Why We’re Letting Accelerators Give PBworks Away

This morning, we announced our “PBworks for Startups” program.  We’re working together with five different startup accelerators, TechStars, 500 Startups, Acceleprise, DreamIt, and Lemnos Labs, to offer PBworks Starter Pack licenses (normally $1,995 per year) free to any of their portfolio companies.

While giving away premium licenses may seem like it contradicts the principles of the freemium business model, we believe that it actually represents a more highly-targeted version of freemium, and that it will help us make money.

At its heart, the mechanics of the freemium business model are that you provide a version of your service for free, and then make money when the free users encounter the limits of the free product, and decide to upgrade.  Its benefits are that it generates greater awareness of your product and lets you demonstrate your value to potential customers before hitting them up for money.

PBworks for Startups is simply a highly-targeted, high-value version of this model.  Our general freemium product features limits on users, storage, and the number of workspaces.  Most of our upgrades come from people who encounter the storage or workspace limits, after they’ve been using our product for a while.

PBworks for Startups offers 100 GB of storage and unlimited workspaces; the only limitation is the 20-user limit.  So why does it work?

The program works because it targets a very narrow market for whom the user limit is critical: High-growth startups.  Startups may start in a garage, but when the growth hits, it hits with a vengeance (along with large amounts of venture capital, and, hopefully, revenues).  If a startup adopts PBworks when it is in the proverbial garage, it is likely to want to keep using PBworks as it grows.  The easiest way to win the next Facebook as a customer is to get Facebook to adopt you when it is still in its corporate infancy.

We’ve targeted startup accelerators because they provide a convenient, high-volume channel for reaching this kind of startup.  500 Startups, for example, has 450 portfolio companies–far more than a typical venture capital firm.  But the guiding principle is simply to plant seeds at high-growth startups.  We’re certainly willing to work with VC firms, law firms, or other partners who can help us reach the next Facebook.

So if you think you can help us plant the seeds of PBworks at the next Facebook, apply to join the PBworks for Startups program.  Simply email us at accelerators at pbworks dot com.