Everyone likes freebies
This is a bit of an ad, but I just got a freemium WiMAX hotspot, and like it enough to spread the word.
Freemium, a portmanteau of "free" and "premium", is a business model popular among many games these days, especially in the mobile space. The idea is to have a free product which draws people in, then to make money selling them extra things to make the experience nicer. For example, for a game, those extras might be in-game currency, special items, unlocking content immediately, or so on.
While most (maybe 80%, though it obviously varies) people get by at the free level, a small percentage typically pays most of the money. The free users might provide some benefit to the company even if they don't directly generate revenue - it could be as simple as word of mouth, or it might be more subtle like providing a basis for an in-game economy or social stickiness, either of which would encourage people who actually pay to use the service more.
Striking a balance between free and premium is tricky. You don't want the free offering to be too good, or people won't want to upgrade. On the other hand, you don't want to alienate free users because they're potential customers and may be helping in an indirect way.
FreedomPop is a startup which is trying to apply this idea to mobile data. You can get a USB dongle or hotspot from them in exchange for a refundable deposit; you then get 500 MB per month free. By default, you'll get charged per megabyte you go over.
They try to upsell you in various ways - there are plans for higher monthly data limits, of course, but also services such as faster speed or usage alerts. You can temporarily earn more data by participating in affiliate ads (e.g. fill out a survey for a few MB, or try out a service for lots more).
There's also a social aspect, as you get a small monthly bonus for each friend you have connected (though finding friends currently requires handing over your email login). Friends can also pool data and request capacity from each other, which is a neat idea.
Part of the reason they're able to try the freemium route is probably due to the devices using WiMAX, which didn't really caught on and as far as I can tell has lost to the competing LTE standard. The infrastructure is already built in some parts of the country, but there's not a lot of demand for a failed standard, so FreedomPop is probably getting bandwith cheaper than they would otherwise. They're planning on moving to LTE in the next year, but how the current rollout turns out will probably affect whether the startup is even able to stay in business that long, much less pay for potentially higher costs.
There are a few things to be aware of, the biggest being an inactivity charge of $1/month if you use less than 5 MB in that cycle. Also, if your account has less than $2 in it and you're within 100 MB of your limit, they'll conveniently charge $10 (and credit your account) to avoid service interruption. You can turn this automatic top-up option off, but I didn't see a way to cut off usage at your limit. If you keep the option off and have no money in your account, you'll (probably) stop at the limit; if you do have money in your account, it looks like you can keep using data (without warning) until your account is drained.
Being a data provider, they could conceivably monitor your usage and sell this information to others. Then again, your ISP might be doing this too. Being a startup, they could go out of business and are more likely to change their business model as they figure out what they're doing.
If you have a smartphone which can tether and has unlimited data, or if you only need data at home or work, you don't need this. I don't even have a smartphone, but I do occasionally want data when I'm roaming (e.g. during a puzzle hunt).
Whether you can get reception at all is a big potential problem. WiMAX coverage is spotty, mostly limited to some major cities, and I doubt anyone will invest any more money for more infrastructure. Fortunately, in my area it seems pretty good.
I read enough media coverage to think FreedomPop weren't likely to be too sketchy and simply disappear with my money, so ordered a hotspot. It arrived today and works as advertised. I've only tried it at home so far, but the real test will be to see what coverage is like around the area.
The device is pretty small and light, and fits comfortably in the palm of my hand (though the fine print says to keep it at least 8 feet away from people). The packaging was Apple-esque, an unexpectedly nice touch of detail. Battery life is claimed to be six hours, which seems like enough for a full day if I turn it off when I'm not using it. There's a web interface to the device settings; I immediately changed the SSID, WPA password, and admin login on mine.
I've turned off the auto top-up option, so should be able to use the service for free. I doubt I can be persuaded to upgrade, but their prices seem reasonable as long as you're not using gobs of data. One of the reasons I've held off on getting a smartphone is because monthly data plans seem expensive, and I like anything which might bring prices down. FreedomPop could help people get by on a more limited data plan or consolidate multiple data plans.
Coupled with an old smartphone and VoIP, FreedomPop might be a workable stand-in for an actual smartphone. There's the initial upfront cost and some drawbacks that real phone service doesn't have, but in exchange you get to avoid the monthly phone bill.
Overall it seems like a neat idea, and certainly one I hope catches on. In the very short time I've had it, I'm happy with the device, though I'm not sure I'll ever pay for anything.
Freemium, a portmanteau of "free" and "premium", is a business model popular among many games these days, especially in the mobile space. The idea is to have a free product which draws people in, then to make money selling them extra things to make the experience nicer. For example, for a game, those extras might be in-game currency, special items, unlocking content immediately, or so on.
While most (maybe 80%, though it obviously varies) people get by at the free level, a small percentage typically pays most of the money. The free users might provide some benefit to the company even if they don't directly generate revenue - it could be as simple as word of mouth, or it might be more subtle like providing a basis for an in-game economy or social stickiness, either of which would encourage people who actually pay to use the service more.
Striking a balance between free and premium is tricky. You don't want the free offering to be too good, or people won't want to upgrade. On the other hand, you don't want to alienate free users because they're potential customers and may be helping in an indirect way.
FreedomPop is a startup which is trying to apply this idea to mobile data. You can get a USB dongle or hotspot from them in exchange for a refundable deposit; you then get 500 MB per month free. By default, you'll get charged per megabyte you go over.
They try to upsell you in various ways - there are plans for higher monthly data limits, of course, but also services such as faster speed or usage alerts. You can temporarily earn more data by participating in affiliate ads (e.g. fill out a survey for a few MB, or try out a service for lots more).
There's also a social aspect, as you get a small monthly bonus for each friend you have connected (though finding friends currently requires handing over your email login). Friends can also pool data and request capacity from each other, which is a neat idea.
Part of the reason they're able to try the freemium route is probably due to the devices using WiMAX, which didn't really caught on and as far as I can tell has lost to the competing LTE standard. The infrastructure is already built in some parts of the country, but there's not a lot of demand for a failed standard, so FreedomPop is probably getting bandwith cheaper than they would otherwise. They're planning on moving to LTE in the next year, but how the current rollout turns out will probably affect whether the startup is even able to stay in business that long, much less pay for potentially higher costs.
There are a few things to be aware of, the biggest being an inactivity charge of $1/month if you use less than 5 MB in that cycle. Also, if your account has less than $2 in it and you're within 100 MB of your limit, they'll conveniently charge $10 (and credit your account) to avoid service interruption. You can turn this automatic top-up option off, but I didn't see a way to cut off usage at your limit. If you keep the option off and have no money in your account, you'll (probably) stop at the limit; if you do have money in your account, it looks like you can keep using data (without warning) until your account is drained.
Being a data provider, they could conceivably monitor your usage and sell this information to others. Then again, your ISP might be doing this too. Being a startup, they could go out of business and are more likely to change their business model as they figure out what they're doing.
If you have a smartphone which can tether and has unlimited data, or if you only need data at home or work, you don't need this. I don't even have a smartphone, but I do occasionally want data when I'm roaming (e.g. during a puzzle hunt).
Whether you can get reception at all is a big potential problem. WiMAX coverage is spotty, mostly limited to some major cities, and I doubt anyone will invest any more money for more infrastructure. Fortunately, in my area it seems pretty good.
I read enough media coverage to think FreedomPop weren't likely to be too sketchy and simply disappear with my money, so ordered a hotspot. It arrived today and works as advertised. I've only tried it at home so far, but the real test will be to see what coverage is like around the area.
The device is pretty small and light, and fits comfortably in the palm of my hand (though the fine print says to keep it at least 8 feet away from people). The packaging was Apple-esque, an unexpectedly nice touch of detail. Battery life is claimed to be six hours, which seems like enough for a full day if I turn it off when I'm not using it. There's a web interface to the device settings; I immediately changed the SSID, WPA password, and admin login on mine.
I've turned off the auto top-up option, so should be able to use the service for free. I doubt I can be persuaded to upgrade, but their prices seem reasonable as long as you're not using gobs of data. One of the reasons I've held off on getting a smartphone is because monthly data plans seem expensive, and I like anything which might bring prices down. FreedomPop could help people get by on a more limited data plan or consolidate multiple data plans.
Coupled with an old smartphone and VoIP, FreedomPop might be a workable stand-in for an actual smartphone. There's the initial upfront cost and some drawbacks that real phone service doesn't have, but in exchange you get to avoid the monthly phone bill.
Overall it seems like a neat idea, and certainly one I hope catches on. In the very short time I've had it, I'm happy with the device, though I'm not sure I'll ever pay for anything.