From free to paid: a status update on Doorkeeper

Monday, August 22, 2016

Paul McMahon is the co-founder and Representative Director of Doorkeeper Inc. He also organises Tokyo Rubyist Meetup, which he’s been running since September 2010.

When we announced that Doorkeeper was becoming a paid service, we received an overwhelming amount of support from our organisers. We’re incredibly thankful to everyone who has written us encouraging messages, and who have already subscribed to our paid plans. We’ve also gotten a number of questions about the decision, so I’d like to give a status update, and respond to some of the common questions we’ve had so far.

How we’re doing so far

With making Doorkeeper a paid service, our objective was to make Doorkeeper be sustainable. More concretely, our goal is to generate enough revenue with Doorkeeper to cover all the ongoing running costs (such as hosting and support) plus pay for a developer to work on it full time by this time next year.

Based on the subscriptions we’ve received so far, we’re in a lot better place than we were before we made the announcement. For the first time in Doorkeeper’s history, we’re generating enough revenue to do more than just cover the ongoing running costs, and are about halfway to meeting our goal of having enough budget for a developer to work on it full time. Our performance so far matches what we anticipated, and we’re optimistic about being able to meet our goal of sustainability.

Beyond receiving subscription revenue directly from organisers, we’ve had Co-Edo Coworking announce that they would sponsor Doorkeeper communities, and YassLab also is offering something similar. We think this is a great idea, and are considering having Doorkeeper to support something like this more formally. If you’re an organisation interested in sponsoring the subscription of Doorkeeper communities, please get in touch.

How we arrived at our prices

After we announced the changes, we received questions about why we structured our prices as we did. Overall, our choices stemmed from the fact that we’re a bootstrapped business (one that doesn’t have any external funding). We’re prioritizing building a sustainable business over rapid growth.

Within the English-speaking community, there’s a lot of resources for building a bootstrapped business. If you’re interested in learning more about building a bootstrapped business, Designing the Ideal Bootstrapped Business is my favourite presentation on the topic, and Startups for the Rest of Us is another great resource. In Japan however, I’m not aware of many people talking about this approach, so it’s my hope that by explaining our thinking, others can benefit from our perspective.

Why Doorkeeper didn’t go freemium

A common business model used by large sites is freemium - where the base service is free, and users pay for extra functionality. We’ve had suggestions that Doorkeeper should have done the same, and that we should have made it free for some subset of organisers who would be unwilling to pay us (at least initially).

When coming up with our new pricing plans, we did consider this strategy, but decided it doesn’t make sense for us right now. While freemium would have allowed us to grow our user base faster, rapid growth isn’t our current goal, being sustainable is. We think that being a paid-only service maximizes our chances of meeting our goal.

Freemium works when you have scale, as with a typical freemium product, only a couple percent of users will pay. So we’d need to add tens of thousands of free organisers to add hundreds of paying organisers. Based on our experience so far, we simply don’t have the ability to get enough organisers using Doorkeeper in a short enough time to make this viable.

By being paid only, we only need to add tens of organisers per month to Doorkeeper to meet our goal. We believe there are many more organisers than that who see making event registration go smoothly a valuable enough problem to pay to solve, and we think by focusing on these organises for now, we have the best chance of success.

So while we think that freemium is a strategy that makes sense for some businesses, we don’t think it is the right choice for Doorkeeper right now.

Why we don’t offer a price for a one-off event

We’ve had people ask us if we’ll offer a price for a one off event, rather than a monthly subscription. Going forward, we plan to only offer Doorkeeper subscriptions, and not a one off price.

With Doorkeeper, we’ve always been about supporting organisers who hold regular events for their communities. While we’ve had some people use us for one off or irregular events, they fall outside our core target for Doorkeeper. So introducing a one-off pricing would make our service less focused, and we can’t afford to lose focus right now.

Doorkeeper also provides continuous value to the organiser, even when they aren’t collecting registrations for an event. For instance, if someone finds out about your event after it is over, they can join your community, and get an announcement about the next event. This means you can continuously grow your audience, making it easier to get participants as time goes on. As Doorkeeper provides ongoing value to organisers, we think having an ongoing subscription makes sense.

Why our pricing starts from ¥1,500 per month

Some people have suggested that we should offer cheaper plans, as they consider our pricing to be too expensive for some people.

When coming up with our prices, we considered cheaper plans. However, we came to the conclusion that the majority of organisers who are willing to pay us any money at all are willing to pay ¥1,500 per month. We think our organisers would rather us have a reasonable price and be a sustainable service than to have us underprice and fizzle because we’re unsustainable.

This is also a price point where we can reasonably expect to have a reasonable margin above the running costs of an organiser incurs on us. For us to make a price point work where our margin was only a couple hundred yen, we’d need to expect to have around ten thousand organisers on that plan, something that isn’t realistic for us right now. We hope we can get Doorkeeper to the scale where cheaper pricing would make sense for us, but right now, we think the current prices are our best chance for sustainability.

What’s our next steps

In the short term, we still have a number of outstanding tasks related to introducing paid plans, boring stuff like issuing receipts for payments. We’ve also had several companies ask to pay us by invoice, which we will make available to organisers on the Corporate plan. We also will improve the onboarding flow for new organisers. The current flow is not optimized at all, and so by tweaking it, we should be able to get more new subscribers.

We also will be helping first time organisers become more successful. Because of Doorkeeper’s community basis, the longer you use us, the bigger your community becomes, and the easier it is to attract new participants. However, when you’re organising your first event ever, it can be a bit of a challenge to get people to show up. So we’ll be helping new organisers get over this initial hurdle.

Besides that, we’ll also be taking the needs of our current subscribers into account. If you’re a Doorkeeper subscriber and have any feature requests, let us know! Now that we’re getting a better idea of who our core users are, we’ll be better tailing Doorkeeper to them.