Growth in the Enterprise
How did companies like Yammer, Dropbox, Github, Expensify and AffinityLive grow from early adopters to millions of passionate users? They gave it away, made it sticky, and then got enough of your team members hooked to ask for $$.
With a freemium model, end users and teams can stay productive without needing endorsement of IT or being bound by limited IT tools. Enterprises are using the freemium model to get viral enterprise adoption.
Troy Larson at Mindjet says to look to employees when choosing collaboration software. “Adoption adoption, adoption" - however, according to a blog post by Craig Roth of Gartner Group, that while “lack of adoption is certainly a symptom (not the cause) of a failing collaboration initiative and worth investigation. There are many possible reasons that adoption can be spotty or non-existent.” Roth argues that “purchasing and licensing have little to do with whether a technology will be used…without IT even involved.” And the best way to determine which type of collaboration software shouldn’t remain solely in the hands of IT.
Take David Barrett at Expensify and Tom Preston-Werner at Github. David is the founder of Expensify-I loved this service instantly because of the painful experience I had with Concur. Expensify has a consumer-app friendliness with enterprise-app execution. They digitalized expense reporting! On a side-note, I was also impressed to hear about the "brainstorming trips" the Expensify team took to Philippines, Mexico, India, and Thailand.
Tom Preston-Werner founded Github. I will always remember him from reading "How I Turned Down $300,000 from Microsoft to go Full-Time on GitHub." GitHub has a passionate developer community, and end users come from a broad range of clients, from individual hackers to large enterprises, and from software developers to designers or authors. They raised $100M back in July 2012 to take advantage of their wide user base, and break into enterprise sales. In March, Wanstrath explained in an interview with GigaOM how this was important to the company’s mission:
“We’ve never raised any outside capital, so everything is bootstrapped. We started charging three months after our beta, so the whole time that GitHub has been alive, it’s been funded by its customers,” he says. “We really believe that the most important thing is making GitHub high quality. It has to be something that people are willing to pay for, because if they pay for it, we can keep working on awesome stuff.”
Freemium is driving the consumerization of IT. Through freemium delivery model and ground up adoption approach, enterprise apps can grow at a high rate, increase user engagement, deploy and iterate, and effectively provide business value.