Start with a 7-day free trial, then tune trial length to limit AI costs

Phil Carter… product that essentially has no underlying costs, but that's not the reality for most businesses. And so this is just another flavor of what we just talked about, which is in the same way that AI powered features probably belong in a higher price subscription tier, trial links and freemium product offerings need to be a little bit more conservative in a world where giving away AI features has significant cost ramifications for the business.

Phil CarterAnd so Tolan is an example of a company that started with a seven-day free trial and has adjusted its free trial length and its premium offering over time. There are plenty of examples of other companies that are opting for shorter trials or adjusting their freemium offering for the same reasons. You guys had in your latest state of subscription apps report this data point that called out that despite longer trials, trials as long as 14 to 30 days often performing better on conversion, the majority of companies are actually trending in the opposite direction toward shorter term trials.

Phil CarterAnd I suspect the reason for this, if you were to cut it for AI versus non-AI apps, I suspect this is being driven largely by AI apps that are shortening their trials out of necessity, because if you give away 30 days of free AI feature usage and you have whales racking up massive compute costs without paying you a dime and then they churn, then that's not a sustainable business.