Startable – Healy Jones’ & Prasad Thammineni’s Blog

Lincoln Murphy, the well known SaaS Marketing guy, got pretty upset at a recent TechCrunch piece on the freemium pricing strategy that posted this weekend. Lincoln says (I’m on his email newsletter list; it’s pretty good): “In a nutshell the Complete Guide to Freemium on TechCrunch is a post by someone who got lucky enough to get their post accepted so he can get a backlink to his site from TechCrunch and where he takes the results of studies and some words from high-profile VCs and weaves it together into a post for the TMZ of the tech industry.”

Ouch. That’s a little harsh. The article isn’t bad at all. The conclusion is 100% great, actually.

What is Freemium?

However, I don’t think it’s the Ultimate Guide to what is a actually a pretty complicated pricing strategy. I happen to disagree with the author’s ideas that a time based free trial = freemium. I can’t tell if my disagreement is a big deal or not – his company, FutureSimple, has a free trial offer, so it’s hard to know how much of the piece is using that as the basis for the post vs. a couple of professors he references. I disagree with the idea that a free trial is freemium so much because OfficeDrop recently made the switch from a free trial to having a free forever plan and we called it “going freemium.”

My definition of freemium is that a user will have the opportunity to use the service/software/whatever forever without having to pay for it. It may be a limited plan or limited features, it may be ad supported; whatever. It just means you can use it for as long as you’d like without paying. FreshBooks has a freemium model, but you run out of “free” pretty quickly. You can jump through hoops to keep it free, but most likely you’ll upgrade. A free trial that expires after a set number of days doesn’t meet my definition of freemium.

OfficeDrop’s free plan is driven by our mobile distribution strategy. I write a little bit about why we think apps are taking over here. But you should listen to my conversation with Lincoln – I call it “Healy Jones on Freemium.” Our free plan is a free forever plan, with some upgrade triggers baked in – search limits, storage limits, OCR limits. But it’s a pretty good product for free; we are the only company offering free high quality OCR for scanned images coupled with storage. People seem to like the plan… and they also seem to like to upgrade to paid plans. We like that part for sure!

Lincoln is putting on a webinar on kicking butt with your company’s free trials model. I think he’s got some good stuff, so I’d suggest you register!

Android is growing like crazy but it sill lacks that… je ne sais quoi that the iPhone has.

Oh, wait, I know what it lacks. People who download and use mobile apps, a stable and non-fragmented OS and consistent user experience.

Android Eclair - is this robot holding a piece of poop? Nope, it's just another dessert named OS by Android

Anand Rajaram, an OfficeDrop co-founder and our chief product officer, just wrote a piece for Techrepublic called “10 Things I Hate About Android.” Of course, not to be totally negative on Android, the subtitle is “and some work arounds that help.”

OfficeDrop has now released a series of mobile apps on different platforms – our iPhone PDF app, iPad App, Android Scanner App, and the PaperPort Anywhere iOS and Android apps. Anand has led the charge on all of these mobile applications. It was a lot of work! And he also has gotten a pretty deep view into the development and marketing side of these different mobile platforms.

And let me tell you… Android has some problems brewing. If the platform is going to be a serious contender from a mobile app developer perspective then it’s got a lot of stuff that has to get fixed. Anand goes into his top 10 in this article. This includes things that are nightmares for developers and QA people, like the software and hardware fragmentation, security issues, and the problem of getting found in Google Android marketplace.

Let’s hope that Google is able to address and reduce some of the problems. I think they, as a company, are taking this whole mobile thing quite seriously and I’d expect they make significant headway in improving a lot of these things in the coming year.

Anyway, click on the link above to see what Anand has to say about OfficeDrop’s experience developing on the Android platform. It’s a good read.

I’m pretty excited about a new partnership my company has that just launched. OfficeDrop is working with Nuance’s PaperPort desktop filing system to bring the newest version of PaperPort, PaperPort 14, to the cloud.

The team here at OfficeDrop was able to connect our APIs to PaperPort 14′s desktop client, making it simple to right click any folder from within PaperPort 14 and automatically sync all files to the cloud. If you include the mobile apps we developed this means you can right click a folder and the text search, browse and share the folder and it’s contents from your phone. It’s pretty cool and the tech press seems to be getting it. You can buy PaperPort 14 at paperport.com, where you can also sign up for a free PaperPort Anywhere account. And the mobile apps are here:

• PaperPort Anywhere iPhone and iPad App
• PaperPort Anywhere Android App

Obviously preparing for this was a ton of work, which is why I’ve been totally silent on the blogging front. Hopefully now that we are launched I”ll have time to get back to posting more frequently!

Below is the press release by Nuance talking about PaperPort Anywhere.

Nuance Launches PaperPort Anywhere Cloud Service

Making it Easy for Millions to Organize, Access and Share All of Their Paper and Digital Documents, Anywhere and Anytime

BURLINGTON, Mass., August 2, 2011 — Nuance Communications, Inc. (NASDAQ: NUAN), a leading provider of speech and imaging solutions, today introduced PaperPort® Anywhere, a new cloud-based service that makes it easy to organize, access and share documents from nearly any PC and mobile device. PaperPort Anywhere lets users manage and access their documents in the cloud using web browsers, as well as using free apps from Nuance for Apple® and Google® Android® mobile devices.

The service uses the market-leading Nuance OmniPage® OCR (optical character recognition) engine to automatically create searchable documents from scanned and camera-captured documents, as well as faxes, making paper content as easy to search and find as digital documents. As a result, users can organize, access and share all of their document content on PaperPort Anywhere.

“There is a reason that recent surveys show over 51% of people still use paper files – it is in large part because current cloud services treat paper content as an afterthought,” said Robert Weideman, vice president and general manager for the Nuance Document Imaging Division. “PaperPort Anywhere goes further than other services by closing the content gap between paper and digital documents – making it easy to scan to the cloud, improving the way users manage both their scanned and digital documents, and by making cloud access easy and convenient.”

PaperPort Anywhere also integrates with the new release of Nuance PaperPort 14 for Windows®, the world’s most popular scanning and document management application for the PC, which was also announced today. PaperPort 14 provides automatic synchronization of Windows folders and files with PaperPort Anywhere. It also adds conversion of scanned and PDF documents into fully formatted word and spreadsheet files that can be edited on Windows, the Macintosh and through cloud services such as Google Docs and Microsoft Office 365. PaperPort 14 provides robust PDF capabilities, including the ability to create PDF from practically any application, and includes PDF-MRC, which creates scanned files that are up to eight times smaller than scanned PDF files without compression.

PaperPort Anywhere is valuable to anyone that works with documents, including the over 20 million registered users of Nuance desktop applications, and users of the more than five million seats of PaperPort that are deployed each year. PaperPort Anywhere includes free apps for Apple iPhone, iPad and Google Android devices, and is free for up to one gigabyte of searchable storage space. PaperPort Anywhere subscription plans include $9.99 per month for 10 gigabytes and $24.99 per month for 50 gigabytes of storage space.

PaperPort Anywhere Key Features and Benefits

PaperPort Anywhere makes it easy to organize, access, and share any document – both paper and digital – anywhere and anytime. Key features and benefits include:

• Organize All Your Documents in the Cloud. PaperPort Anywhere is more than cloud storage – it provides a better way to organize and use your documents. PaperPort Anywhere’s thumbnail and clip views of paper and digital documents are key features that help you quickly organize documents.
• Search and Find both Paper and Digital Documents. PaperPort Anywhere is powered by the Nuance OmniPage OCR engine, which provides the highest levels of accuracy for scanned documents and image PDF files, such as those from fax services. The best OCR means users can find indexed paper documents just as they do Word and spreadsheet files.
• Access and Use, Anywhere and Anytime. PaperPort Anywhere is accessible through any web browser at www.PaperPort.com, the web gateway to PaperPort Anywhere cloud services. Nuance also provides free apps for the Apple iPhone®, iPad® and Google Android devices, and supports Microsoft Windows through PaperPort 14.
• Share and Collaborate. PaperPort Anywhere makes it easy to share links to files stored on the site. The service also supports secure and permission-based emailing of files into PaperPort Anywhere accounts, making it easier than ever to collaborate and share documents with others.
• One Click Scan to Cloud. Only PaperPort Anywhere integrates with PaperPort 14 – the world’s most popular scanning and document management application for the PC. The combination results in unmatched document productivity and convenience.

Pricing and Availability

PaperPort Anywhere with up to one gigabyte of searchable storage is free. PaperPort Anywhere Premium with up to 10 gigabytes of storage is $9.99 per month and $24.99 a month for 50 gigabytes of storage. For additional information on PaperPort Anywhere visit www.PaperPort.com.

About PaperPort Anywhere

PaperPort Anywhere is a new, innovative cloud service from Nuance that makes it easy to scan, organize and share documents – anytime, from anywhere. PaperPort Anywhere is powered by OfficeDrop. It delivers enhanced search-indexing capabilities using Nuance OmniPage OCR.

Nuance Communications, Inc.

Nuance Communications, Inc. is a leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.nuance.com.

Trademark reference: Nuance, the Nuance logo, and OmniPage and PaperPort are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other company names or product names referenced herein may be the property of their respective owners.

# # #

Media and Industry Analyst Contact:

Jennifer Shelgren

Nuance Communications, Inc.

Tel: (781) 565-4758

Email: jennifer.shelgren@nuance.com

Interesting research from Flurry again (they were the ones who put out the info that mobile app usage is topping regular web browsing). This time they have data showing that free or “freemium” app titles are generating more revenue than pure paid apps. From a MediaPost summary of the research:

Flurry shows that over the last six months, revenue from free-to-play game apps has overtaken that from paid apps. Among the top 100 grossing games in the App Store as of June, more than two-thirds (65%) of the revenue generated came from freemium games and 35% from paid games.

That’s nearly opposite the situation from six months ago, when paid game apps accounted for 61% of revenue and free titles, 39%. What’s changed since January? Peter Farago, vice president of marketing at Flurry, pointed out that Apple began counting in-app purchases toward app gross revenues at the end of 2010, reflecting the impact of that sales stream in its ranking of top-grossing titles.

Free apps generating more revenue than pure paid apps

So, this research is focused on games, but OfficeDrop is betting the same will be true for our b2b SaaS app. We switched to a freemium model earlier this week, mainly driven by the feedback we were getting in the app stores. App store people just expect to try stuff for free and don’t like free trials. We can’t get them to read the app description that talks about the free trial period; they just look at stars, download and then leave a nasty review without trying the service. Hopefully this freemium experiment will pay off for us. Initial web signups are promising, but it’s too early to tell!

Ok I’ve got to brag a little here. OfficeDrop recently launched our newest mobile app, the OfficeDrop Android Paper-to-Go app, and we’ve had great success with new users and downloads. I’m working on a post about how SEO may be dying, at least for SaaS services, since the huge majority of our new users are coming from app marketplaces these days. I really think we are undergoing a significant shift in the way people find and buy software and web services… and I’m personally having a ton of fun trying to figure it out!

Anyways, here is some of the recent press OfficeDrop has gotten on our new Android app:

May 18, 2011

OfficeDrop: Scan Docs, Turn Them into PDF & Make Searchable (Android)

Using Paper-to-Go you can scan physical documents using your smartphone’s camera and store these documents … other file formats can be uploaded and processed as well. Read OfficeDrop’s Paper-to-Go Review on makeuseof…

Yup, we updated our home page again! OfficeDrop’s new home page is an attempt to get our potential users into a more specific sales funnel more quickly. As we’ve grown and expanded our product line it has become confusing for our new site visitors to find the particular service that they are looking for.

I’ll update when we figure out if the change actually helps improve conversion. Wish us luck!

What is going on with the Massachusetts technology VC scene? While the rest of the US seems to be recovering nicely from the VC nuclear winter of death, Boston is lagging. Check out this chart of quarterly VC technology deals from Q4 2009 to Q1 2011 by CBInsights:

Is it just me, or is it odd that the dollar total for MA dropped by over $100 million while New York City increased by well over $150 million? Those are big swings, and I’d hope that the two would move in tandem – but obviously they are not!

The deal total for MA has held pretty steady for the past few quarters, ranging from 39 to 43… but NYC is doing a great job crossing the 50 deals per quarter barrier for the past two quarters.

I like to think of the two ecosysems as pretty highly correlated, with people moving back and forth or traveling back and forth on Acela pretty regularly. For example, OfficeDrop’s investor is from NYC but he’s up in Boston one a month and is open to making investments anywhere along the Acela train line. I know for a fact that Boston VCs are actively looking in NYC for investments – but are they still looking in Boston?

Something doesn’t quite jive here for me. I’m seeing a ton of interesting seed stage internet companies in Boston getting traction and funding. But are we missing out on the current internet bubble?

Checkout the CBInsights post here.

OfficeDrop announced a funding round on April 1st. As in April Fools day. I think someday I’ll do a post on tips for doing an April Fools joke press release, because we kind of messed up a little. Who knew that the newswire distribution agencies wouldn’t publish fake news that OfficeDrop rejected a, like, $6 billion acquisition from Google?

Anyway, here is the press release on our actual funding round:

OfficeDrop Announces $1 Million Funding Round to Support Major Advancements in Product Development

OfficeDrop’s Digital Filing Technology Enhancements Fuel Rapid User Growth, Record Momentum

CAMBRIDGE, MA - (April 1, 2011) – OfficeDrop today announced a $1 million round of angel funding led by White Owl Capital, which will be used to support product development and marketing for the company’s digital filing and scanning software. The investment comes on the heels of the company’s rapid expansion from a mail-in scanning service to Web and desktop applications that enable customers to scan to and manage documents in the cloud. OfficeDrop has seen more than 6,000% growth in customers since evolving its model from a mail-in only service to a combination mail-in and self-service scan-to-cloud software.

Prior to securing this round of funding, OfficeDrop made major advances to its product suite. In 2010 alone, the company announced the following developments:

• ScanDrop, a desktop scanning application for Windows and ScanDrop Mac that connects most scanners directly to popular cloud storage providers
• The OfficeDrop digital cloud filing system, an extremely popular scan-to-the cloud online storage for small businesses
• OfficeDrop Paper to Go, an iPad application to manage, search and share documents from anywhere
• Partnerships and integrations with the leading cloud storage applications including Evernote, Dropbox and Google Docs as well as popular small business software such as QuickBooks and FreshBooks.

“OfficeDrop’s technology is incredibly practical, and is driving the transition from paper to the cloud - a market that’s on path to be worth tens of billions of dollars,” said David Mars, partner, White Owl Capital. “Small businesses and consumers alike will continue to move important business functions to the cloud, and digitizing paperwork is one of the first steps to getting organized and saving money.”

The funding will also be used to continue the company’s growth into traditionally paper-heavy industries, including accounting and financial services, legal, insurance and real estate. Businesses continue to adopt public cloud computing technologies, with U.S. business cloud spending expected to increase by 112 percent between 2010 and 2014 (source: In-Stat). OfficeDrop will continue to invest in mobile app development, as well as consistent technological advancements to its current line of products.

“Every industry deals with the burdens of paperwork. Small businesses and consumers now have a way to easily organize these documents, and can access, share and edit their documents from nearly any device, anytime, anywhere. We make it simple: scan, organize, send directly to the cloud and find your information at your fingertips, anywhere you go. It’s that easy,” said OfficeDrop CEO Prasad Thammineni.

To download ScanDrop for Mac, visit the Mac App store. ScanDrop for Windows is also available for download on the OfficeDrop website. Learn more about mail-in scanning and document scanning to the cloud on OfficeDrop’s website.

I was recently quoted in a couple of places on how OfficeDrop treats customers, and also about how we made some mistakes when we first started the OfficeDrop Document Management Blog. It’s fun to speak with other bloggers and let them know some of the things I’m learning at OfficeDrop as we grow the business here! I can’t believe how much more effective I am today than I was just one year ago.

Ways to Keep Your Long-Term Customers Happy by Zendesk – For SaaS businesses, existing paying customer retention id critical, and OfficeDrop tries hard to keep our existing customers happy with our service. The Zendesk blog post talks about how we ask “best customers for advice and involves them in big decisions.” And also “OfficeDrop also involves existing customers in new product development, in the form of beta testing. “They are excited to see the new stuff that we are cooking up, and it is fun and exciting for them to be the very first people to try new things.””

Top 5 Mistakes to Avoid on Your Company’s Blog on Mashable – This is a great post on Mashable about simple mistakes company’s make when they start blogging. We are quoted about how we originally did not effectively link back to the OfficeDrop main site when we first started blogging, but there are some other great tips on here about how to be a better blogger.

Anand Rajaram, co-founder of OfficeDrop, (i.e. my coworker) recently penned a piece on Kissmetric’s blog about how we almost doubled the conversion rate of our pricing page. Check it out!

Obviously this is very important for a SaaS company!