How Freemium Almost Killed My Business

Evan here. I love stories about when the “best” advice completely fails. In the echo chamber that is the tech industry, there is often a methodology for running your company that is en vogue. For the last eight years, that methodology has been product-led growth, a pricing strategy for software companies. In this essay, the founder of Equals, Bobby Pinero, tries out PLG and finds out that maybe it isn’t for everyone. He is honest, transparent, and articulate; I highly recommend you read this even if you don’t run a SaaS company. As you do so, ask yourself, “What strategy am I using just because I’m supposed to?” Enjoy.

The following is a true story. It’s the story of when we made Equals free.

Equals is a spreadsheet that lets users connect to live data to analyze and build dashboards. The choice to go free was a decision that broke our business (for a minute, at least) and is one of the biggest risks I’ve taken as CEO. I went into it with a ton of conviction—and I turned out to be wrong.

When we launched Equals in April 2022, we made a big splash. We decided to gate access to the product and charge a flat $250 per month—Equals is a complex product to build, and the expectations for how a spreadsheet should look and feel are insanely high. We wanted to onboard every single customer manually. Our goal was to understand their use cases and establish a close relationship so they’d give us the benefit of the doubt when they inevitably ran into issues.

My co-founder and I had learned hard lessons about onboarding while building Intercom—specifically, that free access to tools didn’t always lead to more engaged customers. When we launched, we required new users to jump on an onboarding call and pay to get started. We also required them to connect a data source (like a database or Stripe account) to our spreadsheet product. ARR grew quickly, and we built a community of engaged users.

This strategy worked well at first. In fact, it worked so well that revenue took off.