what happens when google offers your product for free?

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G o o g l e ffers your product for fre What happens when

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In 2010, Gmail announced Priority Inbox, which does exactly what we do - prioritize emails. That was a scary day for us, but we've come a long way since then.

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Page 1: What Happens When Google Offers Your Product for Free?

Googleoffers your product for free?

What happens when

Page 2: What Happens When Google Offers Your Product for Free?

You know how eve ry VC asks “wha t happens

when Goog le ge t s i n t o you r bus i ness? ” .

Goog le has had a l ong h i s t o r y o f ge t t i ng i n t o new

marke t s , o f f e r i ng se rv i ces f o r f r ee , and hop ing t o

mone t i ze t hem v ia i t s cash cow – pa id sea rch .

He re a re t he reasons we ’ re no t wo r r i ed , and you

shou ldn ’ t be e i t he r .

Page 3: What Happens When Google Offers Your Product for Free?

YOU GET WHAT YOU PAY FOR

Page 4: What Happens When Google Offers Your Product for Free?

I n 2 0 1 0 , G m a i l a n n o u n c e d P r i o r i t y I n b o x , w h i c h

d o e s e x a c t l y w h a t w e d o – p r i o r i t i z e s e m a i l s .

T h a t w a s a s c a r y d a y f o r u s : h a l f o f o u r b e t a

u s e r s l e f t . S i n c e t h e n , m o s t o f t h e m c a m e b a c k ,

a n d t o d a y 6 0 % o f o u r c u s t o m e r s a r e o n G m a i l , a n d

p r e f e r t o p a y u s m o n e y f o r s o m e t h i n g G m a i l

o f f e r s f o r f r e e .

Page 5: What Happens When Google Offers Your Product for Free?

W e h a v e b e e n k e e p i n g a c l o s e w a t c h o n G m a i l Ta b s .

T h a n k f u l l y t h i s e l i c i t e d e v e n l e s s r e a c t i o n f r o m o u r

u s e r b a s e t h a n P r i o r i t y I n b o x .

O u r a l g o r i t h m s a r e m o r e p e r s o n a l i z e d t o e a c h

p e r s o n ’ s b e h a v i o r , w h i c h r e q u i r e s p r o c e s s i n g a l o t

o f d a t a i n r e a l t i m e ( n o t s o m e t h i n g y o u c a n d o o n

t h e c h e a p ) .

O n e o f t h e r e a s o n s t o c h a r g e f o r y o u r p r o d u c t s i s i t

a l l o w s y o u t o b u i l d b e t t e r p r o d u c t s ( D e a t h t o

F r e e m i u m ! ) . G o o g l e d o e s n ’ t h a v e t h a t l u x u r y. U s e i t

t o y o u r a d v a n t a g e a n d c o m p e t e w i t h G o o g l e o n

v a l u e , n o t p r i c e .

Page 6: What Happens When Google Offers Your Product for Free?

LET THE BEST MAN WIN“in your segment”

Page 7: What Happens When Google Offers Your Product for Free?

C a n G o o g l e o f f e r a b e t t e r e m a i l f i l t e r i n g

p r o d u c t f o r f r e e ? M a y b e . H o w e v e r, o u r

b u s i n e s s i s e v i d e n c e t h a t i t i s p o s s i b l e f o r

D a v i d t o b u i l d a b e t t e r p r o d u c t t h a n

G o l i a t h – a t l e a s t f o r a p a r t i c u l a r s e g m e n t .

Page 8: What Happens When Google Offers Your Product for Free?

I n e v e r y l a r g e m a r k e t t h e r e a r e l o t s o f s e g m e n t s .

O u r s i s p r o f e s s i o n a l s w h o v a l u e t h e i r t i m e a n d

a r e h a p p y t o p a y f o r b e t t e r p r o d u c t s .

I f s o m e o n e i s h a p p y w i t h a f r e e v e r s i o n ( o r c a n

o n l y a f f o r d t h e f r e e v e r s i o n ) , t h e y a r e n o t o u r

t a r g e t c u s t o m e r. I f t h e y ’ r e u n h a p p y w i t h t h e f r e e

v e r s i o n - t h e y w i l l l o o k f o r u s . I f t h e y a r e o k w i t h

t h e f r e e v e r s i o n , b u t w a n t s o m e t h i n g b e t t e r – i t ’ s

o u r j o b t o g e t i n f r o n t o f t h e m . T h i s b r i n g s m e t o

t h e l a s t p o i n t .

Page 9: What Happens When Google Offers Your Product for Free?

Let Google educate your customers

Page 10: What Happens When Google Offers Your Product for Free?

F o r m a n y s t a r t u p s t h e g r e a t e s t c h a l l e n g e i s l a c k o f

a w a r e n e s s . P e o p l e s i m p l y d o n ’ t k n o w t h e r e ’ s a s o l u t i o n t o

e m a i l o v e r l o a d . E v e r y o n e s u f f e r s f r o m i t , b u t n o b o d y

s e a r c h e s f o r t h e s o l u t i o n ( t h e s e a r c h v o l u m e f o r r e l a t e d

k e y w o r d s i s ~ 0 ) .

S o w h e n G o o g l e e d u c a t e s t h e m a r k e t o n t h e v a l u e o f

e m a i l f i l t e r i n g , i t ’ s a g o o d t h i n g . G m a i l ’ s P r i o r i t y I n b o x

m a d e o u r p o s i t i o n i n g e a s y : “ W e a r e P r i o r i t y I n b o x t h a t

a c t u a l l y w o r k s ” . N o t a b a d p i t c h t o h a v e .

Page 11: What Happens When Google Offers Your Product for Free?

I f G m a i l w a s t h e o n l y e m a i l p r o v i d e r o u t t h e r e , w e w o u l d

b e a l i t t l e m o r e w o r r i e d . L u c k i l y t h e r e ’ s Ya h o o M a i l ,

E x c h a n g e , O f f i c e 3 6 5 , L o t u s N o t e s ( y e s , t h e r e a r e 1 0 0

m i l l i o n p e o p l e u s i n g N o t e s ) , e t c . W h e n t h e y h e a r a b o u t

c o o l s t u f f G m a i l i s d o i n g , t h e y w a n t i t t o o . W e ’ v e

c a p i t a l i z e d o n t h a t b y m a k i n g o u r s e r v i c e p r o v i d e r -

a g n o s t i c .

I t ’ s e x c e p t i o n a l l y d i f f i c u l t t e c h n i c a l l y , b u t v e r y p o w e r f u l :

“ W e a r e P r i o r i t y I n b o x t h a t n o t o n l y a c t u a l l y w o r k s , b u t

w o r k s o n a n y e m a i l p r o v i d e r , c l i e n t a n d d e v i c e . ”

Page 12: What Happens When Google Offers Your Product for Free?

The re a re l o t s o f t h i ngs t ha t can k i l l a s t a r t up . Goog l e en te r i ng you r space shou ldn ’ t be one o f t hem - i t can ac tua l l y he l p . SaneBox’s l i v i ng p roo f t ha t i t ’ s poss i b l e f o r a sma l l s t a r t up t o compe te w i t h a g i an t , i n t he g i an t ’s backya rd .