purchase the product when the trial period is over.
But with so many free programs available; ranging from free apps, to 14 day free trials, to 30 days of free movies, to free cars, to free health care software, maybe it is time for another new approach. The great philosopher Socrates used to pay people money to listen to him lecture. Taking a note from his page, startup companies looking to penetrate the market should consider paying new users money to try their product. In a world free programs and services, paying people to try use your product is a unique way of differentiating yourself from the competition and enticing new customers.
These just some thoughts I had. I would really appreciate it if you could offer your own insights on these two strategies. Pros/cons, risks vs. rewards, etc. Any comment is greatly appreciated.