PassPack’s Profit Model

PassPack is a free service, so how can we stay in business? You have every right to know…

Free is fine for most folks, some need premium services.

The term Freemium, was coined by NY venture capitalist Fred Wilson when talking about his favorite business model. So though it may sound like backwards math to some — if a VC likes it, rest assured it’s profitable (no worries, we’ve done our own math too).

“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.”

PassPack is not ad supported, so until we get those premium versions rolled out, we’re a fully free service. This brings up some questions:

What are the paid packages and pricing?

Premium packages will offer more space and/or additional features like sharing and administered accounts.

Different packages will be available for different needs and prices will scale accordingly (not dissimilar to the way Basecamp does things). We’ve fixed some tentative price points, though these have already been adjusted once based on your feedback. Now: $10-$12 for a space upgrade. Currently, you can upgrade to more space Free for now if you need to.

When will the paid packages be ready?

We’re already working on it (Beta 6 is heading in that direction). We’ll probably be releasing the paid packages one by one, as needed.

For a service like PassPack, there are a number of audits to undergo and certifications that need to be acquired before releasing a fully commercial version. We’ll also need some legal council and a proper insurance.

Even though our technology has been ready for some time now, we can’t make the move out of “Beta” until we get these items taken care of. This is also why you can not store financial information in PassPack until then.

All of these things cost money, which leads to the next question…

How will PassPack survive until then?

Like most startups, we expect to be funded. It’s been an interesting experience thus far, and generally very positive.

A few of you have written me with concerns about how outside investors might try to change the products focus. We’re aware of this potential hazard – and it’s the last thing we want.

PassPack is about keeping your passwords private. Any investors we may bring on board will know that, or we simply will not bring them on board. We’ve already walked away from some potential partners, investors and even buyers because their vision didn’t align with ours.

Questions? Feel free to ask – I’ll do my best to answer, though some things I simply may not be able to disclose.

Thanks to Tummblr for spurring me on for this post.

Technorati Tags: , , , , , , , ,

Advertisements

7 responses to “PassPack’s Profit Model

  1. GREAT post and making money is something I always worry about when I find a service that I love and become dependent on. Good luck with the funding process and getting your product to offer some Freemium features.

  2. Thanks Robert!

  3. Thank you for this post! I’ve been very suspicious (but nonetheless happy with) the motives behind passpack since I couldn’t figure out who was paying for it.
    Now I feel a bit more comfortable.
    Keep up the good work.

  4. Dulani – Glad to hear it helped quell some fears.

    If you have any other suspicions, or things you’d like me to address – just ask.

  5. Why not align with Google before they create their own version of the same feature for the world? Many products out there incorporate Google search features – there are any number of other ones available and in R&D. Just click the More and Even More links on Google’s site.

    I’m not sure how it works, but I’ve heard that polarized fiber optic connections cannot be hacked, because interference required to read the transmission destroys the transmission. Could it be possible to put your database behind such a fiber? If it does work that way, you other challenge would be explaining the physics in such a way that lay users would trust it.

  6. Hi Elliot,
    Yes, those are all Google products in the “more” section — either ones that they have built, or purchased. Passpack wasn’t built by Google, so the only way we could get into that list would be to be acquired by them.

    Polarized fiber optics — sorry, we have not control over where people connect to Passpack from. That’s part of the beauty actually :)

    Cheers to you,
    Tara

  7. Pingback: 3 Creative Ways To Use Passpack Desktop « Passpack Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s