When This Company Switched From Free To Fee, Their Customers Disappeared Overnight

Matt Meeker Polaris Dogpatch

Photo: Meetup

We recently met up with Matt Meeker of Polaris Ventures.  He’s Entrepreneur in Residence of Dogpatch Labs, and he’s also the cofounder of Meetup.We asked Meeker how Meetup got away with charging their customers for what used to be a free service.

“We were really fortunate to have Pierre Omidyar on our board [the founder of eBay],” Meeker explained. 

“He’s the one who really pushed us to begin selling our service.  Scott [Heiferman] and I were both concerned; we weren’t sure how member growth would be effected.  We assumed a pay wall would stall growth, because it’s an additional (significant) hurdle.

“But Pierre was confident in the paying model and he predicted exactly what would happen.  He said customers would be livid at first. They’d threaten us, trash us, and nearly all of our them would disappear over night.  After that, Pierre was confident our customers would start coming back. 

“That’s exactly what happened.  The big lesson from Pierre was realising that a paywall would create a growing group of evangelists for the company and cause member growth to actually accelerate. Now Meetup is more profitable than ever.”

Here’s our video interview with Scott Heiferman about how he started charging for a free product and got away with it >>

Here’s how to make the freemium model work for your business >>

NOW WATCH: Ideas videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.