🗞 What's New: A founder's guide to creating free trials

Are you thinking about running free trials?

• Free trials can be a great way to increase your MRR, but only if used strategically. If you're looking to build an effective trial program, check out these tips below!
• Planning to develop, or invest in, tokens? This guide is a crash course on tokenomics, including the functions and core elements of a token.
• Founder Simon Høiberg's e-books bring in at least $5,000 a month in passive income. Here's his formula for creating and selling your e-books and courses on autopilot.

Want to share something with nearly 90,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

🆓 A Founder's Guide to Free Trials

by Sukhpal Saini

Free trials are a great way to increase your MRR. Here's how!

Who should run free trials?

Giving your customer a timed subscription to your product, in hopes that they will start paying after it ends, can be risky. Free trials work best for:

• Founders whose product is extremely intuitive.
• Founders who can connect with the person actually making the purchase decision. In other words, if a company representative seeking a free trial has no purchase power, your trial will be wasted.

Creating an effective trial

Do:

1. Clearly outline an "A-ha!" moment within the first 15 minutes.
2. No empty states, ever! Add sample data and templates, or make data entry part of the onboarding process.
3. Send regular reminder emails about the trial ending.
4. Nurture users with educational material.
5. Craft a stellar onboarding experience.

Don't:

1. Ask for a credit card upfront. Use Google Captcha to deter scammers.
2. Auto-charge people. Customers hate this, and Stripe punishes it anyway.

Heads up!

1. You will get a flood of support requests. Have a full FAQ prepared.
2. A user on trial is not yet a paying customer, but they'll still need storage space, customer support, and onboarding. Be prepared to lose money until enough of them convert. For sustainability, you can price the product to offset this expense.
3. Final price = Price of product + cost of covering a trial. This assumes that all of your trials convert to paid. This is not reality. You will have to calibrate the formula with your own conversion rate to stay afloat.

Measure everything

Collect data, regardless of whether someone converted or not. Keep a log of:

• Who the customer is.
• What they came for.
• What they did.
• Whether they converted.
• What will they do now.

If you tracked the customer throughout their trial, this is what their journey should look like:

Crunch the results

If your conversion rate is:

• Low: Your customer didn't find value. Iterate and improve your product.
• High: Pour more resources into user acquisition, and lower your customer acquisition cost (CAC).

Tools

There are many helpful tools that you can use, but here's a quick list of those that I like:

• User onboarding: Appcues.
• Product tracking: Mixpanel.
• In-app surveys: Hotjar.
• Email campaign: Drip.

Technical implementation

Implement a trial system for your app:

1. Create a "trial ends on" date in the user database model that saves the day when the user's trial will be over.
2. Set this field for seven days ahead (if the trial lasts seven days) when the account is first created.
3. When the user logs in, check their user object to see if the date has passed. If so, display a payment screen.

Ending the trial

Be intentional about collecting user feedback that is helpful and actionable. Your follow-up methods will determine this.

Also, even if a user can't convert at the end of the trial, there are other ways to keep them engaged.

You can run an offer such as: “Give us a shoutout on Twitter and get $5 off!” or “Get $10 off for every friend that you refer!”

Freemium?

The freemium model works for some founders. I believe that freemium should only be used if:

1. The cost of servicing the customer (support, set up, storage, etc.) is minimal.
2. You're looking to align your incentives with your customer's.
3. Your conversion rate is high.
4. You have enough funding to sustain losses at the start.

Check out my full report on free trials at SaaSBase!

Your free trial quick tips

Bharadwaj Giridhar, founder of Crewcharge, provides this concise checklist:

1. Visualizing "A-ha!" moments: Ask customers what their goal is for the product. Drive X conversions with a Y ad campaign, then use email campaigns to visualize progress.
2. Capture why users exit: When using low CAC channels, there's a huge chance that you're wasting effort targeting the wrong audience. Split users into silos and determine your one ideal customer. Then, double down on an ideal customer profile that you can acquire at this stage, and figure out who's not worth the spend.
3. Follow the customer journey: How closely does the product align with their goal? Are they using the tool in the first place? What features did they sign up for? Are they using those features? If not, ask why.
4. Understand that every customer is different: A good SaaS product tries to capture a wide audience, but your users sign up for one feature that they can't live without (and other "nice to have" features).
5. Beat the Steve Jobs bias: Before you build a feature, add a button or trigger that users may, or may not, click. When they click on it, ask them how they would use the feature.

Have you had success with free trials? Share your tips in the comments!

Discuss this story.

📰 In the News

from the Volv newsletter by Priyanka Vazirani

🏰 Disney is building planned residential communities for fans.

😣 Tech companies are facing a hiring crisis spurred by the ongoing pandemic.

🔎 Google plans to overhaul ad tracking on Android phones.

🤖 AI-led job interviews are gaining momentum among companies.

👓 Shopify is bringing online retailers into the future with AR.

Check out Volv for more 9-second news digests.

🪙 Tokenomics 101

by Tudor Barbu

Tokenomics is the analysis of the economics of crypto tokens or cryptocurrencies. It refers to all of a crypto token's characteristics that make it desirable to investors. Understand tokenomics before investing in, or developing, your own token. Let's dive into the basics!

Tokenomics 101

A token is a crypto asset issued on top of a blockchain. Before you invest in a cryptocurrency project, it's advised to thoroughly research and analyze it in order to determine the risk of the investment.

It is essential to examine why a token has value, and why it has reached its price. By looking at different aspects that describe the world of cryptocurrencies, tokenomics provides an answer to the economizing issues of tokens and their functionality in the blockchain environment.

Lately, there has been an influx of tens of thousands of new tokens in the market. A token will be successful and appreciated over time only if it has good tokenomics. Developing proper tokenomics is crucial to creating a token that reflects the growth in value and protocol utilization. The most important thing is to understand how the token will be used.

Token functions:

• Access to a product or service.
• Value exchange.
• Voting, governance, and ownership.
• Property rights.
• Control, reward, and discounts.
• Payment unit, profit distribution, and security.

Core elements

1. Distribution and allocation: In pre-mined token launches (ICO), investors, developers, select individuals, and organizations are granted tokens before the public offering. A fair launch is when a cryptocurrency is mined, earned, owned, and controlled by the whole community.
2. Token supply: The circulating supply of a token is the number of tokens that have been published so far, and are currently in circulation. The max supply of a token is the maximum number of tokens that can ever be generated (mined or minted).
3. Market cap(italization): This is an essential factor to think about before you invest. It's calculated by multiplying the number of tokens in circulation (supply) by the current market price of a single token. A lower market cap might suggest that the cryptocurrency has more potential to grow. Large-cap tokens might be a more secure investment, but their growth possibility tends to be smaller. Check out more about market capitalization here.
4. Inflationary vs. deflationary: An inflationary token doesn't have a maximum supply, and will continue to be produced over time. In a deflationary token standard, the maximum supply of the token is locked. If many tokens are in supply, there's an excess. Whenever there's an excess, a price decrease follows.
5. Rewards: Often, token projects give rewards to users and investors for contributing to the network. Incentivizing the miners (proof-of-work model), securing the network (proof-of-stake), or just confronting the inflation are a few reasons to offer rewards.
6. Utility: Don't forget about the utility of a token! Does the token make sense in blockchain?

Tools

Here are some essential tools to help you research crypto projects and tokenomics:

• Viewbase: Live inflation rates of cryptocurrencies.
• StakingRewards: Data provider for staking, and analysis of staking rewards.

You can read the full article here!

Do you build tokens? Share your experience below!

Discuss this story.

🧠 Harry's Growth Tip

from the Marketing Examples newsletter by Harry Dry

My favorite social proof pattern:

Go here for more short, sweet, practical marketing tips.

Subscribe to Marketing Examples for more.

📚 Simon Høiberg Hits $5K MRR in Passive Income

by Simon Høiberg

Hey indie hackers! I'm Simon Høiberg, and I managed to build a $5K MRR income stream that is now running passively. It's completely on autopilot! I currently sell two e-books, both on the topic of software development.

I wanted to share this success story with you, including some insights that you can use to replicate it.

The setup

I sell e-books by running ads on Facebook and YouTube. It sounds simple, but there's a few tricks to making this work.

The problem

If you've ever tried selling a digital product online, I'm sure you're familiar with this pattern:

• Week one: Full of sales.
• Week two: Drastically decreased sales.
• Week three: Crickets.

That's not what we want. We want a consistent flow of sales without having to constantly pump our social channels with plugs.

The solution

Run ads! That's the key. And it works really well.

The suite that we want consists of:

1. A product on the lower end of the price range: I'm talking $10-30 here. Selling courses at $200+ is significantly more difficult, and it requires a lot more experience, with a more advanced campaign setup.
2. A landing page that is optimized for selling ads: Don't use Gumroad or similar platforms. You need a custom landing page.
3. Conversion campaigns on Facebook and YouTube: This includes installing their pixels and trackers on your landing page.
4. Nice, eye-popping visuals that make people stop scrolling.

I have been using this simple setup for almost six months now, and I make $5K MRR in profit on average (and have been peaking at around $10K in good months).

The profit margin is around 80%. It works!

How to get started

First, you need a product. Don't overthink this. Create a short, concise e-book where you share your expert knowledge.

Second, you need to create a landing page. Use Webflow, Wix, or Shopify (if you're not a programmer). Again, no need to overthink it.

Next, you need to craft some great ads. I prefer using Figma, but Canva is a great choice as well.

Finally, set up a conversion campaign. If you've never done this before, there's a slight learning curve on both Facebook and YouTube, but it's honestly not that bad. In my experience, Twitter's ad platform is extremely primitive compared to Facebook and Google (YouTube).

It's hard to optimize against conversions. You can't, really. On Facebook and Google, users are used to ads and find them quite useful. They are there promoting something that you actually need or want. On Twitter, not so much. They show almost arbitrarily, leaving everyone annoyed.

Generally, I only use Twitter's ad platform to A/B test ideas. Because the verification process is so easy, you can spin up a campaign and quickly test out a few ideas in a snap. It's useful for that, but that's about it.

What to write about

Here's how to decide what to write about in your e-book:

1. There should be an audience. Don't worry, there almost always is.
2. The book should practically write itself. Pick a topic that you know so well that you can write it in your sleep.
3. You should be able to provide value in 80 pages or less. Selling lightweight resources at a lower cost typically works better than something heavy and comprehensive, at least for this particular system.

You can check out the full breakdown of this setup on YouTube for more information. I go into more detail on how to craft a great ad, what your landing page must consist of, and how to make sure it converts.

I hope you got something out of this little read!

What are your tips for creating a passive income product? Share below!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

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Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to Sukhpal Saini, Priyanka Vazirani, Tudor Barbu, Harry Dry, and Simon Høiberg for contributing posts. —Channing