Vince Steckler: It was very intriguing because it was a very engineering-oriented company. Of the 40 people, there was one person in Finance, one person in Marketing and Sales, and 38 engineers. They weren’t doing very good business because there wasn’t anyone paying attention to it. I actually joined there taking what people would probably consider a lot of risk and massive base pay reduction.
Sramana Mitra: They were doing all online?
Vince Steckler: All online. It was a freely distributed product with a premium product. They were one of the early starters of the freemium model. There wasn’t much difference between the free product and the paid product. From the time someone downloaded the free product until the first time they got asked for any money was 15 months. There was just so many obvious things you could do, but it was also a product that had a very loyal user base, which is very important.
On consumer products, you can market your way to success. Free products have to be inherently good because you don’t have marketing money to spend. You live on recommendations. People aren’t going to recommend something just because it’s free. You have to have a top notch product. They did a really good job being engineering-centric. We just needed to get the publicity going.
Sramana Mitra: What was the trigger of people paying?
Vince Steckler: We do a survey. There are three general reasons people pay. One is they understand the extra features of the product and want them. Second is and this is typical of most Americans and English speakers, they just believe that a product you paid for is better than a free product. The third is great guilt. You get all three of those.
Sramana Mitra: What did you do when you came on board? Changed it to three months to pay?
Vince Steckler: No, it was something similar to that. What’s really important on a free model where you’re relying on community distribution is you can’t be too eager to get money because you end up bothering your users too much. When you have a product that has a low pain of removal, you want to make sure that you don’t bother your users too much. You want to make sure that they know about you and that you’re there. You want to make sure that they have the option of paying for something if they want.
What we switched over to was a registration period where when you install the free product, it will be silent for a month. After 30 days, it would ask you to register to continue to use it. As part of that registration, there’s an upsell. That started driving more business.
Sramana Mitra: Was the paid product now more differentiated from the free product?
Vince Steckler: Not really. Avast is, by far, is the world’s most popular consumer security product. In the US, you usually think of Norton or McAfee. We have more users in Brazil than McAfee has in the entire world. You can always think of Kaspersky here who’s Russian. We have 65% share in Russia, 55% share in France, and 63% in Brazil.
Sramana Mitra: This is all online marketing?
Vince Steckler: All online and viral distribution. We have more users in Latin America than Norton plus McAfee plus Kaspersky have in the entire world.