Why free business software is bad. Based on disabling free Google Apps subscriptions
This is a translation of an article from ReadWrite.com by Mike McDerment - founder and CEO of FreshBooks . Read it on Twitter @MikeMcDerment
At the end of last year, Google Apps turned off the registration of free accounts. You must have been upset and thought that for small business owners this is a real tragedy. After all, free is always good, right?
')
No not like this.
For some, perhaps this is a big secret, but the free nature of any product is two sides of the same coin. And if the advantages of the word “free” are transparent to everyone, then for some reason no one wants to take the “dark side” into account. Especially if we are talking about small business.
So let's go over the shortcomings of the free service.
If we do not pay for the product or service with the contents of our wallet, then it seems to us that they are free. The trick is that we still give something for their use. Is always. If we are talking about online services, the first thing that comes to mind is your personal data or, for example, the content you create. I say hello to Facebook and Instagram: their privacy policy is a great example of blurring the lines between what belongs to you and what belongs to service owners. Probably, such nuances are of little concern to end users, but such tricks will not work with company owners.
Free service will never be able to provide you with good technical support. In any case, one that would suit you;) Have you ever tried to contact technical support for any free software? Now imagine that you need to entrust your business to them. Fearfully?
They come and go pretty quickly - a routine. Rule.fm , Freedcamp , Teamlab , DotProject - the list can be continued for a very long time. You can see what happened to them: someone continued to exist as a free tool, and someone came to the need for proper monetization. And survived.
The explanation lies on the surface. The requirements in the business application market are much higher than what free programs can provide. There is no reason to doubt how well Google knows this market.
In the era of DotCom, companies were afraid to create something potentially interesting Microsoft. Venture capitalists covered hundreds of start-ups before the official launch with a single phrase: “What if something like that will be released tomorrow by Microsoft?”
Today, a terrible beast to most novice startups seems, of course, Google. In the eyes of beginning IT entrepreneurs, this is an all-consuming monster that unwittingly has to be taken into account when making decisions. Do you create business software? Is it better than Google Apps? Cool! And how are you going to compete in cost? Stop stop stop, they are free ...
Because of such conclusions, the market becomes very unattractive for most players. IT companies were not in a hurry to invest big money in innovative solutions for small businesses and generally develop in this direction. What is the point if today or tomorrow, Google rolls out another free solution that will initially be hundreds of times more popular than yours?
However, Google itself at a certain point probably realized that supplying a business solution and being unable to provide quality support is the wrong approach. By the way, now Google Apps users get operational assistance 24/7.
Of course, Google Apps can come back for free at any second, but what they did is a good signal. They began to take money for their services.
Their pricing model will allow new players to boldly enter the small business services market with their own innovative ideas. The ideas that are (most important!) Will not be free, but are available at a cost just like Google Apps, remaining acceptable even to small businesses. ($ 50 per year per user)
Perhaps the most important thing to take out of all these reflections is that the dark side simply loses its essence when paid for with money, not personal information or content. From the moment of payment, the relationship between the supplier and the buyer goes from a level of trust to a level of guarantees. For business it is important, agree.
Paying Google Apps is a very good event in the first place because it finally marks the beginning of healthy competition, stimulates innovation and provides the right to choose players in the small business market.
At the end of last year, Google Apps turned off the registration of free accounts. You must have been upset and thought that for small business owners this is a real tragedy. After all, free is always good, right?
')
No not like this.
For some, perhaps this is a big secret, but the free nature of any product is two sides of the same coin. And if the advantages of the word “free” are transparent to everyone, then for some reason no one wants to take the “dark side” into account. Especially if we are talking about small business.
So let's go over the shortcomings of the free service.
Free cheese
If we do not pay for the product or service with the contents of our wallet, then it seems to us that they are free. The trick is that we still give something for their use. Is always. If we are talking about online services, the first thing that comes to mind is your personal data or, for example, the content you create. I say hello to Facebook and Instagram: their privacy policy is a great example of blurring the lines between what belongs to you and what belongs to service owners. Probably, such nuances are of little concern to end users, but such tricks will not work with company owners.
No money - no service
Free service will never be able to provide you with good technical support. In any case, one that would suit you;) Have you ever tried to contact technical support for any free software? Now imagine that you need to entrust your business to them. Fearfully?
Free services for small businesses do not last long
They come and go pretty quickly - a routine. Rule.fm , Freedcamp , Teamlab , DotProject - the list can be continued for a very long time. You can see what happened to them: someone continued to exist as a free tool, and someone came to the need for proper monetization. And survived.
The explanation lies on the surface. The requirements in the business application market are much higher than what free programs can provide. There is no reason to doubt how well Google knows this market.
Why servicing a small business is so difficult
- According to Census bureau, in the USA there are 30 million enterprises falling under the category of “small business”. Infinite potential! Win - I do not want. Not so simple, unfortunately.
- 30 million is less than 1/10 of the US population (which is about 311 million). If you decide, say, to reach small business owners through mass advertising, then your target audience is <1 person out of 10. This means that you will have to make a lot of effort to achieve the desired result.
- Even worse, unlike large enterprises, small business owners are very difficult to find. In the literal sense. With the increase in the number of remote workers, many of the so-called “small businesses” do not have the official “front door”, which means it will be much more expensive to find them and bring the desired information.
- Finally, even if you find them, be prepared for the fact that small business owners are very demanding. These guys are usually very busy with their business and are waiting for good work from the tools they use.
- And of course, you should understand one important feature that distinguishes large companies from small businesses. The latter are much more likely to leave the market right tomorrow.
It’s good to know how gratuitously stifles competition or why it is paid.
In the era of DotCom, companies were afraid to create something potentially interesting Microsoft. Venture capitalists covered hundreds of start-ups before the official launch with a single phrase: “What if something like that will be released tomorrow by Microsoft?”
Today, a terrible beast to most novice startups seems, of course, Google. In the eyes of beginning IT entrepreneurs, this is an all-consuming monster that unwittingly has to be taken into account when making decisions. Do you create business software? Is it better than Google Apps? Cool! And how are you going to compete in cost? Stop stop stop, they are free ...
Because of such conclusions, the market becomes very unattractive for most players. IT companies were not in a hurry to invest big money in innovative solutions for small businesses and generally develop in this direction. What is the point if today or tomorrow, Google rolls out another free solution that will initially be hundreds of times more popular than yours?
However, Google itself at a certain point probably realized that supplying a business solution and being unable to provide quality support is the wrong approach. By the way, now Google Apps users get operational assistance 24/7.
Of course, Google Apps can come back for free at any second, but what they did is a good signal. They began to take money for their services.
Their pricing model will allow new players to boldly enter the small business services market with their own innovative ideas. The ideas that are (most important!) Will not be free, but are available at a cost just like Google Apps, remaining acceptable even to small businesses. ($ 50 per year per user)
Summary
Perhaps the most important thing to take out of all these reflections is that the dark side simply loses its essence when paid for with money, not personal information or content. From the moment of payment, the relationship between the supplier and the buyer goes from a level of trust to a level of guarantees. For business it is important, agree.
Paying Google Apps is a very good event in the first place because it finally marks the beginning of healthy competition, stimulates innovation and provides the right to choose players in the small business market.
Source: https://habr.com/ru/post/167471/
All Articles