Drop the hard paywall and give the core app away for free

David BarnardI wanted to dig a little deeper into the switch to freemium, because that was a big deal for Opal. You shared a slide in your presentation showing that your download to paid dropped from 20% all the way down to 9%, which sounds super scary to have your conversion more than cut in half, but why did that ultimately end up being good for the company?

Kenneth SchlenkerNo, we did that. We gave away the product for free. You mentioned that our pay penetration, so that's how many people are paying subscribers within the monthly active users went from about 20% to 9%. That's scary when you see this chart, but it was the right decision.

Kenneth SchlenkerThe reason it's the right decision is because when you give the product away for free, the people that are using the product become your marketing. What we've seen as a consequence is also a shift where we have a lot more organic growth than we ever have. It's massively increased. What we're able to do is we're able to accelerate this organic growth as well with some features we can talk about.

Kenneth SchlenkerAnother thing that we've seen is as a consequence of freemium, is that we have a new kind of user or a new segment that exists. We started with a segment of, I would say, professional pros that are interested in productivity. People like you and me, people probably listen to this podcast that care about their time and place a high ROI and saving time. That was the initial segment.

Kenneth SchlenkerIt depends on what you're looking for as an app founder, whether you're trying to build lifestyle business, but if you're trying to truly create a product that has the potential to get used by hundreds of millions of people or billions of people, which is really what we think we must do because of the size of the problem we're facing, then I think freemium is a really good strategy to get there.

Kenneth SchlenkerYeah. To sum up, we've seen a decrease in our conversion to paid, but we've also seen as a consequence of that, an explosion of our DAUs and revenue with it. It's a short-term, scary drop, but what happens in the long-term is that it pays back tenfold.

David BarnardThat's amazing. Another thing you did share in that presentation is a question you ask yourself of where to draw the line of freemium. I think this is a little counterintuitive, but I think really important to dig into. You said, "Would a non-payer recommend the app? If no, give away more."

David BarnardWhy?

Kenneth SchlenkerYeah. I think if you want the freemium dynamic to really pay out, you need to make sure that the free users are recommending the app. Otherwise, that doesn't work. I think that's a good way to measure the quality of your freemium product. You got to figure out whether free users are going to recommend the app.

Kenneth SchlenkerI think that's an issue a lot of apps I see where they're just giving away small amounts or maybe it feels like a trial, and then it's recapped. If you do that, you're probably not going to benefit from the organic growth potential of freemium.