From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran (Part 4)

SM: What was the conversion ratio?

RK: Over the past two years we have doubled our conversion rate on the free-to-paid subscription side to 4%. Overall, including our transactional pay-per-use which includes enterprise, the conversion rate is close to 10%.

SM: What did it start at in 2005?

RK: In 2005 it was less than 2%.

SM: When you were developing your freemium model, what was your plan to attract them into being paid users?

RK: There is a big funnel we think about. Every month we get 300,000 new registered users. Some percentage of them will be pay for use, some percentage will be premium users, and some percentage will upsell to a corporate license. Thinking back to the roots of the company, we wanted to build the largest, most reliable platform in the industry. That is good enough to keep people around, but it is not what we use to motivate people to pay.

The thesis of the company is that those are all checkboxes that we have to have. We have to be more reliable and secure, and we must serve the largest user base; that way, when a corporate account comes and states that they have 5,000 users we can easily prove our ability to handle the load. We sign up 30,000 users a day. We can scale and have done that as well. We feel that if our model works that nobody will look around for an alternate service and leave. We have an incredibly high Net Promoter Score based on how many times we save our users on deadline driven transactions. If someone has to get a large file to be printed by 6 p.m. today, where can they turn knowing the file will be delivered? We have received props for saving people’s jobs. Our defensibility is the brand and the quality of the brand.

SM: Are you selling to enterprises proactively, or are they just coming to you from their regular users?

RK: To convert an individual user to a paid account we have an upsell. The free service does not have tracking, much like you would get with FedEx. People are obsessed with those metrics. We found when we released our iPhone app that 30% of our tracking activity came from that platform. People check their Facebook, Twitter, and they check to see if anyone has downloaded a particular file.

We have found that if people use our service on more than one platform they are much more likely to convert to a paid user. The conversion rate is three times higher. Engagement presence, staying in front of our users, is huge. Ubiquity is one of the things we have driven. We have plug-ins for email platforms. Outlook is huge for enterprise, and our desktop application has been installed more than 5 million times. We have plug-ins for Acrobat, Office, Final Cut Pro, and other programs. We want to be wherever people are working.

SM: Did you have to do deals with Adobe and Microsoft for the plug-ins?

RK: I call it unilateral business development. They all have architectures which allow external developers, and we just seed those with programs with our software. There are other deals where we have worked proactively with companies. We have a very interesting partnership with a construction software company where we are bundled with their software application.

This segment is part 4 in the series : From Free To Premium With Ease: YouSendIt Cofounder Ranjith Kumaran
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