Don't offer a free tier
I always see software companies offering perpetually-free tiers in their services. Today, somebody wrote to me saying that the lack of a free tier in Commento.io is a terrible business decision. Setting aside the fact that Commento is already well profitable and is something I enjoy working on every day (which by definition makes it a good business decision), I fundamentally disagree with this, especially if you like to run companies independently like I do. Instead, offer a free trial period to allow your customers to evaluate your service and then require payment once the trial period ends.
Software scales very well with users. Commento can trivially handle hundreds of thousands of websites without breaking a sweat. However, system resources like CPU and disk storage aren’t the only limited resources required to run a company. It’s the fact that customer support doesn’t scale that constrains my service. Keeping up with feature requests doesn’t scale. Handling service abuse doesn’t scale. Basically, humans don’t scale.
I don’t have a customer support team; it’s just me answering questions. By requiring a subscription to continue using Commento.io beyond the 30-day trial period, not only have I chosen my customers carefully, I’ve also saved myself hundreds of hours in support. And even if I did have a customer support team, I’d do well to reduce their burden by choosing my customers carefully.
Could I offer a free tier without any support guarantees? Sure, but eventually someone will have questions and they’ll be disappointed when I refuse to answer them. I’d rather disappoint them early on by not offering a free tier in the first place.
By requiring payment, I also have a sustainable business model that does not depend on ads or selling my users’ privacy to make back that money. Not a bad fringe benefit, eh?