January 29, 2013 at 11:08Why free software for business is bad. Reason for 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
Late last year, Google Apps turned off registration for free accounts. You must be 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 someone, this may be a big secret, but the freeness of any product is two sides of the same coin. And if the advantages of the word “free” are transparent for 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 that a free service carries.
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. Since we are talking about online services, the first thing that comes to mind is your personal data or, for example, the content that you create. Hi to Facebook and Instagram: their privacy policy is a great example of blurring the boundaries between what belongs to you and what belongs to service owners. Perhaps, such nuances are of little concern to end users, but such tricks will not work with the owners of companies.
A free service can never provide you with good technical support. In any case, one that would suit you;) Have you at least once tried to contact the technical support of some 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 goes on and on. You can see what happened to them: someone continued to exist as a free tool, and someone came up with the need for competent 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 doubt about how well Google knows this market.
In the DotCom era, companies were afraid to create anything potentially interesting to Microsoft. Venture capitalists covered hundreds of startups even before the official launch with one single phrase: “And if something like that will be released by Microsoft tomorrow?”
Today, of course, Google seems to be a scary beast for most start-up startups . Through the eyes of novice IT entrepreneurs, this is an all-consuming monster that you involuntarily have to take 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’re free ...
Due to these conclusions, the market is becoming very unattractive for most players. IT companies were in no 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, which will initially be hundreds of times more popular than yours?
However, Google itself at some point probably realized that delivering a business solution and not being able to provide quality support is the wrong approach. By the way, now Google Apps users receive online help 24/7.
Of course, Google Apps can return to 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 innovative ideas. Ideas that (most importantly!) Will not be free, but affordable in the same way as Google Apps, which remained acceptable even for small businesses. ($ 50 per year per user)
Perhaps the most important thing to take out of all these thoughts is that the dark side simply loses its essence when people pay for software with money, rather than personal information or content. From the moment of payment, the relationship between the supplier and the buyer goes from the level of trust to the level of guarantees. For business, this is important, agree.
Paid Google Apps - this event is very good in the first place because it will finally usher in a healthy competition, stimulate innovation and provide the right choice for players in the small business market.
Late last year, Google Apps turned off registration for free accounts. You must be 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 someone, this may be a big secret, but the freeness of any product is two sides of the same coin. And if the advantages of the word “free” are transparent for 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 that a free service carries.
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. Since we are talking about online services, the first thing that comes to mind is your personal data or, for example, the content that you create. Hi to Facebook and Instagram: their privacy policy is a great example of blurring the boundaries between what belongs to you and what belongs to service owners. Perhaps, such nuances are of little concern to end users, but such tricks will not work with the owners of companies.
No money, no service
A free service can never provide you with good technical support. In any case, one that would suit you;) Have you at least once tried to contact the technical support of some free software? Now imagine that you need to entrust your business to them. Fearfully?
Free services for small businesses do not live long
They come and go pretty quickly - a routine. Rule.fm , Freedcamp , Teamlab , DotProject - the list goes on and on. You can see what happened to them: someone continued to exist as a free tool, and someone came up with the need for competent 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 doubt about how well Google knows this market.
Why is serving a small business so difficult
- According to the Census Bureau, there are 30 million businesses in the US that fall under the small business category. Endless potential! Conquer - 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 to, say, reach out to small business owners through mass advertising, then your target audience is <1 out of 10. This means you will have to make a lot of efforts to achieve the desired result.
- Even worse, unlike large enterprises, small business owners are very difficult to find. In a literal sense. With the increase in the number of remote workers, many so-called “small enterprises” do not have an official “front door,” which means finding them and delivering the desired information will cost many times more.
- Finally, even if you find them, be prepared for the fact that small business owners are very demanding. These guys, as a rule, are very busy with their work and expect good work from the tools that 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.
About how free strangles competition or why paid - it's good
In the DotCom era, companies were afraid to create anything potentially interesting to Microsoft. Venture capitalists covered hundreds of startups even before the official launch with one single phrase: “And if something like that will be released by Microsoft tomorrow?”
Today, of course, Google seems to be a scary beast for most start-up startups . Through the eyes of novice IT entrepreneurs, this is an all-consuming monster that you involuntarily have to take 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’re free ...
Due to these conclusions, the market is becoming very unattractive for most players. IT companies were in no 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, which will initially be hundreds of times more popular than yours?
However, Google itself at some point probably realized that delivering a business solution and not being able to provide quality support is the wrong approach. By the way, now Google Apps users receive online help 24/7.
Of course, Google Apps can return to 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 innovative ideas. Ideas that (most importantly!) Will not be free, but affordable in the same way as Google Apps, which remained acceptable even for small businesses. ($ 50 per year per user)
Summary
Perhaps the most important thing to take out of all these thoughts is that the dark side simply loses its essence when people pay for software with money, rather than personal information or content. From the moment of payment, the relationship between the supplier and the buyer goes from the level of trust to the level of guarantees. For business, this is important, agree.
Paid Google Apps - this event is very good in the first place because it will finally usher in a healthy competition, stimulate innovation and provide the right choice for players in the small business market.