RUNBOX PRESS RELEASE - Going from a free email service to a paid email service
There is a viable long-term business buried in a large free user base, but the process requires that you dare say goodbye to 98% of your users.
(PRWEB) May 15, 2002
runbox had to write off 98% of its users to make money and continue to
Provide great service to the remaining 2% that converted to paying customers.
The Internet boom brought a number of free email services. Today, many
Of the free email service companies are running out of cash. Most free
Email companies believe the free users will never pay for the service,
So they fold the service - and often the company itself - rather than asking for a fee.
Lately, several email services (even large ones like for example
MyVisto. com with millions of free users and millions of USD in the
Bank), have closed their free service without even trying to ask their
Users for a fee.
Runbox has found that there is a viable business buried in a large free
User base. However; making the transition from a free email service to a paid email service, required saying goodbye to 98% of your users.
I am the founder and managing director of runbox AS ("AS" is Norwegian
For Incorporated). I founded runbox in 1999, and developed it into the
Provider of a free email service called runbox mail manager, found at
Www. runbox. com. runbox is a true Internet start-up, where a small number
Of dedicated individuals set out to make the worlds best email service:
We wanted vast storage space for email, extensive email management
Features and no advertisements. We built a system to fit our own
Unfulfilled and demanding email needs, a classic story.
Runbox soon became a success, we were listed on Yahoo, Open directory,
EmailAddresses. com and many other places - As a result, we quickly
Surpassed 100 000 registered users world wide and kept growing faster
And faster. We were not making any money off of our user base, but we told ourselves
That we would develop business models as we went along; such as selling
Private label versions of the service. Life was easy, money was easy,
And we had a lot of fun.
Then the. com doom reared its head for real in the summer of 2001. At
First we believed it would pass, and that everything would soon be back to normal. As we all know, it did not go back to "normal". By summer
2001, our cash was gone, and there was no more investor money to get. runbox decided we had to turn to the users for money; in short, that we
Had to become a paid service.
The decision was made and we spent a hectic few weeks preparing for a
Credit card processing system, updating the database and building a referral program tracking system.
We explained the situation to our users. We shared the fact that in
Order to survive and continue delivering the great service runbox would
Now have to become a paid service, we humbly asked for our users
Understanding. We priced the service at a subscription rate of USD 29.95
Per year. runbox found that whether to pay or not to pay, was the
Question for our users. We found that the users demanding a high
Performance email service and the extra storage space, were more than
Willing to pay USD 29.95 for it. runbox users are even willing to pay
Upfront for two and three years of service.
Runbox found that our users understood and approved. We have received
Dozens of comments like "runbox was too good to be free in the long run,
Here is my payment, keep up the good work".
The result? more than 2% of our former free users now pay for the service. Still, the best part is that we are not only having our existing users paying, we are also getting new paying customers, every day.
What about the 98% of our user base that went out? However much we
Regretted having to introduce the payment requirement to our users, the
Free model did not have the right of life for us. There was little other
Choice than to bid farewell to the 98% of our users that did not want to pay for the service.
Becoming a paid service has yielded all kinds of positive effects, the
Fact that we now have a long term viability to the business, has given a moral boost to everyone involved. The load on our system is greatly reduced allowing for strong growth with existing hardware. On the business side, runbox has got a healthy injection of fresh money from our existing paying customers and continual new revenue from new customers. We discovered the age-old truth that to succeed you
Must focus on delivering great service to your paying customers.
In short; runbox has gone from a free email service that was losing
Money to a paid email service that is profitable. We now see a bright
New future for our company and our service.
Hans JÃ¸rgen Lysglimt
CEO / Founder
Www. runbox. com
Copy of this press release is posted on runbox website at:
Http://docs. runbox. com/en/info/ci/pressrelease. doc (http://docs. runbox. com/en/info/ci/pressrelease. doc)
Press images of CEO Hans JÃ¸rgen Lysglimt for free publication at:
Http://docs. runbox. com/en/info/ci/press/images/default. doc (http://docs. runbox. com/en/info/ci/press/images/default. doc)
Hans JÃ¸rgen Lysglimt
CEO / Founder
Kongens gate 24
Www. runbox. com
Www. runbox. no
Phone: +(47) 24 14 99 50
Fax: (47) 24 14 99 59
Cell phone +(47) 92 41 05 10
Main URL: http://www. runbox. com (http://www. runbox. com)
Help URL: http://docs. runbox. com (http://docs. runbox. com)
Features: http://docs. runbox. com/en/info/default. doc (http://docs. runbox. com/en/info/default. doc)
FAQ: http://docs. runbox. com/en/help/faq. doc (http://docs. runbox. com/en/help/faq. doc)
Support email: support@runbox. com
Make your runbox email experience even better with runbox addons. Get
Faxes directly to your email address, register and use runbox with your
Own domain name, etc:
Http://docs. runbox. com/en/info/addons. doc (http://docs. runbox. com/en/info/addons. doc)
Join the Runbox Affiliate Program. Recommend Runbox Mail Manager to
Your friends and make USD 11 for every paying user you refer to runbox:
Http://docs. runbox. com/en/info/referral. doc (http://docs. runbox. com/en/info/referral. doc)
Runbox AS is a privately owned Norwegian limited company, developing and
Hosting custom made email solutions based on the runbox email
Application platform. runbox' latest customer, NRK, is the largest
Broadcasting company in Norway (see http://www. nrkpost. no (http://www. nrkpost. no)). runbox is working with NASDAQ listed (TELN) Norwegian telecom operator
Telenor (www. telenor. com) to integrate the runbox email application with
Chargeable SMS services for mobile phones.
All runbox servers run Linux supported by runbox Linux partner Linpro (www. linpro. no) and are hosted with NASDAQ listed (KQIP)
KNPQwest (www. kpnqwest. no).