A big failure by Sean Ellis with a happy end

One day Sean Ellis, who coined the term "Growth Hacking", decided to expand market presence by significantly improving the free version of the freemium platform - Qualaroo (a widget for online surveys).

The idea was simple: the better the free version is - the more people will install it - the more widgets will promote their "Powered by Qalaroo" badge for free - the more new users they will attract.

Results:
A total failure. It did not lead to a significant increase in demand.

Takeaway:
This failure showed - there’s very little price sensitivity for this product, and very little price sensitivity is a good thing! So they killed the free version completely.

Sean Ellis says: “We really started investing in product a lot more, kept raising the price over time, and completely re-engineered the product and made it something that validated that premium price. Pricing became our most important growth lever in that business. That was the discovery that we got off of the failed experiment.”

Now companies like Groupon, Starbucks, Uber, Spotify, HootSuite, Yahoo, Shopify, plus another 20,800 websites pay $199 - $2250 for Qualaroo on a monthly basis.

Source: blog.mixpanel.com


Cheers,
Charlie Patel ;)



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