Startup Lessons Learned: Business Freemium Model

Here at Dasheroo, we embraced a business freemium model to help drive the growth of our business. That means instead of relying on advertising on Google Adwords or other venues, we offer a tier of service for free. The premise is that freemium will drive risk-free adoption that will in turn generate awareness and positive word of mouth, or viral growth, without advertising.

It’s a big bet. There’s lots of success stories (Slack, Mailchimp, Box, Evernote) but also some folks in our space who have switched from freemium to a standard free trial model (Sumall). Many of the switchers to free trial are mainly focused on the Enterprise,  and as opposed to consumer freemium, business freemium typically takes longer to catch on. So how’s it working for Dasheroo in the early stages? Well, let’s look at this nifty Google Sheets dashboard:

business freemium growth

Early on, we were a very ‘hit driven’ business. We were very dependent on getting influencers to talk about us, and link to us, and we did a ton of 1:1 outreach. We were fortunate to get superstars like like Eve Mayer the LinkedIn Queen to talk about us on social media,  and MatthewToren to write a great article about us on Entrepreneur. You can see the spike we got in October from that.

But these days we find ourselves simply growing more organically. We send an email to every new user asking them how they heard about us and why they like us and and we get about aa 20% response rate. From their answers we get an increasing number of people telling us they heard about us from a colleague or at a conference. All of this thanks to what we hope is a great product and user experience.

So, the big question: does business freemium replace salespeople? Nope. But about 10% (and growing) of our new users are large companies that feed our higher-value deals via our sales team. Just a few months ago, that percentage was less than 3%!

So, is business freemium is working for us? We think so at least at this early stage!

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