Should I give my product away for free in the beginning?

I own a website service that teaches people a language in a fun way (just one language for now). There are over 50 lessons now and members compete to earn the most points by completing a quiz game.

Our second week in, we have 480 new free members and 10 paying $9/month. Free members currently get access to 8 lessons and our answers community which is much like this site, but simpler. We've had excellent feedback so far. The upgrade offers the ability to save/organize vocabulary and view all lessons without restriction.

We still have some major features to roll out in the coming months as well as iterative improvements to the service. I anticipate the features that are coming are going to be even more useful and engaging for users than what is already there. We definitely have improvements to make though.

My question is this: given our situation, should we give away more for free? What would you do to grow this thing? I have a feeling that if we opened it 100% for free now, it would get a lot more attention... but I don't know if members will pay later.

We are boot-strapped and don't have a lot of money to burn. Revenue is very important to us in the short and long-terms.

Thanks if you can help!

“should we give away more for free?” YES

That’s a great way to grow your network, and this early in the life of your business that should be one of your priorities. You can have the best service available at an incredibly cheap price, but if no one knows about it, it’s not going to help you.

Also, the more users you have, the more feedback you’ll get. That feedback is worth a lot in itself because it allows you to shape your service to mirror what users really want. Which means you’ll be able to charge more later on.

You have options though. Two that come to mind quickly:

1) Make the service completely free for a trial period, say 30 days, after which time the user can choose to pay to keep getting the service.

2) Give it away for now, but plan to charge for the service later once you’ve rolled out the improved features you’re working on. If going this route, make sure you state this upfront so you don’t catch your users off guard.

I think the tiered pricing system is a good strategy, but right now you should focus on growing first.

Take a look at Neil Davidson’s free downloadable book Don’t Just Roll the Dice on software pricing.

For our new SaaS offering we're giving it away for free for the entire duration of the beta (3/4 months). That helps us getting feedback and visibility. Well, at least that's the intent as we have launched last week...

We also give incentives to try the beta, as we'll offer to all participants the first year of service (out of beta) at a discounted price. Also, we'll allow a free, no-credit-card-required 14-day trial period.

One thing: make it very clear what are the features that you are planning to add, as some users will want them and knowing they're coming will increase trust in you.

First I would figure out what revenue target would make me profitable and then figure out how to charge for the service. Try to keep your pricing model simple. You would to make the conversion from free to paid as frictionless as possible.

Also, you might want to try and write fun and engaging articles about your service or industry. This will act as a funnel to drive potential customers to your site. It will also help your site in regards to SEO also.

Try to focus on the benefits of your site vs the features. I'm more likely to visit your site and signup from a headline like "Learn Aramaic in only 14 Days" vs a feature of "save/organize your vocabulary". Sell on benefits vs features.