Transitioning from free pilots to a paid product14 May 2020
We launched our mock interviewing tool in late January of 2019. This initial product was pretty basic, but we had honest interest from a handful of job training programs. We ended up running about 10 free pilots over the course of 4-5 months. Transitioning from free pilots to a paid product was messy and awkward.
Here’s a photo of me doing a pilot kickoff at Dress for Success Northern NJ:
I got into this business by thinking that voice is a much better interface than text for many job seekers. I still think that. My plan was to give out our automated mock interviewing tool for free, provide value to a lot of job seekers, and then bring on employers to start connecting them via an online recruitment marketplace. But within 4-5 months of running free pilots, I realized that my strategy likely wouldn’t work. Why?
- Convincing and then onboarding organizations to a new product is a slow process, and as a self-funded business, I needed to get to breakeven as quickly as possible. At the Next Gen Summit, David Rose, a prominent angel investor, said that the top 5 rules of entrepreneurship are all the same: don’t run out of money. If we wouldn’t be paid until enough job seekers were using Talk Hiring for employers to be interested, we wouldn’t be able to even attempt to generate revenue for an additional 6+ months. By charging for the product now, I would be able to de-risk the financials while still leaving the future goal of working with employers on the table.
- We were able to sign on some national programs that work with thousands of job seekers as pilot partners. But, every large program understandably wanted to pilot the tool with only a segment of their organization. Even if we ran successful pilots, our growth within organizations would be slow moving.
- It was an awkward process for our pilot partners to run a free pilot for a free tool. We set up the pilot process really as a way to learn about how to make the product better in a controlled setting. But, it’s hard to really take a pilot seriously when, after the pilot, the pricing is $0. By charging something for Talk Hiring, partners take the free trial more seriously because they know that they’re going to have to gather strong evidence to convince the team to eventually buy this tool.
When did we transition from free pilots to a paid product? Once we had testimonials from happy users, a product that a few job training programs seemed to be getting value out of, and a small study to measure the effectiveness of the tool.
Why was it awkward/messy? I thought that the Talk Hiring mock interviewing tool would be free forever, and all of our pilot partners did too. I had to communicate why we were changing our strategy with each pilot program, inform all upcoming fall pilots of this change, and figure out how to price the product for the innovators that took a chance on me and this brand new tool. About half of the programs that had really used the tool during the 3-month pilot program paid a (very discounted) price.