What Happens When Google Offers Your Product for Free?

Post on 01-Nov-2014

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In 2010, Gmail announced Priority Inbox, which does exactly what we do - prioritize emails. That was a scary day for us, but we've come a long way since then.

Transcript of What Happens When Google Offers Your Product for Free?

Googleoffers your product for free?

What happens when

You know how eve ry VC asks “wha t happens

when Goog le ge t s i n t o you r bus i ness? ” .

Goog le has had a l ong h i s t o r y o f ge t t i ng i n t o new

marke t s , o f f e r i ng se rv i ces f o r f r ee , and hop ing t o

mone t i ze t hem v ia i t s cash cow – pa id sea rch .

He re a re t he reasons we ’ re no t wo r r i ed , and you

shou ldn ’ t be e i t he r .

YOU GET WHAT YOU PAY FOR

I n 2 0 1 0 , G m a i l a n n o u n c e d P r i o r i t y I n b o x , w h i c h

d o e s e x a c t l y w h a t w e d o – p r i o r i t i z e s e m a i l s .

T h a t w a s a s c a r y d a y f o r u s : h a l f o f o u r b e t a

u s e r s l e f t . S i n c e t h e n , m o s t o f t h e m c a m e b a c k ,

a n d t o d a y 6 0 % o f o u r c u s t o m e r s a r e o n G m a i l , a n d

p r e f e r t o p a y u s m o n e y f o r s o m e t h i n g G m a i l

o f f e r s f o r f r e e .

W e h a v e b e e n k e e p i n g a c l o s e w a t c h o n G m a i l Ta b s .

T h a n k f u l l y t h i s e l i c i t e d e v e n l e s s r e a c t i o n f r o m o u r

u s e r b a s e t h a n P r i o r i t y I n b o x .

O u r a l g o r i t h m s a r e m o r e p e r s o n a l i z e d t o e a c h

p e r s o n ’ s b e h a v i o r , w h i c h r e q u i r e s p r o c e s s i n g a l o t

o f d a t a i n r e a l t i m e ( n o t s o m e t h i n g y o u c a n d o o n

t h e c h e a p ) .

O n e o f t h e r e a s o n s t o c h a r g e f o r y o u r p r o d u c t s i s i t

a l l o w s y o u t o b u i l d b e t t e r p r o d u c t s ( D e a t h t o

F r e e m i u m ! ) . G o o g l e d o e s n ’ t h a v e t h a t l u x u r y. U s e i t

t o y o u r a d v a n t a g e a n d c o m p e t e w i t h G o o g l e o n

v a l u e , n o t p r i c e .

LET THE BEST MAN WIN“in your segment”

C a n G o o g l e o f f e r a b e t t e r e m a i l f i l t e r i n g

p r o d u c t f o r f r e e ? M a y b e . H o w e v e r, o u r

b u s i n e s s i s e v i d e n c e t h a t i t i s p o s s i b l e f o r

D a v i d t o b u i l d a b e t t e r p r o d u c t t h a n

G o l i a t h – a t l e a s t f o r a p a r t i c u l a r s e g m e n t .

I n e v e r y l a r g e m a r k e t t h e r e a r e l o t s o f s e g m e n t s .

O u r s i s p r o f e s s i o n a l s w h o v a l u e t h e i r t i m e a n d

a r e h a p p y t o p a y f o r b e t t e r p r o d u c t s .

I f s o m e o n e i s h a p p y w i t h a f r e e v e r s i o n ( o r c a n

o n l y a f f o r d t h e f r e e v e r s i o n ) , t h e y a r e n o t o u r

t a r g e t c u s t o m e r. I f t h e y ’ r e u n h a p p y w i t h t h e f r e e

v e r s i o n - t h e y w i l l l o o k f o r u s . I f t h e y a r e o k w i t h

t h e f r e e v e r s i o n , b u t w a n t s o m e t h i n g b e t t e r – i t ’ s

o u r j o b t o g e t i n f r o n t o f t h e m . T h i s b r i n g s m e t o

t h e l a s t p o i n t .

Let Google educate your customers

F o r m a n y s t a r t u p s t h e g r e a t e s t c h a l l e n g e i s l a c k o f

a w a r e n e s s . P e o p l e s i m p l y d o n ’ t k n o w t h e r e ’ s a s o l u t i o n t o

e m a i l o v e r l o a d . E v e r y o n e s u f f e r s f r o m i t , b u t n o b o d y

s e a r c h e s f o r t h e s o l u t i o n ( t h e s e a r c h v o l u m e f o r r e l a t e d

k e y w o r d s i s ~ 0 ) .

S o w h e n G o o g l e e d u c a t e s t h e m a r k e t o n t h e v a l u e o f

e m a i l f i l t e r i n g , i t ’ s a g o o d t h i n g . G m a i l ’ s P r i o r i t y I n b o x

m a d e o u r p o s i t i o n i n g e a s y : “ W e a r e P r i o r i t y I n b o x t h a t

a c t u a l l y w o r k s ” . N o t a b a d p i t c h t o h a v e .

I f G m a i l w a s t h e o n l y e m a i l p r o v i d e r o u t t h e r e , w e w o u l d

b e a l i t t l e m o r e w o r r i e d . L u c k i l y t h e r e ’ s Ya h o o M a i l ,

E x c h a n g e , O f f i c e 3 6 5 , L o t u s N o t e s ( y e s , t h e r e a r e 1 0 0

m i l l i o n p e o p l e u s i n g N o t e s ) , e t c . W h e n t h e y h e a r a b o u t

c o o l s t u f f G m a i l i s d o i n g , t h e y w a n t i t t o o . W e ’ v e

c a p i t a l i z e d o n t h a t b y m a k i n g o u r s e r v i c e p r o v i d e r -

a g n o s t i c .

I t ’ s e x c e p t i o n a l l y d i f f i c u l t t e c h n i c a l l y , b u t v e r y p o w e r f u l :

“ W e a r e P r i o r i t y I n b o x t h a t n o t o n l y a c t u a l l y w o r k s , b u t

w o r k s o n a n y e m a i l p r o v i d e r , c l i e n t a n d d e v i c e . ”

The re a re l o t s o f t h i ngs t ha t can k i l l a s t a r t up . Goog l e en te r i ng you r space shou ldn ’ t be one o f t hem - i t can ac tua l l y he l p . SaneBox’s l i v i ng p roo f t ha t i t ’ s poss i b l e f o r a sma l l s t a r t up t o compe te w i t h a g i an t , i n t he g i an t ’s backya rd .