One of the cool guys at 37signals once said something like “if you can’t use your free stuff to point customers to the paid stuff, then what you’re doing is pointless.” (this is an obvious paraphrase). The problem with making money with your app is that now everyone expects and feels entitled to getting everything for free. This isn’t as hard if your site, app or blog started off with a paid model, but if you were free from the start and decided years down the road to monetize…well it’s tough to say the least.

I bring this up, not just because Twitter decided to start monetizing and selling ads, but because I’ve been working on a way to monetize codesnipp.it. I’ve listened to a lot of podcasts from app developers, read books by them and have studied several websites that are monetized. What I’ve come to realize, is that several well known apps use the “Freemium” model of business, and this is something we’ve been looking into for codesnipp.it

What is Freemium?

Freemium means the basic service of something is free, but you pay a fee if you want something more. Some of the sites I’ve seen use this model are:

  • Nettuts
  • Pandora
  • Dropbox
  • Freshbooks
  • Most iphone apps
  • WordPress.com
  • Flickr
  • Vimeo

Freemium is great because it allows everyone to use the service for free, and most people will stay using the free version. However, for those who want something a bit more, whether in terms of ad-free, more space or more features, they pay for it. It seems that this model works really well and also has a pretty good reception by most people who figure they’d be willing to pay for a service if they need more.

Why pay anything? Can’t I have it for free?

Web users don’t want to pay for anything these days, thanks to the popularity of social media sites like Twitter. But this is seriously unrealistic. If  a business doesn’t have a way to make money, they aren’t a business. Similarily, even for someone like me who just wants to put out a great app for developers to use, there’s still several things most people don’t think of:

  • Who pays for the designer?
  • Who pays for development?
  • Who pays for hosting, especially if the app kicks off and needs thousands of dollars a month in hosting fees?

The ungratefuls

Unfortunately, there are people out there who don’t care if you have to shell out tons of money out of your pocket for them. They expect it. Yesterday, Paul Boag, from Boagworld, posted an insanely rude email he got from a “listener” who did nothing but criticize the audio quality of ONE post, in which Paul warned us from the beginning that it wasn’t the best. Here’s an excerpt from the guy’s email:

I cant beleive after 206 episodes you still havent sorted the audio out.

I will be forced to seek a new podcast if you cant fix these issues.

Why don t you just pay someone to adjust the levels, an audio engineering student maybe.

How much ruder can you get? Here Paul and the other Boagworld contributors take time out of their day to bring us a free product. What people don’t realize is that there’s always more work into a product than what you see. I bet it takes some serious time to edit those podcasts and some serious money to buy the equipment they use. Yet here’s a great example of someone who expects to have a perfect product for the perfect price of free.

Not everyone will agree

Not everyone will agree with you charging a price for your product, but then again they’re not the ones building it. You may lose some customers or users, but you’ll gain a lot more. Charging for your app allows you to make the app better, as you’re able to justify the time and costs associated with creating and maintaining more feature, better hosting, and great designers and coders.

What about ads?

I’ve also decided to add 1 ad spot on the sidebar of codesnipp.it, to allow for one 125×125 ad that will randomly rotate on reload. Originally, this was all I was going to do to monetize codesnipp.it, but I quickly realized, like with my own blog,  the ads wouldn’t be enough to support the weight of the site.

I want codesnipp.it to be a free community project, but I honestly don’t have the money to support hosting, domain and dev costs, so I need enough to pay for that. I also didn’t want the ads to be annoying like Facebook, Google Ads or probably what Twitter will look like as well, so one ad on the sidebar is all it will have.

What are your thoughts on “freemium” sites?

photo by David Masters

Amber Weinberg

Amber is a freelance front-end developer specializing in semantic and accessible custom WordPress themes. She works with agencies and other freelancers to bring their designs to life using custom ACF flexible layout builds - making them more performant and less buggy while allowing the client easy customization without breaking the design system.