5 Goals Your Startup’s Free Trial Must Achieve
Don’t just give your product away blindly, make those trails lead to revenue
There’s a lot of misunderstanding around free trialing, the “try before you buy” approach to finding product-market fit. I’ve been running and advising dozens of startups over the past 20 years, and I’ve seen the free trial model produce tremendous results — and also crippling mistakes.
On one hand, a free trial can be an indispensable method for getting customers to accept a new paradigm that’s 180 degrees from the traditional market offering.
For example, when Netflix wanted to accelerate a paradigm shift from physical to digital media in the at-home entertainment market, a shift they were betting the company on, they offered a free 30-day streaming trial, almost any time you wanted it. Today, with the fully evolved streaming market being what it is, they don’t offer a free trial anymore, but almost every new market entrant will. They do this so you’ll change your habits.
When a free trial is targeted like that, it works well. On the other hand, a poorly-thought-out free trial can create a non-revenue generating customer tier that can become an excuse for the startup to raise or spend money on the expectations of revenue that might never materialize.
Should your company offer a free trial? And if so, how and where should you target it?
I’m running a startup that aims to change the way other startups get advice, and the model I’ve chosen is so different from the accepted paradigm that a free trial is necessary. I’ll use what I’ve learned as an example for a checklist of goals that any free trial should achieve.
Goal #1: Limit the free tier by form, not function
This is the big one, and if you only hit one goal, this needs to be it. The split between free and paid usage should never be arbitrary. The first cut of functionality you make for the free tier must still show the full potential of the paid product.
Now, here’s the most popular mistake (and I’m guilty of this, too). We product builders and entrepreneurs get so deep into the weeds of how our product does what it does that we…