GTM Sauce

Life360 · B2C · family location and safety app

Give every software feature a great free version; charge for costly services

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What they did

Rule for new features: if expensive to provide (e.g. roadside assistance, where Life360 pays for each tow), it is premium. Software features start free and are built as well as possible, then teams create a genuinely new paid layer on top rather than an artificial gate ('two free, rest paid'). Reorganizing so teams that historically owned free vs paid experiences think about both. Silver/Gold/Platinum tiers; the goal is to convert as many as possible, steer each to the right tier, and keep them subscribed.
Stage
scale

In their words

Freemium at Scale: Why Life360 Protects its Free Users – Giordano Contestabile

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Giordano ContestabileIt's a very interesting one. And it's actually something that we've been wrestling with because historically we had teams thinking about the free experience. And team, which are the ones I work with now a lot, thinking more about the paid experience. And that's actually not the right way to look at this because in most cases we think that unless there is a reason and the reason is usually cost.

Giordano ContestabileFor example, we offer roadside assistance to our subscribers, right? We could not offer roadside assistance to free users because every time they call it, we pay for the tow, right? And so that's one where yes, it's a paid feature and I think nobody expect to get roadside assistant for free.

Giordano ContestabileIn other cases, we think that every feature should be freemium. Meaning that every feature that provides value to a user should be great in the free version of the feature itself. And then it's up to us find value, find additional value, real value that we can provide as a premium, right?

Giordano ContestabileThe challenge in most cases is thinking of the mium part of freemium, not as an artificial gate. Say I give you two for free and then the rest is paid, although some features that we have worked that way. But the challenge that we are wrestling most times is how do we make something free and then create a completely new experience, a completely new tier on top of that that is worth paying for?

Giordano ContestabileAnd so part of this is getting teams that always think about free to think about both and vice versa. And it's an interesting debate that we have. There's no single question. But I will say generally speaking, if something is very expensive to provide, it would become a premium feature. If something is more of a software based feature, we start with free, we try to build the best that we can, and then we find the creative way to build on top of it.

David BarnardHow do you think about or measure how that factors into long-term growth? Especially compared to customer acquisition and growth. It's like, it's easier. It's not easy these days post ATT, but it's easier to measure, it's easier to see the numbers. How are you tracking that subscriber value that you create? And how are you thinking about growing that and its impact on revenue when it's so much easier to track other things?

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Tags: freemium, feature-gating, tiered-pricing, packaging