Freeloaders are common in most businesses. They are the ones who collect all the freebie samples you give out, but yet never return to buy the full product. They are the ones who go into bookstores and spend all day reading without buying. They attend free seminars but never purchase anything there either. They consume all the content you provide them, but never upgrade to a paid membership. They download free apps, but never upgrade to the full ones.
What can you do about this?
We live in a society of free. Why pay for things when there is so much available for free already? News can be read online for free. Blogs can be read for free. Podcasts can be downloaded for free. Wikipedia can be read for free. So many apps are free. Can you blame people for wanting things from you for free?
The trick is to change your business model to embrace freeloaders. What can you do to benefit from them? By emphasizing the following aspects of your business, you can actually get them to increase your business revenue.
1. Social Media
Encourage your users to share your links on twitter, like you on Facebook and join your fan page. These are all activities that don’t cost anything, but end up promoting your product to other potential paying members.
2. Ratings and Reviews
Ratings and reviews of your products can be crucial for generating future sales. From time to time, I’ve put apps on sale for free to get more downloads, which lead to more ratings and reviews. Obviously this strategy can backfire if your product isn’t worthy of a good review.
3. Recommend to a Friend
Make it easy for users to recommend your products to other friends of theirs. This could be through social media links, or through email templates with your product link already in them.
4. Provide feedback
If you are receiving negative reviews on your product, it is in your interest to find out why. Respond to support emails promptly. Even after solving any issues you may have, maintain your relationship with the user. If they took the time to point out an issue to you, they may be willing to provide feedback on other aspects of your product. I’ve used this strategy several times with my mobile apps.
Even though you may not directly benefit from freeloaders monetarily, it is in your interest to continue publishing free content to them through freemium type models. Their engagement in your product is what will introduce it to the real paying customers who will be following behind.
This past weekend, I attended Startup Weekend Taipei. If you’re not familiar with what a startup weekend is, it is a weekend event that attracts developers, designers, marketers and anyone with an idea. They get together to form a team, develop an idea over two days, then pitch it in front of judges for a prize on the final evening.
Friday:
The event was sold out and had attracted around 120 attendees. Each attendee wore a name tag with a dot to identify their skill set. Mine was red, signifying “Business / Marketing”. The joke going around was that these were the people with no specific skills.
I had come in with several ideas of my own, and was toying with which one was the best for this event. To date, all my projects have been developed on my own, through outsourcing. This was the first time that I would be able to form my own team and manage everyone from the same room. I was looking forward to the process, experience, and the contacts I hoped to make along the way. For most people, the networking is their biggest gain from this event, and I too expected to gain from that.
The pitch I ended up doing was an app (web and mobile) to help users search for food items they were craving, and find restaurants nearby that served them. There was a long line-up of about 30 people waiting to present, and I was in the middle of the pack. I didn’t want my pitch to get lost in the shuffle, and wanted a way to stand out so people would remember it.
I noticed that most pitches were done in Chinese, since the event was held in Taiwan. I thought about doing my pitch in Chinese as well, but then decided to do it in English. I figured that I wanted the members of my team to be able to speak English, so doing the pitch in English would eliminate non English speakers from joining. It would also make my pitch stand out among English only speakers.
Lesson 1: You don’t always need to target the biggest market. It can sometimes be better to be a big fish in a small pond, than a small fish in a big pond.
Rather than just describing the problem that I hoped to solve with my product, I told a story of how my pregnant wife always had cravings for particular foods (true story!). For example, she might suddenly want a Kung Pao chicken (宮保雞丁) and would send me out on my scooter to find this food. I talked about how frustrating it was to not know which restaurants served those particular foods, without being able to see their menu first.
After the pitches were completed, attendees got to vote on which ideas they wanted to see continue. The top 15 ideas were then selected. Many people came up to me and recognized my pitch among the rest. “You’re the one with the pregnant wife”.
Lesson 2: Use stories where possible. People remember stories.
As our team was forming, I realized that we needed the right match of skills. We had three coders, a mobile and a marketing person. I was informed that we needed a designer. I sent one of the members out to recruit a designer. He did well, and returned with one shortly. Our team was complete.
Lesson 3: Form a team with skills that complement each other well. Your idea is only as good as the team that surrounds it.
Our mission that evening was to come up with a team name. This was tough for us, because our target market was local Taiwanese, so traditional English names wouldn’t necessarily work with them. We ran through several combinations.
We found some that we really liked, that were promptly rejected by the local Taiwanese members of our team as not being “local friendly”. Eventually we settled on Food Jing, a play on the word 附近 in Chinese which means “nearby”.
Lesson 4: Choose a name that resonates with the market being served.
Saturday:
The coding team, led by Dobes and Greg spent all day developing the front and back-end of the product, working in tandem with our talented designer, Quaint. Will worked on the mobile aspect. In the mean time, Hao who had previously claimed to have “no relevant experience” was one of the hardest workers on the team – developing a comprehensive customer survey, and then interviewing a lot of people to get feedback on the problem we were trying to solve. Later, he would visit twenty restaurants (the Taipei rains didn’t help his cause) to get feedback from owners there as well.
Lesson 5: There are no small roles. Every member of your team can contribute somehow.
During the day, several mentors who had been assigned to assist teams, came to visit us to monitor progress. They asked questions about our business model and there were several that I couldn’t answer. After each visit, I found myself redoing parts of the plan to address the raised issue. It seemed that just when we thought we had thought of everything, someone new would point out something we had overlooked.
Lesson 6: You can’t see the forest for the trees. When you are truly invested in a project, it is easy to get too focused on the details. Outside opinions can be extremely valuable at these times. If they don’t get it, there’s probably a problem to be fixed.
By the end of the day, we had made good progress, but there was still something missing. Our Facebook fan page hadn’t gotten the traction we had hoped it would get. (We would later find out that we had accidentally restricted it to fans in Taiwan only, which blocked a lot of fans from getting through – oops!). So we needed something to get us back some momentum.
As part of the marketing team, I noticed that the word foodjing could be used in many creative ways. So I found a freelancer online to create a parody video of “Killing Me Softly” by the Fugees. We would later release it as being by the Food Jies. Fans loved it, and it helped market our brand as being a little zany and over the top.
Lesson 7: Problems and challenges will arise in any venture. It’s how you overcome and rise from them that determines your future success.
Sunday:
The final day was spent completing the demo and working on our presentation. I decided to build on the momentum we had from the previous day, by ordering tshirts with our logo, for our team to wear on stage. This proved extremely difficult to get done in a single day (on a Sunday no less). Once again, Hao came to the rescue, running across town from vendor to vendor until he found one who could print just one for us. We took it!
During the practice presentations, I had worked to overcome all the questions that the mentors had given me the previous day. I invited more to grill me further. Mark Koester recalled a stunt that his startup team performed during their final presentation. They had ordered a hot dog during the demo, that was later delivered on stage. We decided to do the same thing in ours by ordering a taco during our demo.
Lesson 8: Find ways to make your presentations different from the rest of the pack, so it will be noticed by the judges and audience.
One of the visitors who gave us advice, would later turn out to be one of our judges. He asked me about where our revenue would come from. I told him that while Taiwan had a lot of smaller, mom and pop restaurants, we planned to focus on the larger restaurants that could afford to use our services. He frowned and commented that if it was him, he would be focusing on those smaller restaurants, rather than the bigger ones, since that’s where the real opportunity was.
I thought about his comment a lot and realized it made sense. I refocused our presentation to emhasize the smaller restaurants and the long tail of food. This also further differentiated our product from competing ones on the market.
Lesson 9: The mentors are provided for a reason. Listen to their advice and follow it!
It was presentation time. Pandey started us off with massive enthusiasm. During the demo, he showed how a taco could be ordered. During my half of the presentation, the taco was delivered on stage to a thunderous ovation. I wore our branded tshirt underneath, and revealed it during the presentation, which also drew applause. Finally it was down to the judge’s questions. Practice makes perfect. No surprise questions there, so no problem with the answers. The crowd seemed to like the extra touches we had prepared.
Lesson 10: Have fun with it. People like to deal with happy people.
Judging from the responses, I suspected we had a chance at a top three finish.
As the second and third place winners were first revealed, I wondered if coming in first place was possible. Out of the corner of my eye, I thought I noticed Sascha Pallenberg aim his camera phone at me, as if expecting to see us win. Sure enough, we were announced as the winners and pandemonium ensued on our team. All the work we had put in had paid off, and we had come away as winners!
Later, I had a chance to mingle with the judges to ask what specifically they had liked about our team. The feedback given included having a clear message of the product we were trying to sell, as well as execution of this idea. Business cards were exchanged. New relationships were formed.
The Future:
Now that startup weekend has ended, a new chapter begins. There has been great support on our fan page, which has inspired us to continue this process. Meetings have been arranged this week and next, and the business plan has been honed down further. I realize that there is a long road ahead of us, but it’s one that I’m looking forward to traveling. I hope to document more details on this blog as they happen.
How do you build a business by giving content away for free? I wondered this myself when developing my initial sales strategy for Chinese Learn Online. Here were the issues I had to deal with:
I had no marketing budget.
I had no brand recognition, and thus no credibility with my customers.
My solution? Give my main product away for free! Then offer an upsell to a paid product. (This is also known as a freemium strategy).
This solved both issues above.
By making the product free, it attracted a lot of users, who then recommended it to other users.
Using the product sold users on its quality, thus building credibility.
Obviously this freemium strategy only works if you have a good product to begin with. One that people would recommend to others.
The next issue was what to offer in the upsell. I had to make sure that whatever it was, the core product had to remain free and completely usable without purchasing the upsell. Some options here include:
Supplement the functionality of the product.
Provide a more convenient delivery system of the free product.
I used both options in my case. I sold PDF transcripts of the free audio (the audio was still completely usable without the transcripts). I also sold a bulk download of the free lesson packages. This let a user download all lessons of a set together, rather than having to download them for free.
There are many famous examples of the freemium model at work, with people paying for items that can be had in other forms for free. Many authors have had huge sales of books that are also available in free PDF form. In this case, users are willing to pay for the physical form over the free digital version.
Can the freemium model be used successfully in your business?
If there’s one thing I’m good at, it’s coming up with ideas. Some ideas come from real sources, like reading a great blog article with great tips on how to improve my business. Or reading a new book on marketing.
Other ideas come from more unexpected sources. I might be at a park, watching kids play, and get an idea for a new website or iPhone app. Or I might hear a song, or wake up from a dream and have new found inspiration. Perhaps it was the solution to a design problem that I had been mulling over recently. Or maybe it was a new way of tackling an existing problem, that I hadn’t thought of before. Either way, our mind works in mysterious ways and sometimes requires rest to come up with a solution.
In the past though, these ideas escaped me soon after they arrived. The excitement and details that seemed so vivid when they were first realized, just didn’t seem so exciting when I tried to later recall them.
I realized that I was missing out on a lot of wasted opportunity here, and needed to come up with a better system. In recent while, I’ve developed a three step system for myself, based around tools that are absolutely free!
Step 1: Brainstorm
I’ve been using the evernote app quite regularly recently. The beauty of evernote is that it can be used as a web app or mobile app. I regularly use it through my browser. on my iPhone and on my iPad, depending on where I am and what I’m doing at the time.
I keep several notes running, based around different themes. Each project I’m working on (that deserves inspiration) has its own note. So if I have an idea to improve one of my apps then I’ll click on the note for that app, and add to any existing notes that might be there already. If I just thought of a way to improve the usability of one of my websites, then I’ll click on the note for that site, and add to it there. If I’m reading an article online that inspires me somehow, then I’ll open up my evernote tab and add to the relevant note there.
One of Evernote’s key features is that the notes you create are always synced, no matter what device you entered it from. It even handles pictures and recordings, if you think that conveys your idea more effectively.
The key at this stage is to get the idea down as quickly as you can, without worrying about the details too much. Don’t even judge if the idea is that great or not at this stage.
Step 2: Maintenance
Over time, the notes I maintain on Evernote start to build up with several ideas in each of them. This is where some maintenance is required. Once a week, I open up my Evernote app at work and start to go through each note. This is when I reorder the ideas I have collected into a more logical form, and maybe change the order around a bit so that they make more sense.
I may find that some ideas aren’t practical or as relevant now as when I first noted them down. That’s ok though, as it’s part of the process. Along the way I will find some really good ones that need to be acted upon.
Step 3: Action
At this stage, I take all the ideas that can be implemented right away and put them in my daily task manager. I use Google Tasks in Gmail myself, but any task manager application should work. For each day of the week, I list out the tasks that I plan to accomplish that day, some of which may have come from my earlier idea list.
I’ve found this new system to work well for me, as I’m now able to record and act on new ideas that come to me from any source, at any time of the day.
Do you have a system in place to capture ideas and thoughts that come to you? Are you able to act on them efficiently?
Want to succeed in life? Surround yourself with really good people. People who make you better and stronger in life. Here are the types of people you should look for:
People who motivate you. This group could include your spouse, family and close friends. They encourage you to succeed, cheer you on from the sidelines and congratulate you on your victories. Conversely, stay away from people who bring you down or demotivate you.
People who depend on you. This group could include your kids or aging parents. These are the people who you want to provide a better life for. So having them around motivates you to succeed.
People who complement your skill set. This group could include web designers, coders, artists and other people with skills you don’t have. You could convince them to join your team, or hire them as free lancers or consultants.
People who know other people. These could be friends who have lots of friends. Or it could be people who organize networking events.
People with resources. This group includes investors, mentors and other people who could help you succeed by pointing you in the right direction.
People who inspire you. These could be people in different fields who have overcome obstacles to get where they are, whose work ethic you admire. Or maybe they are just plain positive and optimistic, no matter what the situation.
Marketers and Salespeople. Even the best plans and ideas won’t get very far without the right marketing and promotion behind it. If you don’t have the skills in this area, find someone who does. Pay them using commissions or affiliates to get your product to the masses.
People who are going places. Remember that classmate in high school that you just knew would be a millionaire someday? Or that girl you thought would win the Nobel Prize one day? Or how about the valedictorian who you could see being the president someday? One way to get where you want to get is to find someone else who is going there, and hang on to their coattails!
I can think of people in each of the above categories who have helped me along the way. I’m also constantly meeting new people in my life to help take me to the next stage.
Which people in your life do you owe your success to?
Just finished reading a great post by Seth Godin on the benefits of giving to charity and why more people don’t do it. One common reasoning goes like this:
Whatever I give won’t be enough, so why bother giving anything at all?
Another reason I can think of is:
Once I put this dollar into the donation box, what happens to it? Does it really go towards helping the right people?
As marketers, these are the issues that charities need to overcome in order to promote themselves and succeed.
Are there similar issues that your audience has, that your business needs to overcome, in order to succeed?
by Chris Anderson.
