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  • Box.net “Freemuium’s” Evangelism

    Giving away your product or services isn’t as crazy as it sounds.


    Giving away your product or services isn’t as crazy as it sounds. Here are steps to get the most out of the strategy.

    Box.net‘s co-founder Aaron Levie is something of a freemium evangelist. In September, his lecture at the Web 2.0 Expo in New York—titled “6 Reasons You’d Be Crazy Not To Give Your Software Out For Free”—detailed how his company embraced the model in 2006 and saw sales spike 1,822 percent within three years.

    Despite the flashy moniker and such stunning results, the freemium formula is actually quite simple: give customers a basic product for free but charge them for extra features or services. It’s a natural progression from the age-old practices of giving away teasers, promotional material, and free trials. The idea is to spread a product to as many potential customers as possible so that some of them will come around to paying.

    Before turning to freemium, Box.net had been a paid-only software service providing file storage online. But then Levie and his partner, Dylan Smith, decided they wanted to go after a bigger market. To do so, they started delivering a free version of their service, offering 1 GB of space with an option to upgrade to a 10 or 25 GB product with added features. The results came almost immediately: “The two months after the switch were the most profitable in the company’s history,” Levie said, signing up close to 500 times the amount of new users each month.

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