Passpack is a free service, so how can we stay in business? You have every right to know…
The term Freemium, was coined by NY venture capitalist Fred Wilson when talking about his favorite business model. So though it may sound like backwards math to some — if a VC likes it, rest assured it’s profitable (no worries, we’ve done our own math too).
“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.”
Passpack is not ad supported, so until we get those premium versions rolled out, we’re a fully free service. This brings up some questions:
What are the paid packages and pricing?
Premium packages will offer more space and/or additional features like sharing and administered accounts.
Different packages will be available for different needs and prices will scale accordingly (not dissimilar to the way Basecamp does things). We’ve fixed some tentative price points, though these have already been adjusted once based on your feedback. Now: $10-$12 for a space upgrade. Currently, you can upgrade to more space Free for now if you need to.
When will the paid packages be ready?
We’re already working on it (Beta 6 is heading in that direction). We’ll probably be releasing the paid packages one by one, as needed.
For a service like Passpack, there are a number of audits to undergo and certifications that need to be acquired before releasing a fully commercial version. We’ll also need some legal council and a proper insurance.
Even though our technology has been ready for some time now, we can’t make the move out of “Beta” until we get these items taken care of. This is also why you can not store financial information in Passpack until then.
All of these things cost money, which leads to the next question…
How will Passpack survive until then?
Like most startups, we expect to be funded. It’s been an interesting experience thus far, and generally very positive.
A few of you have written me with concerns about how outside investors might try to change the products focus. We’re aware of this potential hazard – and it’s the last thing we want.
Passpack is about keeping your passwords private. Any investors we may bring on board will know that, or we simply will not bring them on board. We’ve already walked away from some potential partners, investors and even buyers because their vision didn’t align with ours.
Thanks to Tummblr for spurring me on for this post.