Today on the show we have Vova Feldman, the Founder and CEO of Freemius.

In this episode, Vova shares his experience in launching Freemius from a side project into a platform powering thousands of indie software businesses.

We then discussed how Freemius is repositioning itself from its WordPress roots to become the go-to solution for small SaaS and desktop software businesses.

We wrapped up by discussing their new transparent pricing model — designed to align with growth and reduce graduation churn.

Mentioned Resources

Freemius

LinkedIn | Vova Feldman

RatingWidget.com

Senexx | Gartner

Techstars

WordPress

Paddle

Stripe

PayPal

Churn FM is sponsored by Vitally, the all-in-one Customer Success Platform.

How Freemius Aligns Pricing With Growth to Reduce Graduation Churn

Vova Feldman – CEO & Co‑Founder, Freemius

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Episode Summary

Today on the show we have Vova Feldman, the Founder and CEO of Freemius.

In this episode, Vova shares his experience in launching Freemius from a side project into a platform powering thousands of indie software businesses.

We then discuss how Freemius is repositioning itself from its WordPress roots to become the go‑to solution for small SaaS and desktop software businesses.

We wrap up by discussing their new transparent pricing model — designed to align with growth and reduce graduation churn.

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Transcription

[00:00:00] Vova Feldman: I think our main focus right now is besides pushing all the changes that are happening because we need to communicate them to the world is awareness. Our goal is to position ourselves as a trusted SaaS platform for small and micro SaaS in our industry. And after the eight‑year footprint in WordPress, we need to change that so the world will know that we're playing in the field of Paddle and the other competitors are out there.

[00:00:32] Andrew Michael: This is Churn.FM, the podcast for subscription‑economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.

[00:00:51] VO: How do you build a habit‑forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.

[00:01:05] Andrew Michael: Strategies, tactics and ideas brought together to help your business thrive in the subscription economy. I'm your host, Andrew Michael, and here's today's episode.

[00:01:15] Andrew Michael: Hey, Vova, welcome to the show.

[00:01:17] Vova Feldman: Thanks so much for having me. I'm excited.

[00:01:20] Andrew Michael: It's great to have you. For the listeners, Vova is the CEO and founder of Freemius, a merchant of record for selling software. Prior to Freemius, Vova was the founder of RatingWidget.com and co‑founder and CTO of Senexx. It was acquired by Gartner. Vova is also a TechStars ambassador. So my first question for you today is what motivated you to build Freemius?

[00:01:41] Vova Feldman: Kind of came from my own need. You mentioned RatingWidgets. So basically it was this side micro SaaS that I had for many years. And after my company was acquired, the one you mentioned, I was kind of looking at what I want to do next. And I looked at the data, the micro SaaS, realized there's a lot of users using it for free, even though we're paying for servers and all of that. So I decided, let's see if we can turn that into a business. Joining with another two guys and we spent about a year taking it from a side gig into a fully commercial solution, adding all the layers, the payment integration, marketing automation, the user management, everything that you need to actually sell globally.

[00:02:23] Vova Feldman: And it worked, we started to make money, we drew salaries and all of that. But what was the biggest aha moment is that we noticed the core product didn't change at all. It remained the same thing that I built as a developer in two weekends of my spare time. So we realized there's this huge disproportion between the time it takes to… coders to build something versus turn that into a business. So that was kind of the aha moment for Freemius basically.

[00:02:53] Andrew Michael: Nice. Can you talk us through a little bit about the user experience coming to you? So prior to starting, you mentioned you call the users makers. What would be like a typical user? When would they come to you? Like what would be the product experience for them?

[00:03:06] Vova Feldman: Yeah. So I would say today in the age of AI, it will be like the target audience is usually small software companies, indie makers. So I have product and idea, right? And now I want to sell it to the world and I need to choose how do I do that? One way is I can integrate with payment processor if I can and it's accessible in my country and then build a bunch of layers on top of it in order to handle all the other things. And what I mean by all the other things is some of those that I already mentioned. But there's like the payment processing themselves, but it can be software licensing, it could be the affiliate platform, it could be the subscription, like automated stuff, like cart abandonment recovery, exit intent.

[00:03:54] Vova Feldman: It's like endless amount of mechanisms into e‑commerce and maybe you don't think that you need it in the beginning. But if you do discover Freemius and we hope that you do, then you get this full business in a box that you can start using from day one that not only tackles the functional components, also solves the whole global sales‑taxes challenge, which is a huge pain in the ass these days, compliance stuff like GDPR and how do you treat with data and a lot of layers so you can just start selling.

[00:04:29] Vova Feldman: In terms of how the product user experience, you sign up, you configure the product. Depends on the type of product, you may need to do some integration. We have some SDKs. We invested a lot of resources in thorough documentation, SDKs, developer experience because our audience in the end are developers. So there is a big emphasis on that. And you can integrate and start selling very, very quickly. Again, depends on a product type, but we build the service in a way that is truly self‑serve and you can start making real transactions immediately.

[00:05:08] Vova Feldman: We don't hold you behind some tedious KYC processes and all these things. We find ways how with technology and systems, we can work around this stuff. And only when we identify suspicious activity, the system is bringing those accounts and then we try to dive deeper. So a typical today customer is someone who is building some AI‑first SaaS or a Chrome extension or a WordPress plugin. And they want to sell without the operational hassle. So they go to Freemius.

[00:05:43] Andrew Michael: Very nice. Yeah. I think all those complexities sort of you laid out, think those are things that sort of keep popping up along the way. Previously, we had Andrew Davies from Paddle on the show and he sort of mentioned like some of those things are champagne problems and the sense that you only really get to experience some of them when things are going well. But I think if you like an indie maker, a small like team, these operational sort of things on the side tends to weigh you down eventually, and you can't actually do the thing that you enjoy doing or enjoy building.

[00:06:11] Vova Feldman: So maybe you mentioned Paddle, like a big difference between us and them is that we are focused on the smaller maker, on the indie hacker while they focus more on the bigger one million plus and naturally the attention they give to the smaller ones. It's not the same.

[00:06:28] Andrew Michael: Obviously. Yeah. And I think also the feature set becomes slightly different and things you care about more. I see some of the features that you have like the cart abandonment and the affiliate platform and these sort of things. I think they become interesting. Like as a small team, you want to be able to do these things, but you just don't really have the time because you have a million features as well that you want to get. Very cool.

[00:06:48] Andrew Michael: So tell us a little bit about how it's going. Where's the team at now? Where's everybody …?

[00:06:55] Vova Feldman: So things are going well. We've been in business for over a decade for many years. Thank you. For many years, we've been focused on the WordPress ecosystem. That's kind of where we started because we saw the biggest like unmonetized inventory and we felt we can make a big impact there. The plan was always kind of expand to additional ecosystems. We were not sure where exactly. It just happened two years ago. There was some hiring things that happened and the timing was great and we decided to expand with …

(The interview continues beyond this excerpt.)