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.
Ninos Youkhana 
This is an excellent article. Ive heard there are some statistics about people who buy a product do so within a week or so and that extended trials just give them enough time to forget about it. There is no urgency to purchase the product at the very point they are excited about so the vanity wears off. Ive heard some companies are going towards even shorter trial periods (day or 2).
Paying people is an interesting idea if you can avoid the spam somehow. Also with the popularity and the ease of paying people through bitcoin, I can see that being something that is easy to implement in practice.
More and more startups are migrating towards a permanent free offering and a paid offering. Then when signing up, they’ll try for the hook by giving you either 7, 15, or 30 days of the premium version then downgrading you to the basic, free version.
The trick here, however, is to ensure you add enough value to your premium model that makes it worthwhile for someone to pay for it. I personally think this is where startups are going to have the toughest time since it’s very difficult to figure out that balance of free features vs, paid features. You don’t want to make your basic offering useless, but at the same time, you don’t want to cannibalize sales of the premium offering because your basic model is “good enough”. There are many examples of this in the Heroku add-on marketplace.
il ne s’agit pas d’offrir un temps ce qui serait vendu à un autre moment. ce qui a de la valeur doit être vendu. et/mais pour se faire, il est souvent nécessaire d’offrir le gîte afin de faire payer le couvert (si google translate te traduit bien cela, j’apporte le vin au repas 😉
I really have to play “devil’s advocate” and say… A business model of free works for mavens but doesn’t work for enterprise. So I think one huge component is looking to see if your product is an enterprise solution or a one by one consumer business. Just my two sense.
Great article and very interesting because I like Pirates and I like Philosophy! Although there is validity in both strategies one must also consider giving away something for free frequently, we must be careful not to devalue our product or service as end-users will become accustomed and begin to expect more for free and will not want to spend money.
On the other hand, paying someone to use the product or service also may result in same thing however as a startup there is the issue of budget; will the money be better served paying someone or better off to spend in marketing to increase awareness and spark interest for actual purchasers.
I believe in moderation and to be strategic in the approach perhaps a little of both and depending on the product or service is how the model should be developed!
Great points @Ramona