Nathan Wailes - Blog - GitHub - LinkedIn - Patreon - Reddit - Stack Overflow - Twitter - YouTube
Free samples / trials (Sales technique)
- This seems unlikely to be true but the underlying idea seems plausible: an animal shelter rented out its dogs to people, and the people ended up bonding with the dogs and keeping them.
- I think it's unlikely to be true because of the cost of picking up the dogs from a shelter; animal shelters are usually in out-of-the-way places with low rent, and so it would generally be quite expensive (in terms of time) to pick up a dog for a single walk. I suppose the dogs could have been rented for multiple days, but that seems unlikely because then the adult needs to worry about feeding the dog, taking it to the bathroom, etc.
- ...and it's actually true, although the event was not as successful as the picture indicates (only six dogs were adopted).
- How can CloudFlare offer a free CDN with unlimited bandwidth?
Five reasons we offer a free version of the service and always will:
1. Data: we see a much broader range of attacks than we would if we only had our paid users. This allows us to offer better protection to our paid users.
2. Customer Referrals: some of our most powerful advocates are free customers who then "take CloudFlare to work." Many of our largest customers came because a critical employee of theirs fell in love with the free version of our service.
3. Employee Referrals: we need to hire some of the smartest engineers in the world. Most enterprise SaaS companies have to hire recruiters and spend significant resources on hiring. We don't but get a constant stream of great candidates, most of whom are also CloudFlare users. In 2015, our employment acceptance rate was 1.6%, on par with some of the largest consumer Internet companies.
4. QA: one of the hardest problems in software development is quality testing at production scale. When we develop a new feature we often offer it to our free customers first. Inevitably many volunteer to test the new code and help us work out the bugs. That allows an iteration and development cycle that is faster than most enterprise SaaS companies and a MUCH faster than any hardware or boxed software company.
5. Bandwidth Chicken & Egg: in order to get the unit economics around bandwidth to offer competitive pricing at acceptable margins you need to have scale, but in order to get scale from paying users you need competitive pricing. Free customers early on helped us solve this chicken & egg problem. Today we continue to see that benefit in regions where our diversity of customers helps convince regional telecoms to peer with us locally, continuing to drive down our unit costs of bandwidth.
Today CloudFlare has 70%+ gross margins and is profitable (EBITDA)/break even (Net Income) even with the vast majority of our users paying us nothing.- So it sounds like the same "attract the whales" approach that free-to-play games use.