Bringing Back Free

What It Covers

37signals reintroduces a free Basecamp plan after removing it in 2015, explaining how freemium models drive organic growth through product exposure rather than immediate conversion, and why they reversed their pricing strategy.

Key Questions Answered

• •Freemium conversion timeline: Weekly signups more than doubled after launching free plan, with 3% higher paid conversion early on, but success measured over 2-5 year horizons rather than immediate results to account for long-term exposure effects.
• •AB testing duration requirements: Price and design tests need minimum 21 days to reach statistical significance, as daily fluctuations create false patterns. Early results frequently reverse, making premature decisions based on short-term data actively harmful to outcomes.
• •Free plan structure for viral growth: One project limit with unlimited users creates network effects where non-paying customers expose dozens of potential buyers to the product organically, generating more value than direct conversion from those free accounts.
• •Margin-dependent decision making: Companies with healthy margins should prioritize unmeasurable factors like customer experience over bean counting individual support costs, while low-margin businesses like Walmart must track every expense to survive at 4% margins.