Bijan Sabet

Freemium backlash?

It’s easy to kick someone when they are having trouble I guess. Ning announced a significant layoff and the critics pounced.

I guess I wasn’t surprised at this point. But the thing that surprised me was the negativity about freemium.

Just because some companies struggle with freemium doesn’t mean the model doesn’t work. In my mind that would be like writing off the entire search space because pre-google it wasn’t a big business or writing off ecommerce because a bunch of startups aren’t successful in the category or writing off any category frankly.

There are plenty of reasons companies in every category struggle or fail. Their decision to go with freemium may not have been a natural fit for their products or services. Or maybe the product struggled regardless of business model. Too many variables to blame freemium.

I believe this with all of my heart. There are just too many large companies (google, craigslist, etc) and young companies (xobni, dropbox, zynga, pandora, etc) that are nailing the freemium model along with amazing products.

Of course I’m biased here to be sure. I am thrilled that our portfolio companies are thinking through creative ideas on revenue. Tumblr has launched unique revenue products and so has Twitter.

But let’s not be too hasty to judge an entire category when some companies struggle. This is the startup business. Many companies won’t work out - we know that up front.

But a number will create figure it out. They will build something so special and incredibly important. Thankfully.