Ben Benner’s Blog

I wish I could claim to have been the one to coin the term Freemium. Per Wikipedia, the phrase is attributed to venture capitalist Fred Wilson.

Freemium is a business model which works by offering basic services for free, while charging a premium for advanced or special features. The word freemium is a portmanteau created by combining the two aspects of the business model: free and premium. The business model has gained popularity with Web 2.0 companies.

I wanted to write  this post a little while back, closer to when it happened, but cest la vie.

This post is about Kindlefeeder.com.

My wife has been an avid fan of Kindlefeeder for almost as long as she has owned an Amazon Kindle. It is a very cool service that pulls in the RSS feeds from the blogs (or news sites) that you want and packaged them up into one document. It then emails that document to your Kindle’s email address.

There are a few different services out that there that do this type of operation, some of them are web based, some are desktop software packages you install. I think that the web based ones like Kindlefeeder are the better way to go.

The web based ones are representative of a centralized system.  Whereas, the desktop software packages are representative of a distributed system.

There are advantages and disadvantages to both kinds. In my opinion though the centralized way is the better way to distribute such a service, to the masses (particularly when you are doing it as a freemium). The main factor behind this is, desktop software requires a certain level of technical sophistication that you don’t normally find across the vast majority of “the masses”.

With a desktop software model you will need to push changes out via software updates, which HAVE to be installed to work. There is also the factor that your software organization will need to be prepared to support the different operating systems that exist.

The web based system on the other hand means that you can push out changes immediately and all users will see the new graphics or benefit from the bug fixes. While you still have multiple ‘systems’ to support, the browsers are all fairly uniform.

But I am getting off topic here. Let me bring this back to Kindlefeeder.

Kindlefeeder is a service that sends a compiled document of all the RSS feeds that you want to your Kindle email address. You manage your account via the Kindlefeeder.com website. And the behind-the-scenes software processes there go out and get the RSS data and compile the document per the schedule that you choose.

Beautiful!!!

Of course, getting back to the centralized vs distributed comparison. A distributed software service, is typically cheaper to operate. Because the distributed service will use the software of the local machines where it is being run. Also, in the case of the Kindle these software services typically transfer the documents to the Kindle via the USB vs email (which saves the Kindle owner money).

The centralized software service requires that you have servers, bandwidth, disk space and if your service gets really popular you sometimes have to exponentially increase all of those things. At the Web 2.0 conference a few years back, one of the original architects of Digg.com stated that they were adding several servers a day. He also stated that they started with only one server, that in the beginning they optimized the heck out of it.

Kindlefeeder.com was registered in September of 2008, but on March 10th 2009, Kindlefeeder put out a notice stating that there would be a change in their service.

Because of the money and time required to keep Kindlefeeder afloat and improving has grown considerable, I am now asking for a small monthly subscription payment from higher-volume users and voluntary donations from others to help support this website.

So from now on there will be two types of service: free basic and unlimited.

Free basic: just by having a Kindlefeeder user account, you can subscribe to up to 5 feeds and use all the features of the servie for free.

Unlimited: For $5 a month, you can subscribe to an unlimited number of feeds.

From the first moment that Gina pointed the Kindlefeeder service out to me, I wondered when the shoe would drop. When would Kindlefeeder reach that critical mass point of either such severe popularity that the owner would NEED to start charging for the service because of the costs associated to supporting the service or because they felt that they could start to charging because of the fact that it was just such a useful utility.

This means that it took approx 6 months to reach the point where Daneil Choi, owner of KindleFeeder.com felt the NEED to start charging.

To me this transformation from a simple free service to a freemium service means that there is a potential market. That there might be room for two or three different paid kindle oriented feed services.

In terms of a looking at a free service and trying to apply what one might call traditional market logic, the ‘URL Abstraction’ market is one that is a bit saturated, particularly with free services. And yet there appears to be room out there for at least one freemium provider. Budurl.com turned up their freemium version a while ago.

From what I have heard, their ‘analytics’ package was drawing quite a crowd. I have also heard that once they started their freemium offerings, they lost some of their following.

In a related note, an article about what I am calling ‘URL Abstraction’ hit on TechCruch hit my radar recently. The article lists five different companies that ‘shrink urls’ or what I would call ‘URL Abstraction’. The reason for the article is that apparently Bit.Ly recently received $2M in funding.

To that the article speculates that TinyURL, should be worth approx $46M. The interesting bit though, is that TinyURL doesn’t charge any money, they do not appear to have any direct monetization in their business model. Bit.ly does not have a direct monetization strategy either, yet. That begs the question, how did they get $2M of investment? Will we see them pump out a monetization strategy similar to BudUrl or will they take that money and produce some other kind of service.

Only time will tell.

Laterz