I'm a partner at Redpoint. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 20,000 others receiving these blog posts by email.

Crafting a Pricing Plan to Maximize Freemium Growth

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The three tier feature based pricing model is so common it’s almost a cliché. For some businesses it works well. But as Kenny van Zant explained to me, feature based pricing can slow growth in freemium businesses in two ways: first, feature based pricing creates incentives within a company to offer a subpar product and consequently creates unnecessary friction in the adoption process slowing growth. Both of these challenges arise when the pricing model is applied to end users, instead of ...

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Crawling - The Most Underrated Hack

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It’s been a little while since I traded code with anyone. But a few weeks ago, one of our entrepreneurs-in-residence, Javier, who joined Redpoint from VMWare, told me about a Ruby gem called Mechanize that makes it really easy to crawl websites, particularly those with username/password logins.

In about 30 minutes I had a working LinkedIn crawler built, pulling the names of new followers, new LinkedIn connections and LinkedIn status updates. All of that information is useful for me. But I just can’t ...

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Searching for Eric Schmidt

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For over two years, Larry and Sergey met CEO candidates before deciding to hire Eric Schmidt. Hiring a CEO was a condition investors imposed as part of the Series A terms. After the investment closed, the founders wanted to renege on that part of the agreement, but the board asked the duo to meet some of the valley’s top CEOs. At which point, Larry and Sergey only wanted to hire Steve Jobs. Eventually, they found and hired Eric.

From Netflix to Facebook, Twitter to ...

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A Letter to the Editor

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Writing on the web is undergoing a renaissance. What started in the late 90s as mass-market adoption of blogging has given way to high production quality, curated magazines. Despite all the innovation in blogging, there’s one part of the magazine that hasn’t been reinvented: the Letter to the Editor.

If you’ve ever read the Economist, you might have breezed past this section. Two pages long and full of small quips and challenges, the Letter to the Editor section has its own culture. Each ...

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Boiling a Billion Frogs

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Tracing the arc of Facebook’s user sharing model is to identify the biggest case of frog boiling in history. Contrast Facebook’s origins as a dating site limited to students attending a particular college to an exhibitionist’s dream syndicating every detail of a life across of 1000+ friend networks and potentially many more followers.

The question for users is: what is the quid pro quo? What value am I gaining in exchange for my data. Is it a fair swap or a bait and switch? What ...

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The Relationship Between Margins and Acquisition Prices

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Amazon operates its businesses at very close to break-even, zero net margin, to win the greatest share and prevent competition from undercutting them. This is as true for their books business as their infrastructure business, AWS. Bezos has explicitly stated this strategy and it’s the one that has led to Amazon’s massive success in many different lines of business.

Over sushi, a friend explained to me that this strategy might also extend to the way the company views acquisitions. If Amazon’s strategy is to run ...

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Every Damn Day

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“Blades square,” the coach yelled from the Boston Whaler as he increased the speed on his outboard motor, pursuing the eight man boat as we gained speed. I sat in four-seat, right in the middle of the engine room, the place for the taller, heavier rowers. The eight man team reluctantly complied with the coach’s order and rowed across the Long Island Sound, NYAC jerseys on our backs and the muggy, humid early summer morning sun reflecting in the water, practicing for national championships.

...

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Matching Marketing Tactics to The Sales Funnel

Marketing is one of those words without meaning. Or at least a consistent meaning for most people. Recently, I met a very bright marketer who broke down a few of the different marketing disciplines and matched them to a freemium sales funnel. His framework is a stroke of genius. I’ve drawn it below.

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The Four Disciplines of Funnel Marketing

The triangle on the left is a standard freemium customer conversion process. First customers become aware of the product, then they use the free version of ...

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The Five Key Dynamics of the Seed Market in 2013

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Last night I spoke at the Enterprise Tech VC Panel. We discussed five trends in the seed market and the outlook for 2013. These are the five most important trends for 2013, in my view.

MicroVC Funds Have Doubled Their Assets

Call it micro-VC or mega-seed fund, there’s a new investor class which raises funds between $50 and $100M to invest in seed-stage companies. Felicis manages a $70M fund, Jeff Clavier at Softech invests from a $55M fund and Steve Anderson of Baseline ...

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What SaaS Businesses Can Learn from the News Industry

If asked to describe the characteristics of a successful freemium business, I might highlight three things: effective community marketing, command of new distribution platforms, and a paid product users love that is priced by usage.

Look no further than ZenDesk, Evernote, Expensify, Dropbox. Each of them has built a vibrant user base using freemium products.

But what if instead of pointing to SaaS companies as the vanguards of this movement, I lauded The Atlantic, The New York Times and the Financial Times? In fact, SaaS companies can learn quite ...

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