To Freemium, or Not to Freemium

Michele's book breaks 500 copies sold and Colleen considers whether to add a free plan.

Michele Hansen  0:01
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So Michelle, last time we spoke, you were rapidly approaching selling 500 books. So we'd love an update on the status of the book.

Michele: Drum roll, please. As of today 567 copies, 

Colleen: Wow. That's amazing. Congratulations.

Michele: I'm, I'm pretty pretty excited about. 

Colleen: Yeah. That's spectacular.

Michele: So I was thinking about this and, and talking about it with some friends because on my trip to the us last week and you know, talking to people about it and I realized like, why, why was the number 500? So big to me and I think it's because when I first started writing this, like, you know, the newsletter and everything else, I was like, okay, only the people on the newsletter are the only ones who are ever going to buy this book.

Right? Like, you know, worst case scenario, I'm writing this just to have a central place to send people when they ask me about doing customer research. And then as I sort of I don't know, admitted to myself that it was becoming a book then I was like, So only the people on this list are going to buy it.

Maybe like a quarter of them are like half, you know, that's like, it's going to sell like 5,000 copies, maybe like 200, like lifetime, like ever. But it's really only going to be people who have heard me talk about it, like, you know, who are basically doing this because I have implored them to do so, you know?

Cause I've been like, it's been really helpful for geocoding, so you should do it and they're taking my word for it. But 500 or 567, you know, that's like way more than, you know, the 30 odd newsletter readers that I interviewed as part of the writing process. That's more people than subscribed to the newsletter.

That's I guess about as many people listened to this podcast, as of right now on a, on a weekly basis, that's this way more than I thought. And that's only in the first two months And I mean, I feel like I keep quoting him so much that we really need to have him on, or just get a clip of him saying it.

But as our friend, Mike Buck B says that is stranger money. That is people who don't know me, who don't care about me, who, you know, aren't just buying the book to be nice. Because they're my friend, right? Like that's people who recommended it to other people who were bought it because somebody recommended it to them.

And that kind of feels like massive validation for like the concept of customer research to me, when, you know, I feel like there's all these stereotypes about, you know, developers not wanting to talk to people. And there's so many old school ways of doing business where people think that the only ideas come from, you know, sort of inside the building or that they're above talking to customers.

Right? Like it feels like repudiation of all of that for the concept. 

Colleen: You've definitely reached outside your one degree of separation network 

Michele: Yeah. 

Colleen: in terms of the reach the book has had.

Michele: Yeah. That's super. I don't know. I guess when you set your expectations very low, you're always going to be pleasantly surprised. So I feel like, even when I had five people subscribing to the newsletter even I was like, wow. Even my friends are tolerating me on, like, that was even a surprise.

So, so yeah. Yeah. 

Colleen: It's amazing. I don't know if you've had a chance yet to listen to the podcast with Nadia, but she talked about, she was on last week. I had her on while you were out. She did three months of customer research. So for three months. So before she built her alpha. I interviewed customers for three months. I was like, yes, that's amazing.

And she talked a lot about how that was. So she's been incredibly successful. She has 500,000 users and she talked about how that was the critical, like the critical piece to her building. Her business was taking that time out. And of course this is before your book existed, but like taking that time out to do that customer research, and she used this term called synthesis, which I loved.

So she would do. was like, she had read your book, even though your book didn't exist, she would videotape her customer interviews and then she would go back and she would said, and then I would go back and I would, I would, I think she said she would synthesize them, but basically what she meant is she would watch the whole interview over and really try to absorb and hear what they were saying.

It was really, it was fascinating. But to your point, the importance of customer research is becoming more and more evident. To all of us, especially developers who just want to build buildings and not.

Michele: I mean, I guess I want to clarify that, like, I, you know, I didn't invent any of this stuff. You know, it's been around 



Colleen: feel like, sorry to interrupt. I feel like the key is there's a hole, there's a hole in the market because we don't know how to do 

Michele: yeah. 

Colleen: mean that, that's the thing we know this is a thing we know this is important, but most of the. I don't know, literally what do you do? And I think your book meets such a need, cause it's like, literally, if you don't know what to say, say these words here are the words you can say when you get confused or lost or scared,

Michele: Yeah. Yeah. I mean, you know, it's like, there's a, there's an amazing, wonderful body of. Work on, on customer research and yes. So I always, I, I hear what you're saying. I always want to be very clear, like I did not invent this concept. And I've referenced a lot of that in the book and I'm more so I guess I'm, I'm re phrasing it and sort of, I'm reminded of a quote from GOTA that I'm going to garble, which is basically that all brilliant thoughts have already been thoughts and. Merely have to rethink them in our, our own experience and our own words. And I guess that's sort of what I have tried to do is to, to Yeah, Bring my own kind of voice and perspective to it for, for that, for that level of, of here is if you, if you truly do not know what to say, then here's what you can say. I mean rides we've went what Sean did too. Didn't he say that he did like hundreds of hours of research


Colleen: lot. I 

Michele: he launched his stuff to, 

Colleen: my head, but it was quite a lot of hours.

Michele: I wonder how you feel about hearing that, because you have said a couple of times in the past, how you wished you could just. I don't know if you wished it, but like you, you felt like you needed to like go in a cave for like three months and then just research. And I have been like, no, like do it alongside, which are already doing, like, you don't have to go quote unquote in the cave, you know, to to, to figure this out and see, but it sounds like you were her story left a really strong impression on you.

And I'm curious how that changes your. 

Colleen: so her story left a really strong impression on me because she literally is taking on Amazon as a solo FA oh, she has a co-founder now, but as a solo founder. So I think the reason Nadia story resonated was because she. Found the problem that everyone said cannot be solved and she's trying to solve it.

So to me, that's really inspiring and it was the problem everyone said can not be solved. And so on her quest to figure out how to solve it. She had to talk to so many people. I feel like my problem is a little bit smaller, which is fine. And I do think for what I'm building, which is like really just a widget when push comes to shove, you know Doing the customer research alongside the development has been good because I can iterate quickly.

And there's a certain amount of validation that comes with making money from a product

Michele: But it sounds like from Nadia, you really admire her. I guess her tenacity and her courage. 

Colleen: I literally cannot believe it. This is the most amazing thing she basically, and I think really her success, which is something we don't talk about as much. I think her success comes from, she described it like founder product fit, like she loves to read.

And for those who didn't hear the podcast, she is the founder of story graph, which is basically good reads, but a million times better, they have over half a million. Users . They've been featured in famous publications. They're basically on track to kill , good reads.

It's it's really fascinating to watch her journey. And I think the thing that inspires me so much is. This problem was just seemed like impossible. Like everyone's like, yeah, good reads kinds of sucks, but I don't know. I don't know how you would solve that. It's too hard. Right? It's too hard. And she just went for it with, and the reason she went forward is because she realized early, she loved books.

She loved the space and she just was so, so, so, so, so excited to work in this space. So she actually found like founder product fit before she found. Product market fit, which is interesting, but the founder product fit is what kept her going, you know, through the early, the first year, which sounds like it was pretty challenging.

Michele: Yeah. So as someone who loves customer research and reads a lot of books, it sounds like I should listen to this episode. you said it was on software social last week, right? And 

Colleen: totally was. You would love it.

Michele: yeah, That's I mean, yeah, I've, I've, I feel like I've heard a lot of people talk about founder market fit, which is, which is really interesting because like, when I think about that term, You know, so for, from one perspective, like it's really important that you're, you're passionate about the space that that you're solving for.

But then there's kind of a point where like being too passionate about it and knowing too much about it is almost a hindrance because people come in with a lot of biases about what the solutions should be. And I tend to think more about it, you know, being passionate about. The customer in that space and having empathy for the customer in that space, you know, and, and it's not just being passionate about the concept of books, but the reader experience of books, which is the customer of books, which are, and those are, those are two very different things. 

Colleen: right. Yep. And that's exactly, I think why she spound so much success because she was so focused on the customer, the reader of books.

Michele: I'm curious, like how you, you mentioned how you think about, you know, integrating customer research with simple file upload has customer research really come up with hammers? 

Colleen: Not yet. I need to talk to my people about this, because this is an interesting thing because Aaron has been doing so much work to kind of be out there and be visible in the layer of L space.

So, so we've had like the informal, like, this is great. We totally want this kind of messages, but I wouldn't say that we've done any in-depth customer research yet.

Michele: Yeah. I mean, that's also a case where, you know, being one of the customers is really helpful because if you, if you are like, Aaron is like, so in tune with the customers and really one of them that you're releasing things that they're really excited about because you're really excited about it. Like that can play out pretty well.

I think in many cases, that's where we come from with, with um, But, you know, to edit at a certain point, like, like how far does that get you? 

Colleen: right. So speaking of customer research, 

Michele: Always speaking of customers. 

Colleen: We're always speaking of customer research. So one of the things that has been one of the things that has been so great about simple file upload is I have zero support requests. It is apparently easily actually that easy to use because no one ever emails me.

Great. Right? No one ever emails me. So two weeks ago, We did another round of, will you talk with me emails with the Amazon gift card as incentive. And we got exactly zero responses. So people are actively using it, but again, it's only 2025. I have 2025 paid users. So I want to do something. I have a plan and I think what I should do is I should add additional pricing.

And the re the reason I think this is, if you think about how Heroku works typically. So for example, paper, paper trail, which is a law. App is really popular on Heroku. And what they do is there's a free tier, but you're limited you're log limited. So then there's like, then they have all these itty-bitty tiers, then it's like, oh, here's my $15 tier.

And then I get however much luggage storage I get, and here's my $30 tier X amount of log storage. So what, what happens to me, literally, every app, you sign up for the free tier and then you upgrade when you need it. Sentry I believe is the same way. Sentry gives you a free tier and then when you need more error reporting or logging or whatever you upgrade.

So I think I should offer a free tier and a $15 tier on Heroku.

Michele: So, I don't know if you heard my little keyboard strokes there, but I was pulling up your current page on the Heroku marketplace. And just for context, most of your customers are still coming from Heroku. Is that right? 

Colleen: It's interesting most are coming. I think the split is yeah, probably two thirds are coming from Heroku, but the interesting thing is my non Heroku customers are like more excited. 

Michele: Hm. 

Colleen: that's kind of an interesting, like there, they talk to me a little bit more, but that's a whole nother thing. We are not going to have time to talk about.

I kind of think it was a mistake to release this, not a mistake, but I released it. I did Heroku and then I released it out into the world. And I did that because I thought. My people were going to be front end developers who don't use Heroku, so they wouldn't have to deal with AWS. And that has not proven to be true.

So that's a whole different thing. So, so, and now we have to now, Michelle, I feel like I'm trying to get out of that place where I feel like I don't have enough time, but I feel like I don't have enough time because now I have to maintain two completely independent billing sets. Because Heroku is deal is totally different than how you do Stripe.

And that is a lot, every time I want to make a change, it's a huge deal. 

Okay. But that's not what I want to talk about. I want to talk about this pricing plan on 

Michele: oh, there's like so many things in there. I want to dive into, 

Colleen: right. So many things. 

Michele: Oh, hold on a minute. Let's can we, we pull this back for a second. How many hours a week are you working on this Right now 

Colleen: Right now I'm doing about one day a week, which is, you know, eight hours, maybe 

Michele: Okay. Okay. And we don't want to spend all of those eight to 10 hours dealing with billing. 

Colleen: right? That's the problem. Yeah. That was in 

Michele: And I feel, I mean like months ago, I mean, even like a year ago now we were kinda going through like, should you do free tier, should you do free trials? Should you do just pay like, w like, should you do pay as you go, should you do a monthly, like all, like, there's kind of, it's kind of mind boggling, like how many different permutations of a pricing model you could go with.

And so I'm looking at the plans right now. So you. Just as it stands right now. And this is, is, is, is it the same on Heroku as on non Heroku? Like is, the 

Colleen: it is it 

Michele: Okay. So basic is $35 a month. Pro is $80 a month and then custom is two 50 and then need a larger plan. Let our customer success team help our customer success team of Colleen. 

Colleen: I've Colleen.

Michele: And so what you're saying or. You think that does your, your hypothesis here is that if you add a free tier, then you will get more signup. That will then convert into paid plans, which means that your hypothesis of why more of the original Heroku users when you were in alpha and beta did not convert into paying users is because your free, your subscription plans were too high.

Does all of that sound correct. 

Colleen: That sounds correct.

Michele: And your basis for this hypothesis is other services that you have looked at. 

Colleen: correct. I feel like I need a free plan, like a free tier and it would be super low storage, so you can try it out. You can get, you know, do that and then maybe like a 15 or $19 tier.

Michele: So by super low storage, are you talking like one. Like basically they can 

like, oh wait, like 

Colleen: megs, like, like five 

Michele: so they can like upload like Yeah. like five files and then be like, Hey boss, lady, give me the P card so we can subscribe to this.

Colleen: Yeah. Cause I think the problem is, I mean, I know I like to do this. I don't really know if you're looking at this. You want to try it out and right now you have no way. To on Heroku. Cause there's no free trial on Heroku. Like you have no real way to try it out on Heroku. So if I did a plan that was like, like seriously, like super low storage.

So it's maybe the equivalent of five to 10 files. If you like it you'll upgrade because you'll need more storage. And then if you don't like it, you know, and you got to try it and maybe I'll get more people to talk to.

Michele: So I think that makes sense. I don't think adding another basic plan makes sense. Those feel like the workflow that you're describing. I feel like adding another basic plan. Does not help you because adding, so what you described is basically what you're trying to do is a kind of, what we do basically is selling into teams without actually you know, having to cold email them and be like, Hey, developer needs this.

They found a thing by Googling. They can try it out for free. Then they get permission to pay for it from somebody without ever talking to you. Amazing sales process. It's hours. Love it. But then adding a $15 a month plan feels like going for a customer segment that has lower usage and is more price sensitive.

And I feel like that. Th that feels like it's solving a different sales process and a different customer type that's, you know, doesn't have as high usage doesn't have as high of a propensity to.

pay. And it sounds like the customer you're going after really should not blink at $35 a month or even 50 or a hundred dollars. 

Colleen: right. Yeah, that's true. That's a good point.

Michele: I mean, you could always add the free plan and then see, are there people being like, wow, like this five files to, you know, 30 gigs, like that's a big jump. Like we, we only need 10, but right. now you're not hearing from anybody. And your problem is volume 

of, you know, you need bodies basically. So I feel like if you were to launch those two at the same time, you would be muddling your results.

And I use results sort of broadly because there's not enough volume here to really get a, you know, sort of a statistically significant result or, you know, anything out of that data. But it sounds like you need more people coming in and you need like something to see if that. 

Colleen: Yeah, but the idea behind this would be it's very similar. It's very common for Heroku and literally there's again, so many features I could build one to build. I don't know which way to focus my 

energies. I just can't stop with the features. 

Michele: can't stop. Won't stop. 

Colleen: right. If I could talk to more people like, I really I've let go.

You remember, in the beginning I wanted to resize images on demand. I don't think anyone cares about that anymore. Now. 

Michele: But you didn't add it. 

Colleen: I did not add 

Michele: Yay. You didn't 

spend time on 

something. People didn't

Colleen: People don't care about 

Michele: that's a win 

Colleen: that's a win I, my new hypothesis, however, is that people would like, some people would like the option to edit the images after they've been uploaded, like in the widget, which would be super cool.

But I, again, no one has asked for that. I 

Michele: I was just going to say, has anyone asked you this or do you just think,

it's cool? 

Colleen: I just think it's cool.

Michele: That's okay. You're allowed that. Let's just do. 

Colleen: I just 

Michele: Recognize that, but so did you say that it's like common on Heroku for people to offer a super low like testing plan basically? 

Colleen: well, I don't know if it's yeah. I mean like if you look at would people expect that? 

yeah, I think, I mean, that would be super low, but like century, paper trail, those are the two I use and. That's pretty normal to be like, oh, you have this amount, which is really not much. I should see how much they give you. Okay. So paper trail, see paper trail free $8 a month, $16 a month, $30 a month, $33 a month.

65. I mean, they have like the, the, you know, the difference is so small, but for example, Paper trail gives you the free plan is two days of search duration, which is like hardly 10, 10 megs log volume per day. The next one is seven days of search duration at $8 a month. And I think century might be the same.

So I think it's pretty common to have kind of like a staging plan. I could name it dev. I mean, it would be like named dev yeah. Centuries the same way. Only they go from free to $29 a month and you get 5,000 errors per month for free 30 days, a long history. And then if you jump up to their next tier, you get 50,000 errors per month.

So I 

Michele: Yeah, I think that would make sense, like a dev plan that's free. That's I think also naming a dev makes it very, rather than like naming it dev rather than naming it. He makes it clear that it's just for 

Colleen: Just, yeah, like this is a super small thing you have here. So yeah, I think, I think that's what I'd like. I think that would help me get more Heroku people in the door. I mean, I know it well because when it was free, I got signups like crazy. So I know it'll help me get more Heroku people and it'll be interesting to see what kind of conversion rate I get with Heroku.

Once I get that set up.

Michele: Yeah. Yeah. Yeah, that will be interesting. 


Colleen: I, God, 

Michele: oh no, you go ahead. 

Colleen: I don't have great metrics yet though, either. So I've been trying to like, get those set up too. So it just feels like there's a lot to do right now.

Michele: Did you feel good about it? 

Colleen: What do you mean? Do I feel good 

Michele: Like, I feel like last time we kind of talked about this, like you were feeling like working on. Hammer stone was taking some of the pressure off of you and you kind of had some space to explore and let simple file upload blossom a little bit on its own, sort of without the pressure of replacing your, your full-time income right away. 

Colleen: That's true, but I don't really feel like it's blossoming fast enough, like, right. Like I just can't I'm like, I don't feel like, I think so I've been pretty flat on MRR, but it's actually really good because I had a couple people that were paying me $250 a month and they have all left because I never used it.

It was weird. So the people I have now. Our higher quality customers, I think less likely to churn because they're actively using it. So I have more customers now, lower price point actively using it, which is good. 

Yeah. I guess I just feel, I mean, I know everyone feels this always, but like, I just want more time to do all the things I want to do.

Michele: You know, it's not a fun place to be in where your revenue is flat, but the fact that it's flat says something about the business that people are paying every month. It's not declining. You lost some of the, the, the big what do we call them?

The, the whale customers. Right. But. It's still, it's still coming in every month and okay. So maybe it was blooming and then the flower pedals froze a little bit and they've paused. But I think that, I think this idea for adding a dev plan is as really interesting, I'm excited to see where that goes. 

Colleen: Yeah, I am too. I think it feels good to like, be able to continue to do things, to move the product forward. And I think this is better than building new features because I 

Michele: Yes. 

Colleen: will like, this is definitely 

Michele: Seriously, like the, I mean like thinking back on like geocoding, like our big revenue jumps did not come from new features. They came from pricing 

Colleen: pricing changes. Yeah. Yeah, I I think this will be good. Cause if I can get more people to talk to me, then I can get a better sense of what is important to people 

I mean, that's really, the goal is I can't make the product better unless I talk to people. And that's what you've been saying for almost a year. What's it been like seven months, a hundred percent true.

Michele: Well, it sounds like you have your work cut out for you for this week. Yeah, it'll be interesting. Yeah. That's that, that'd be interesting to see how this goes.

Good chat. 

Colleen: Oh, 

Michele: Good chat. We'll talk to you next week.

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