Giving My Product Away for Was One of the Best Business Decisions I Made — Here's Why.

My first business was an accident.

When I was successful assemblage successful the precocious '90s, I built a rank website for a student organization. It was a batch for illustration Facebook, but pre-dated Mark Zuckerberg's efforts by a fewer years. I released it arsenic an open-source merchandise — and it became a immense hit. It was truthful successful that, moreover though it was free, group started offering to salary maine for it, requesting customizations and features truthful they could usage it for their sites.

There's a batch of statement astir whether you should give your merchandise distant for free. Over connected the Startups sub connected Reddit, opinions are mixed. "In general, 'free' whitethorn sound for illustration thing good, but you ever trim the perceived value of thing if you springiness thing retired for free," writes 1 user.

I disagree. I deliberation giving your merchandise away, astatine slightest successful a constricted capacity, is 1 of the champion things you tin do for your business. Here's why.

Related: 5 Ways Your Business Stands to Benefit From Offering aProduct aliases Service

Non-customers tin effort it out

People emotion free things. Behavioral economist and writer of the book Predictably Irrational: The Hidden Forces That Shape Our Decisions Dan Ariely demonstrated this successful a celebrated research successful which he offered up a Lindt truffle for 1 cent, and a Hershey Kiss for free. Even though the truffle was unequivocally the superior chocolate, the mostly of group chose the Hershey Kiss instead. This research makes an important point:is the lowest obstruction to entry.

There are respective methods of attracting customers by offering up your merchandise for free, which typically involves letting them get a sensation of what you've made earlier they perpetrate to paying. One action is simply a free trial, which entails making the merchandise disposable for a constricted clip aliases a group number of uses earlier requiring payment. Another is the "freemium" model, which gives users entree to a basal type for free, pinch the opportunity to upgrade to a paid type that offers much features.

Creating a "try earlier you buy" acquisition is 1 of the champion ways to nett caller customers. However, converting free users to paid ones isn't ever easy — arsenic Harvard Business Review notes, "when customers anchor connected free, it tin beryllium difficult to dislodge them." The authors' investigation recovered that 1 strategy is to connection aggregate versions of a merchandise aliases service. With 2 options, customers whitethorn instrumentality to the free versions. But pinch various options, they'll often take the mediate "compromise" one, emotion arsenic though they're settling for a reasonable mediate ground.

Depending connected really you're structuring your offerings, though, the reality is that you only request a mini fraction of conversions to beryllium successful. My company, Jotform, has 200,000 customers who salary for our products connected a monthly aliases yearly ground — that's conscionable 1 percent of the 20 cardinal group who person registered successful the past 17 years. Even so, it's capable that we've reached 100 cardinal free monthly progressive users.

Related: How to Make Big Bucks While Selling Your Products for Free

It builds assurance successful your product

Following the monolithic occurrence of the open-source merchandise I released successful college, I decided to return the aforesaid attack pinch Jotform. For the first twelvemonth of its existence, our online shape builders were wholly free.

The benefits of this strategy were twofold. The first was that it gave Jotform the opportunity to create a personification guidelines without spending a dime connected marketing. The 2nd was that I was capable to cod feedback and amended what needed to beryllium fixed. I work together wholeheartedly pinch speaker and writer Brian Tracy, who has written astir the immense worth of testing products pinch customers, advising entrepreneurs to "go to a imaginable customer pinch your sample aliases prototype and inquire if he would bargain it … Then inquire him really overmuch he'd salary for this product. If group knock your caller merchandise idea, inquire them why. Ask really the merchandise could beryllium modified to make it much attractive."

Believe me, the first loop of our merchandise was not perfect, and I americium gladsome I had the chance to reside those early issues earlier releasing a paid type the pursuing year. By the clip we released the first premium shape builder successful 2007, I felt assured that it was worthy the interest we were asking group to pay. Customers, too, could spot that we'd made adjustments and tweaks based connected their input, which added to Jotform's legitimacy.

Our first premium type costs $9, which was debased capable that we still did consulting activity and customized modifications to the package we sold. It was slow going, arsenic bootstrapping often is. But the important point was that pinch each iteration, our numbers steadily grew.

There's a batch of statement astir the imaginable hazards of giving your merchandise distant for free. For me, it's each portion of my low-risk attack to entrepreneurship. Offering your merchandise up without asking for thing successful return not only builds a customer base, it gives you the chance to get feedback and make adjustments earlier the stakes go excessively high.