Wednesday, February 20, 2008

Business Software and the Freemium Business Model

As a previous post indicates, I am a fan of the freemium business model and I believe it is an customer acquisition strategy worth considering for start-ups, not just in the Web consumer services world but even for those developing business software. Yesterday, however, I had an epiphany in terms of what type of business software offerings it may -- or may not -- be suited for.

Until yesterday, I was of the mindset that the freemium business model could be applied to most business software offerings and it was a matter of coming up with the right packaging to determine which features should be offered for free and which should be offered as premium, for-pay features. I am now of a different mindset.

In the business software world, I think the freemium business model is ideal for the following use cases:
  • Offerings that are targeted at an individual and where no organizational decision making is required to decide whether to use the offering or not. LinkedIn is a good example of this.
  • Offerings that involve small workgroups and where its initial usage is not part of a business-critical workflow (i.e., its usage does not require high-level authorization within an organization). Wikis, I believe, are a good example of this type of offering. Within organizations, wikis can initially be used by small groups of people for purposes that are not business critical.
Perhaps more importantly, I think the freemium business model is NOT ideal for offerings that are a part of business-critical processes and require high-level authorization within an organization. Organizations are leery of using a "free" solution for an important function. For this type of use case, I believe the "try before you buy" approach used by companies like are more appropriate.

Friday, February 08, 2008

The Psychology of Politics

UPDATE #2: Here are some data that support my argument below.

UPDATE: Here is a post that lays out a similar argument to the one I described below.

As my last couple posts indicate (here and here), I am currently obsessed with the 2008 Presidential election. One of the elements that particularly fascinates me is the "mind games" that are played among the participants.

Recently, I have been particularly intrigued by comments made by influential Republicans that basically say they want to go head-to-head with Hillary in the general election and they don't want to go up against Obama. For example, on NPR this morning, President Bush's chief political strategist Matthew Dowd said,
The other thing that I think John McCain has going for him is if Hillary Clinton wins the nomination I know there’s a lot of conservatives out there that said they wouldn’t vote or would vote for her but I think she’s the most unifying force for John McCain out there right now, not himself.
He went on to say later in the interview,
I think if you gave the strategists and people around John McCain some truth serum and asked them to say who they want to run against, in a minute they’d say Senator Hillary Clinton. They think that she’s polarizing; she’d motivate and unite the base of the Republican Party. She’s not a generational difference and a change of a figure, she’s a bit of throwback to the past, like to a degree he is. Against Senator Obama it’s a much more difficult task. It would be a generational campaign, the new versus the older. Somebody that had a distinct stand on Iraq versus his stand on Iraq. I think Senator Obama is a much more difficult race and there is not any vitriol from the conservative and the Republican base against Senator Obama. They don’t sort of dislike him to there core like they do Hillary Clinton. I think they would much prefer, the McCain folks, race against Hillary Clinton than Barack Obama because it’s hard to compose a strategy against a new guy like Barack.
Recent polls indicate that these statements are true and McCain has a better chance against Hillary than Obama, but I am not sure what the motivating factor is here.

Earlier this morning, the cynical side of me thought they are playing a game of "reverse psychology" and they actually want to compete against Obama; maybe they have something up their sleeve about him?

But I think I just came up with the answer, in my humble opinion. They do want to compete against Hillary. By making these statements, and since McCain will most certainly be the Republican nominee, they hope to get Republican-leaning Independents to vote in the Democratic primary and vote for Hillary.

It is well known that the Hillary campaign is putting a lot of their eggs in the Ohio and Texas primaries. Coincidentally, in both Ohio and Texas, a person does not have to declare a party affiliation until they show up to their polling place and request a particular ballot. Hmm.

Friday, February 01, 2008

Radio Silence

I've been "radio silent", from a blogging perspective, over the last month. This is because I've been consumed with two things. First, I have been working hard to help my consulting client, Pathworks Software, launch their service, Helpstream, at DEMO 08 earlier this week. Second, I've also been spending a lot of time working on behalf of one of the Democratic presidential candidates (I won't say who here but you can figure it out if you look at my Facebook profile or follow my Twitter tweets). Once we get past Super Tuesday on February 5th, I hope to get back to blogging on a regular basis.