Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off.
You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the start, that’s on you.
It doesn’t matter if the product is “worth it” because when you piss people off, they will gladly put in effort into migrating to another provider they can trust, because that’s what it’s all about: trust.
The latest Google Apps fiasco is a great example of this, where Google eventually had to backpedal due to the massive backlash.
It’s simply a consequence of just staring at the numbers, without properly understanding the psychological effect of taking something away from what is, despite the zero income but rather in a sense of trust, a customer. It’s just a customer you failed to get any revenue out of, and that’s your fault, not the customers.
Changing pricing pisses people off. Killing features pisses people off. Bad communication pisses people off. It’s really not that hard.
At the end of the day you’re making a deal with the devil with these overly optimistic loss-leaders, because you’re getting growth you never would have gotten otherwise. Failing to capitalize on that and then blaming the users while throwing features out the window is just not good business practice.
>Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off.
I'd argue that most companies understand that perfectly well. They have a generous free tier to drive growth. Once that growth is attained and demand starts to level off, it's time to trim the resources devoted to free and force users (to greater or lesser degrees) to either start paying or go use someone else. There's great wailing and gnashing of teeth for some period of time on HN, Twitter, etc. but life moves on.
It's a pretty predictable playbook. See also Heroku of late. It should probably also come as no surprise we're seeing a number of examples of this going on at the moment.
Yup, and they think pissing people off is worth it (for their expected benefit). And... they're probably right. People have short term memories and other things to worry about.
Opportunity cost to an extent: instead of convincing them into becoming paying customers, and having them word-of-mouth promote you, they slip away to a competing service, which they may also indeed decide to pay for.
Same with Evernote. Massive ‘growth’ on the free plan. No good way to capitalize, so they just started deleting features and locking people’s content in. There is no regular export to get everything out and you need to jump through a lot of hoops. I wish I never updated that app…
Just curious (I'm using professional for a very long time, and plans page doesn't clarify), can't you just get the ENEX files per notebook and import it to something else?
It contains everything, incl. the files as far as I can see.
The file format is open, and there are many conversion tools out there.
Yes. But as someone that's been meaning to switch off of Evernote - never has a project bloated their own software with so many unasked for features / desperate attempts to grow valuation - it's a non-trivial project. One needs to have a high degree of trust in the import tool and new repository.
While it's not perfect, I like Evernote and its new incarnation. Feature parity between platforms is what saved it for me, and use almost all of the features they offer. I was getting ready to leave it for good. Nevertheless, I don't expect everyone to share the same sentiment.
On the other hand, you don't need to import anywhere at first. Just convert your files to Markdown, put the files aside and create your local knowledge base. You can import these Markdown files to somewhere new when you find the correct place, why not?
This is what keeps me at Evernote most. I can just move out in 2-3 hours, or in half day if I want.
Did they finally add exports bigger than 50 items to the new app? Last I checked, you still had to install the old one for a full export, and I don't expect it will work forever.
The help doc says there's still a 50-note limit doing it from the note list, but they did finally add a full notebook export. Maybe I'll give it another try.
I wouldn't mention 1Password. It's a cornerstone for your digital security, if you're using it. As such, I don't want it free, I want to pay for it. My current family plan suits us very well and I'm very happy. Security is hard and I want it done right. Not to say that free tools are bad and paid tools are always good, but it certainly helps.
I also do want "easy" things to be free, like a note-taking app.
I think OP is talking about how 1Password stopped letting you use the one-time-purchase version and pushed everyone to the subscription.
Personally, I was pretty frustrated at that shift because I successfully and happily used old versions until it was “time” to update (2 then 4 (which was at the upgrade cost), then one more before I was pushed to the subscription). It always worked great. Tbh I’m still frustrated that their choice to self-host the syncing service became our costs (I used Dropbox just fine and that didn’t cost them anything), but now that I’m past the sticker shock (my costs easily went up 8X) I’m more comfortable with the stability of their company and breathing room they have to build the hard technology.
Thanks for bringing it up: 1Password is a necessary example for this debate.
I, too, have fond memories of the old one-time purchase modality of software vending, but I have to admit such an arrangement is largely untenable for any software company which wishes to maintain a high quality product across multiple platforms over the long haul.
Regarding building in their own sync, I think it’s actually a good thing. Naively syncing encrypted files can’t achieve the reliability of conflict resolution that a semantically aware app-level sync can.
On a side note, I moved away from Dropbox a couple years ago as their product became bloated as they seek growth with increased desperation. That is not a trait that I want in a company I allow to install kernel extensions on my machine.
The "naive" apps, like KeePassXC/Keepass2Android do have app-level syncing of conflicting files. Granted it's more cumbersome than it would be to use a cloud service, but works very well. I end up using it more often than I'd like to.
Pretty sure 1Password was always paid? And you had to pay for different platforms. I bought it a couple of timesand paid for a couple of major updates too.
I bet it was the App Store and the Mac Store where you couldn't pay for updates that started them thinking about a subscription model.
Yeah grounds for a suit. Unless of course they don't fuck up, that's a different story, then no suit and payment will be forthcoming. Like a bank. Password managers are banks.
Subscriptions are highly fetishized by the current accounting system, because they seem more predictable basically, and plus there's a lag between no longer using a service and discountinuing the subscription, that's like four free months at the end with no support calls no use no opening the app, nothing. Not even electricity costs. For that user in those months you might as well have 0% uptime. It's cheap. Except billing because you keep getting paid! And when they leave it's generally not a chargeback, plus you can be a bitch to unsubscribe from to the narrowest extent permitted by the law, ask Google not to lead people to the answer to how to unsubscribe on the first try or SEO it, in some way, hey that's solid business plusses and minusses. Especially the plusses for the first-person, the business owner, the first-person in economics too, for whom the price and quantity axes on economics charts are switched. There's also the idea that for a business to be a business it has to be repeatable. It's a sound idea.
And there's tons of businesses that make sense as a subscription. If you want to reward a business for doing a great job, try to subscribe to it under some pretense because that revenue will go much farther in business terms to strengthen it. I've done that, I did that for Beorg. I already bought all their unlockables. Even the ones I didn't want. Tipped them (him? I think it's a one-man show) a bunch of times. Then I subscribed thinking of all the good that subscription would do for the startup, instead of eg tipping.
Then it broke and I couldn't use it, like the calendars got out of whack. Plus, it's a todo app, ie I nag myself with it. It's like an alarm clock. There's the alarm clock effect.
Alarm clock effect: no matter what song you choose for your alarm clock, Beethoven's 9th the Beatle's biggest hit ("Yesterday" I think it is), any song any any song: in a week you will hate it. If it's your alarm song you will hate it. Hatred. Somethings are beloved, this is behated. I think it takes one year of not hearing it in any context to recover from it for every single time it wakes you up early. It's all in the interest of not getting fired for 8 more hours or not getting denied from an institution. Protects against existential threat of sleeping in.
Agendas are similar. And password protectors are similar. Existential threats. But in the case of password protection, I don't want a subscription, then what happens when I can't pay? Basically lock me out of everything, either explicitly or with hexes or nags or giving me a longer and longer runaround every time, slowbanning me, that kinda shit. For password protection, it needs to be one-and-done or work for some long event horizon, like ten or twenty years.
Especially because of the intricate relationship between cryptography and torture, in the endgame. If your crypto is strong and the bad guys are still determined to get your information the only option is to torture you. Elite cryptographers talk about this all the time.
So any half-assed password manager has to be really strong in that scenario. And it was, I bought 1Password in 2008 I think and it worked great, I felt very secure despite getting hacked by amnestic interrogation, which I had no idea of for like a decade. 1Password of 2009 failed only under torture. That is the exact unique kind of next-level shit that is a legitimate situation for a password manager to fail.
1password is basically a bank. A password bank. They should act like a bank instead of acting like I don't know patreon dancer.
I think this should be outlawed. So many industries destroyed by cheap vc money, and then trying to raise prices once everyone else is gone. You can lose money doing research all you want, but the moment you start interacting with the market there should be a time limit until you can get your unit economics to work, or get out.
I agree - "free" should be anti-competitive. Today it is incredibly hard for any startup to compete with the "free" products of BigTech. And that is why in this industry, getting acquired by them is the only really viable exit option available for many startups.
There are laws against 'dumping', which is selling goods at a loss to drive out competitors, but those are fairly narrow in scope. It would be hard to enforce a more general restriction on not being profitable.
I really have no idea. Since the market values uber or a buy now pay later widget (or at least used to) at 50+ billion I'm not sure I understand much how things work. Maybe we need a reluctant philosopher king like in Plato's Republic.
Under certain circumstances, the IRS will consider your business a hobby if it fails to make a profit. The consequence being that you may no longer write off your business expenses on your taxes.
> Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off.
This is part of the game: 1) work hard to make something popular by offering a part of it for free, 2) once enough people get hooked, start tightening the terms, 3) most people will be pissed off but your profit is from those who stay (because they invested too much to just migrate away).
If those companies had a shred of integrity and respect for their customers, they would be upfront about such plans. Without a roadmap, user trust will eventually be shattered by step 2. Most people understand this shell game, and they will put up with it if they know what to expect.
Companies are not some altruistic group, and this pattern of "free to get you hooked then convert to a paying customer" is almost as old as computing itself.
What is odd here people depending on slack for search history and not creating a proper KB?
> if you promote your product through a loss leader
To be fair, I don't think Slack ever actually did this. Slack has always been pretty terrible for semi-public communities, and I don't think they did anything to promote this. Free slack has always had pretty annoying retention and storage limits, and others like limits on how many integrations you can add.
I think Slack's problem has been that reasonably (at least in the beginning before Discord got popular and copied all of Slacks features), people liked Slack from their experience at using it for work. Indeed, Slack's advantage has/had been in appealing to the hundreds/thousands of employees making something they would want to use.
I know many public communities that use slack. A major one is MacAdmins which is legendary. Some even get sponsored by them (get free access to all features). Like MacAdmins. But many don't.
The problem is that the per-user model is really crap for public communities.
Very true. Reminds me of what Seth Godin wrote on how the internet has changed people's behaviour:
> Most people, most of the time, don't buy things if there's a free substitute available. A hundred million people hear a pop song on the radio and less than 1 percent will buy a copy. Millions will walk by a painting in a museum, but very few have prints, posters or even inexpensive original art in their homes. (In the former case, the purchased music is better–quality and convenience–than the free version, in the latter, the print is merely more accessible, but the math is the same–lots of visits, not a lot of conversion).
> We don't hesitate to ask a consultant or doctor or writer for free advice, but often hesitate when it involves a payment. ("Oh, I'm not asking for consulting, I just wanted you to answer a question…") And yes, I'm told that some people cut their own hair instead of paying someone a few bucks to do it. The bet a creator makes, then, is that when she gives away something for free, it will be discovered, attract attention, spread and then, as we saw in radio in 1969, lead to some portion of the masses actually buying something. What's easy to overlook is that a leap is necessary for the last step to occur. As we've made it easier for ideas to spread digitally, we've actually amplified the gap between free and paid. It turns out that there's a huge cohort that's just not going to pay for anything if they can possibly avoid it.
> As the free-only cohort grows, people start to feel foolish when they pay for something when the free substitute is easily available and perhaps more convenient. Think about that–buying things now makes some people feel foolish. Few felt foolish buying a Creedence album in the 1970s. They felt good about it, not stupid. This new default to free means that people with something to sell are going to have to push ever harder to invent things that can't possibly have a free substitute.
> Creators don't have to like it, but free culture is here and it's getting more pervasive. The brutal economics of discovery combined with no marginal cost create a relentless path toward free, which deepens the gap. Going forward, many things that can be free, will be.
One obvious difference is that hairdressers don't run around yelling "free haircuts we will give you free haircuts look at us how we give away free haircuts".
What the companies are doing here is that they are trying to kill paid competition, hold on longer and raise prices once competitors don't exists. They really dont have a standing to complain about situation they themselves created in the hope that competition will die sooner and in the hope users will be locked too much without any chance.
> Millions will walk by a painting in a museum, but very few have prints, posters or even inexpensive original art in their homes.
Now, this analogy does not work at all, because going by the painting in the museum in no way implies you would want it at home. And that many people dont go to the museums in the first place ... and those who go are more likely to buy some serious art. The other reason it does not work is that people have tons of inexpensive art in their homes. It is ridiculously competitive market. Posters, cups bought only for their pictures, figurines, people buy all of that.
> Now, this analogy does not work at all, because going by the painting in the museum in no way implies you would want it at home.
You are talking from a buyer's perspective (the museum visitor) whereas he is talking from the seller's perspective (the museum / artist). The seller hopes that by allowing you free or cheap access to the art, you may be tempted to buy a copy of it or some memento of it (which is one of the ways museums / artists make money).
That’s not how marketing works for luxury products (such as fine art), the free/cheap access to see the art is to raise awareness so that they will be impressed by people who actually owns the art.
It increases prestige and pride of ownership for actual buyers.
He was not talking about fine arts but citing one of the business models of some museum. Museums don't sell their historical artefacts. You can't buy the Mona Lisa, but you can buy a print of it. And this is how some museums try to make extra cash.
They delayed the cutover multiple times. They gave people 3 months free. They gave people a year at 1/2 off. And finally they gave anyone who declared themselves as personal/family use only back the free option, even after having migrated to a billed option.
(And, if you’re affected by Ukraine vs. Russia, deferred indefinitely.)
> You’re trying to put the blame on the consumer here which never makes any sense from a business perspective.
Consumer:
noun
1. a person who purchases goods and services for personal use.
It is sort of weird that people don't pay for a product, yet expect to be able to use it forever? It should be obvious that companies intend to convert "users" to "customers"?
You call them "consumers" but they are not given the have not paid for the services. Maybe "users" is more appropriate?
Do let us know what products you produce, and give away for free for years and dont want to monetize, it is just a charity thing for you even thought it costs you money to offer the service.
As a user or consumer, it an unpleasant surprise that feels like a bait and switch when the free product you used now requires payment without prior warning.
At least smaller apps are upfront about the duration of the free trial, and there are no surprises (or uproar) there.
Who says they wouldn't have purchased the product? I've been hoping that Slack would provide communities like mine better plans or options to support them and access some of the improved features.
But, this move makes it pretty clear they're never going to, so I'm finally going to bite the bullet and set up Matrix.
[Just to add to this, I've had my users asking me why we're on Slack when everybody else is on Discord. (Most of us use Slack at work, so it's convenient in that sense.) I've been interacting with the company since Glitch/Tiny Speck. But, with pushback from users and from the company, at this point I just can't justify Slack for our particular use case.]
> If your loss-leading pricing strategy was unsustainable from the start, that’s on you.
Yes, exactly. Companies can't tell consumers "it's free" and then be surprised people get upset when they change the terms. Do sufficiently sophisticated people know that free plans are always at risk? Yes. But clearly a pretty small percentage of people have fully internalized that, or there would be a lot fewer companies talking up their free plans in ways that suggest they're unlimited along important dimensions like time.
That makes sense. It was a race to the bottom. Now we're at the bottom.
It's like 2001 in a lot of ways. Spesh the terrible economics of websites, or apps, or call them almost whatever they want, platforms, anything.
Giveaways bring users. Free beer people show up.
Like there's no business here. No excludability. It was a prettification of IRC, which of course nobody pays one fuck of a cent for, and now they want to charge...well guess people will go to IRC directly. And maybe there'll be an FOSS prettification.
>It was a prettification of IRC, which of course nobody pays one fuck of a cent for
It's a lot more than that. Addimg a persistent message history and multi-device identities to IRC is pretty huge, otherwise bouncers would never have existed.
And the number of paying customers shows that people are, in fact, very willing to pay for it. Slack just really sucks at b2b marketing, which is why Teams eclipsed them so quickly.
Regardless of their B2B marketing strategy, it's hard to compete with "this Slack-like thing is included with the mega-expensive Microsoft license your company already pays for every year, around which you've built a Microsoft-specific IT group".
Teams eclipsed them, because they are by Microsoft. For business people who do make these decisions, they are serious product, they integrate with office, unlike weird things like slack or discord or what have you. And it is free, so.
Well there's different market segments. Me on one market segment, I'm the guy (nice to meet you) basically the way a sow has a runt, on the off chance she can feed it, that's the same basis companies hire me. And only very fucked companies.
The basic reason is because I got tortured with an amnestic lobotomy. I had a very marketable curriculum until that point, and after that if for instance I was asked where I worked during April 2009, I would ask "are we talking about the Gregorian Calendar, that shit?"
So for me you have to provide amazing shit for me to subscribe to anything. And it can be done. Not often. I can't have 7000 apps draining me $5 a month. That is why I identified a natural limit to the number of web-app subscription-model startups there could be, the first limit was remembering all the credentials to use them, which 1Password and similar surpassed. One user here talked about having 800 web app username-password credentials on his 1Password, obviously doesn't pay any scratch for most of them. Veteran of the freemium model, like I became a veteran of the psych ward in my remarkably successful struggle under torture, including not caving to the torture.
So my segment of the market, I'm gone. Neither feature you mentioned seems...wantable. And that goes for most web apps, like I predict their business model and then operate on that basis. So for instance most VPN's are, as a business, honeypots. Like yeah you can steal from the labels who steal music from the artists, that you can do, but for tricky nitty gritty, nah. It's just too obvious, it's just too instantaneous an erection the founder gets thinking of cutting deals with Kuwaiti Intelligence during the commercial of them going on TV saying "We never have and never will cut a deal with Kuwaiti Intelligence."
So with the paying users it's like ice on land, they need the ice on the sea in order to hold them back from falling into the sea. Non-paying users provide a lot of value to Slack, in that for instance you can do a trial release on them to debug your product for the paying users. For example.
"Slack just really sucks at b2b marketing" well compared to Microsoft yes. Slack sucks at marketing compared to Microsoft, for B2B. I buy that. The guy Butterfield (Stuart? Something) was busy getting on magazine covers like it is still the previous millennium, which for businesses loses credibility.
So I went to slack.com and tried finding what they charged, they wanted me to see all their flair first. So I went to the URL which said https://slack.com/features and replaced "features" with "pricing" and there it was, the chart with the numbers they want. So they want $8.00 USD a month for their product, and assumptively propose you buy it for the year at a pro rata price of $6.67 as the default. I looked for their asterisk at the bottom of the page, but it wasn't there. No this was a javascript asterkisk, no relation to asterisks in eg legal document. So $8.00 a month, per user.
So that right there is a turn-off to an informed buyer, which B2B is. There's typically a designated person in the office for this sort of purchase and she herds the company's users through the spam, the spear-fishing, the shitty deals like this one, every everything. Apparently Teams is in fact the better product, and that might be because the terms of service aren't demonic (though I vaguely recall them yes being demonic which is why I couldn't use it, but then from the dodginess in revealing the price I divine Slack's terms are demonic too).
But whatever. In for a penny, in for a pound, sell your soul, no reason to pray. Microsoft already has telemetry on like blood type in the first 18 minutes so it's not an additional leak to work with them.
And that's saying as someone conflicted about the company, I like the way they didn't fuck up github for instance. Didn't nix it. Like they never even bought it. It works better now, in fact, I can tell it has more integrity and reliability. Backend stuff.
I think if you are on a free tier and your business depends on it, you should anticipate for changes in said free tier. If you want guarantees, you need to be a paying customer.
I agree, but what's happening here is largely not businesses behind the exodus, but loose organizations like open source communities.
You could argue that these are freeloaders and not Slack's problem, but I'd be wary about sending so many users running into the arms of their competition. Part of the appeal of Slack was that I could use one app for everything, which is increasingly not the case.
It's not trust they migrate for lmao, it's things that are "free". People are irrationally outraged when they have to pay for a product or service that was previously free.
Especially considering all of Google's products/services, people still cry about Youtube ads/having to get Youtube premium.
Most paying customers are businesses. Those businesses are definitely not going to be pleased because they have people who personally depend on Slack's free plan. So, they've probably pissed off a significant number of paying customers.
But the company was built on that user growth. They were reporting the numbers to the investors and claiming "2.???; 3. Profit" all along. Especially now, with recession coming (interests rise => expectations of profitability increase), it's unfortunately suddenly important to show real profits.
>It probably pleases the people who were paying you, because now they don't have to subsidise the people who aren't.
Bullshit. It's unclear communication and indecisiveness that pisses people off. If you can't afford it, there is no reason for you to give something for free and then later take it away. People who are paying will feel that samething will happen to them in other ways. You want consistency.
Having something for free but for a brief period of time is actually really inconvenient if you think about it. You are basically forced to move or find some alternative. You want consistency.
Because self-hosting may be easier due to an in-house sysadmin who advocated this for a long time but turned down, or a competitor offer more value with a better price.
Does Slack even care if folks not planning to pay are pissed?
My understanding is this sort of strategy wants to archive some sort of network effect so business (which actually pay for services) start adopting a product.
It's meant to kickstart recurring revenue, not to last forever.
Don't know if it is their intention, but this is probably more of a cost-cutting measure than a revenue-increasing one (or maybe even a technical one, with their data strategy/partitioning it may be much easier to do everything time-based).
Many people expect free things to stay the same forever, which obviously isn't realistic, but this is still going to have a damaging effect on their brand. As well with the free tier, there are a ton of OSS projects, community groups, etc. that will no longer be using Slack, and the network effects will drop substantially. This has been seen a bit with Discord, so maybe they are going all-in on dropping these types of customers.
There can't be _that_ many people who are on the free plan that will now be migrating to paid with this change. If anything, it now incentivizes larger groups (which would generate more revenue) to use the free plan since data is gated by time, not by usage. A slack instance with a few thousand active users on the free plan was basically unusable, 10k messages can be eaten up rather quickly. Now if you only care about the last 90 days (which honestly, isn't a bad idea with Slack to not use it as permanent storage) you can have a much larger group on the free plan.
What's wrong with Discord? Most of the projects I want to follow have Discord server, often connected with an IRC channel. I miss a few features from Slack, but in general I'm happy with Discord. It's still free from what I can see. So, what happened to make "OSS projects" etc. to stop using Discord? (Honestly asking, I don't follow Discord itself at all)
>Does Slack even care if folks not planning to pay are pissed?
I think a fair amount of their actual sales come from non-tech companies reluctantly paying for it because their developers are pushy about wanting it. Those developers want it because they were exposed to it in some context where it was free.
Lacking that pressure, those companies will just tell their developers to use something they already have...MS Teams or whatever.
The people who use Slack for their weekend DnD group are the same people who bring it into the companies they work for during the week and ultimately suggest a paid plan. That's the entire idea behind freemium: just because someone doesn't get their own credit card out doesn't mean they don't influence the person who does.
If a small opensource dev group gets pissed at slack, and those people have a say in a chat solution at their workplace (paid plans there of course), pissed people won't recommend slack but other alternatives.
Here’s what companies don’t understand: if you promote your product through a loss leader — which is arguably how Slack became popular in the first place — changing your pricing at a later date will piss people off.
You’re trying to put the blame on the consumer here which never makes any sense from a business perspective. If your loss-leading pricing strategy was unsustainable from the start, that’s on you.
It doesn’t matter if the product is “worth it” because when you piss people off, they will gladly put in effort into migrating to another provider they can trust, because that’s what it’s all about: trust.
The latest Google Apps fiasco is a great example of this, where Google eventually had to backpedal due to the massive backlash.
It’s simply a consequence of just staring at the numbers, without properly understanding the psychological effect of taking something away from what is, despite the zero income but rather in a sense of trust, a customer. It’s just a customer you failed to get any revenue out of, and that’s your fault, not the customers.
Changing pricing pisses people off. Killing features pisses people off. Bad communication pisses people off. It’s really not that hard.
At the end of the day you’re making a deal with the devil with these overly optimistic loss-leaders, because you’re getting growth you never would have gotten otherwise. Failing to capitalize on that and then blaming the users while throwing features out the window is just not good business practice.