First product I have ever charged for. I keep reading that the free tier should be generous and also that it should be limited and both sound like advice.
What I actually want to know is how people decide the number. Do you pick a limit and watch, or is there a way of thinking about it that I am missing? Mine is currently 3 projects because 3 felt like a number.
A free tier is a marketing cost with a hosting bill attached to it. So price it like one: work out what 1,000 free accounts cost you a month, right now, on your current infrastructure.
If it is $40, be generous, that is cheap advertising. If it is $400 and you make $600 in revenue, you have accidentally built a charity and you will find out at the worst time.
And put a hard ceiling per free account on whatever your expensive axis is, even a generous one. Unbounded anything free is how you end up reading a support ticket that turns out to be someone mining something.
The thing that stops conversion is usually not the size of the free tier. It is that at the moment somebody hits the limit, the paid tier is not obviously the answer to the problem they are having right now.
Which means the upgrade prompt belongs at the limit, in context, saying what specifically unlocks. Not in a settings page under Billing where nobody in the history of software has ever gone looking for inspiration.
For calibration: self-serve free to paid conversion generally lives in the low single digits. If you are somewhere between 2 and 5 percent you are in normal territory and should be optimising something else. Do not panic at 1.8% in month one, and do not celebrate 12% on a sample of 25 people.
Honestly just do a 7-day trial. Free tiers made sense when acquisition was cheap and they are mostly a support tax now.
Free tiers are a distribution strategy, not a pricing one. They are a bad idea when acquisition is already solved and an excellent idea when your problem is that nobody has heard of you, which for a first product is usually the problem. "Mostly a support tax" is a statement about your product, not about the mechanism.
You can shrink a free tier later for new signups and grandfather everyone existing, and you can grow it later for everyone at once. Both directions are survivable. So the cost of picking wrong is much lower than the cost of spending another three weeks deciding. Ship the 3 and watch where people stop.
@burr_and_edge · 5mo ago
Rule I use: the free tier should let one person solve one problem once, and it should end exactly where a second person, a second project, or a schedule shows up. Those three things are what "this is now real work" looks like, and that is the moment somebody will pay.
Limit on the axis that grows when they are getting value - projects, collaborators, history retention. Do not limit by removing features, because then free users never see what the product is and never build the habit you are trying to charge for.
3 projects is a defensible number. What matters more is whether the fourth project is a thing that happens to your users naturally or a thing that happens once a year.
Reply
Report