Revisiting the fallacy of freemium: A year on

It turns out free wasn’t the (entire) problem.

I wrote about our decision to kill Equals' free plan a year ago. The fallacy of freemium in SaaS resonated with many founders grappling with pricing and go-to-market strategy. At the same time, it garnered criticism from skeptics who thought we were being naive. It stirred the pot so much that Lenny asked to feature it. A year of hard-earned lessons later, our thinking has evolved. 

Here's the thing - I still believe most of what I wrote in that post. But there was a blind spot in our thinking… that we've only recently begun to understand.

Killing freemium didn't just mean removing our free plan; we had to evolve further. 

Going all in on things that don’t scale

After killing our free tier, we kept a paid self-serve path to using Equals. It was working (to a certain extent), but we felt we weren’t learning fast enough. We were also too far from our prospects and customers. 

Folks were signing up and making it through our funnel, but we still couldn’t quite articulate what great customers looked like and what made them stick around. So we went back to basics.

We started with our GTM motion. We required, and still do, every prospect to jump on an onboarding call with us. Because not all friction is bad.

Equals’ signup flow - November 2024

This enabled us to learn so much faster. We could tangibly feel the many problems that led to freemium not working and more deeply understood how to solve them. Ultimately, we simply didn’t know what use case(s) were most valuable with Equals. 

In this onboarding-first, higher-friction world, we got to speak to everyone with enough intent to get on a call with us. They had a problem dire enough that they were willing to dedicate time to talk to someone about it. From there, we started to hone in on which use cases made the most sense for Equals to solve. We saw patterns emerge from those who didn’t progress and those who effectively ripped the product out of our hands. 

More importantly, as we went back to manually onboarding every customer, we got in the trenches with them, digging into the details of their needs and building things for them. It was through this “unscalable” work that we identified patterns. Those patterns - e.g., a lot of SaaS companies need help with their ARR reporting, SaaS metrics, and pipeline reporting - turned into repeatable onboarding motions. Modules that we now offer and are actively developing templates for, like our ARR Build Blueprint for Stripe.

Free wasn’t the (entire) problem 

Turning off self-serve accelerated our realization that we needed to verticalize because building and taking a horizontal product to market is hard.

It’s now clear that a big part of our problem with freemium was that we were simply putting too much of the burden on users to figure out how to get value from Equals. We dropped them into an empty workbook with a datasource connected, with a lot of work to get from that state to a ready-built analysis. Go figure. 

And while we don’t yet have enough conviction to actually go back to freemium, we do now have enough conviction to go back to self-serve. So, this time around, as we get ready to (re)open a self-serve path to trying Equals, we’re excited about the modules we’ve built to clean up people’s data (from Stripe to begin with). They actually deliver on the promise of immediate value—with plug-and-play templates and pre-built dashboards that teams like Descript, Attio, and Oso rely on day in and day out.

It was only in going through the past year of manually onboarding every prospect that we’ve learned how even to be able to do this. The real victory wasn't in killing freemium but in finally understanding how to make our customers successful.

As we continue building Equals, we're taking this lesson to heart. Right now, we’re laser-focused on ARR reporting and SaaS metrics, but in the future, we’ll expand use case by use case, ensuring we nail each one before moving to the next.

It might not be as flashy as "open the floodgates and watch them come," but who cares? It's working.