On Pricing

activeCollab: The difficulty of switching from free to paid

activeCollab had become known as the free, open source, competitor to Basecamp. They’re now about to launch a new version of their product and start charging for it. The problem with this is that so far they’ve attracted people who are interested in a free product; people who don’t want to spend the money on Basecamp. They’ve built a strong community around that. They have the attention and goodwill of the community, but they’re wasting it by using a bad pricing strategy. To buy activeColab you pay a one-off fee of ~15x the monthly cost of an equivalent Basecamp price plan, plus ~3x the monthly Basecamp cost per year for updates and support. Here’s how I’d have tackled it:

• Keep activeCollab free for all non-commercial use, with no limits.
• Offer a support package for non-commercial users at a reasonable price (say $99 one-off). This would be for installation assistance etc.
• Launch a new commercial version of the product under a new name - “ultraCollab” (or similar), using the pricing they’ve recently announced.