How do you compete with “free”?

I find it is very rare that I actually complete a free trial, particularly for something I use for software development at work.

(1) It takes a lot of effort, maybe one day to one week, to really evaluate a product and know if it is worth it.

(2) That evaluation will feel like wasted time if, at the end, I find the product isn't worthwhile

(3) It will also feel like wasted time if I decide I like it but my employer decides not to pay for it.

If somebody gets paid $100,000 a year and spends a week evaluating something, the "free" trial costs $2000.

Thus I am not a believer in free trials.

I'm not a "founder" in any real sense of the word but my feeling is that it depends on what market you're targeting. If your goal is to become a billion dollar unicorn, then yeah it's going to be tough to beat free because you're going to need a huge number of users. On the other hand if you're OK with building a small sustainable business to support yourself, family and maybe a small number of employees then I think it's possible to target niche markets of people who are willing to pay for a high quality, well designed product that does exactly what they need.

For now this is just my working hypothesis, I'm still far from being in a position to test it.

Launching a free (often restricted by number of users or "beta" for a limited time) version is a way to get users to experience your product and possibly get hooked.

It makes the most sense where you expect your actual hosting costs to be symbolic for small-scale users and hope to earn from bigger customers.

This practice has been present since the dawn of (software) time — even Microsoft never really bothered with private illegal copies of Windows (or DOS), knowing it will get future customers into the Windows world and they'll want Windows at work too.

However, going straight up with the paid model has been there forever as well: it mostly depends on your individual market evaluation and existing entrentchment.

Nothing beats free. Stallman wrote a great essay on this called "Who does that server really serve?", decrying the redundancy and ultimate futility of building software-as-a-service. You will always be at-risk of being undercut by a free alternative. Selling software is an anti-pattern of computing, you have every right to be afraid of cheaper/better products wrecking your shop.

https://www.gnu.org/philosophy/who-does-that-server-really-s...

In the same frustrating sense that one broken down car on the highway can ruin everyone's commute, one vendor giving away free product can ruin a market. You can blame Stallman, Torvalds, the Java consortium, etc., who realized the only way to compete against Microsoft was price, or more precisely the lack of it.

As painful as Microsoft's dominance was, the era of shrinked-wrapped cdroms represented a more honest time when what you got was commensurate to what you paid. Now the only game in town is dangling the carrot and selling your customers' info to advertisers.

I simply refuse to play their game (free/race to the bottom). This isn't always a viable strategy (see stable diffusion vs OpenAI), but when I find myself in one of these situations I shoot for quality instead. The customers will pay, but I will do everything I can to give them a higher quality experience, whatever that entails.

The only thing that beats 'free' is 'quality'.

Your product has to be so good that people will clamour to buy it.

If your product's quality is 'meh', 'free' will beat that every time.

This is a bit business-model dependent.

If you don't intend for your product to be free for the rest of its lifetime, don't launch it as free.

With different adjectives = "good", "stable", and "supported" are three fairly effective ones.