A story about how a Seattle entrepreneur navigated Covid-19
I write about inspiring business strategies and tactics that drive growth. I used to believe that a sound strategy originates from the head: rational and logical.
During the pandemic, I witnessed many businesses making strategic choices, not just with logical planning, but also based on their virtues and beliefs. They led me to observe another origination of business strategies. It comes from the heart: emotional and belief driven.
I would like to share with you this story about how a business shaped its survival strategy with both the heart and the…
Time and time again, topics about freemium draw heated and opinionated debates among marketers, executives and entrepreneurs.
On the one hand, this simple ‘free + premium’ idea carries an enticing possibility of bringing in a huge customer base efficiently, which has been fueling amazing growths of Spotify, Fortnite, Zoom, etc.
On the other hand, it’s been the culprit of struggles and even bankruptcies for other companies. Many SaaS companies suffered painful losses due to freemium. Some went bankrupt, and others eventually ditched it to become profitable. GetResponse (email marketing), Chargify (B2B billing and revenue management) and Qualaroo (survey tools) are…
Successful pricing model innovations are game changers. By disrupting the traditional taxi services with a P2P marketplace model, Uber created a $60B+ ride-sharing market. Through the combination of freemium, ads and subscription models, Spotify revitalized the recorded music industry, reversing its declining trend and bringing it back to healthy double digit growth. By shifting the software license model to subscription, Adobe changed the way they deliver and capture value, growing their market cap by 10X in 10 years.
Pricing model innovation can be a big driver for growth and competitive advantage. For example, through transition from selling software licenses to subscriptions, Adobe grew its market cap from $16B in 2010 to $164B in 2020, or more than 10x increase in 10 years. Through introduction of the freemium model, Spotify turned music-pirating fans into monetizable users (via ads or subscription), growing active users to 286M in Q1 2020 while converting 130M to premium subscribers.
Motivated by these dramatic success stories, many feel compelled to pursue pricing model innovations and differentiation. …
I received an email from Alaska airline back in March. The email talked about the launch of their Peace of Mind policy during COVID-19: any ticket purchased between 2/27 and 4/30 can be changed or canceled without a fee. Along with that they highlighted a big fare sale. I found the airline’s combo offer attractive: they invited me with favorable prices, and more importantly, relieved me from the fear of commitment in this uncertain time.
Sr. Business Planner at Microsoft