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I have an idea for a web app, and I want to make it a freemium service. Those who sign up will have the ability to create 3 pieces of content for free and will be required to pay a premium to obtain the ability to create further content.

Provided that the two account types will have identical behaviors except for the quantity of content, what is the best way to prevent these users from circumventing my pricing plan and creating tonnes of trial accounts?

Have you thought about this before? What do you do on your web app?

I could monitor email addresses, IP addresses, phone numbers, etc., but all of these are easily circumventable.

Thoughts?

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migrated from webapps.stackexchange.com May 12 '11 at 11:33

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3  
Do you really have to provide both account types with identical behaviors? Couldn't you limit the feature set for non-paying users? –  mbillard May 12 '11 at 11:42
    
farmers with multiple accounts akin mmo's? Manual and Timely Monitoring works best.ever wonder why they have game masters in mmo's? –  Aditya P May 12 '11 at 12:13
4  
Make the carrot juicy enough for them wanting to pay. –  user1249 May 12 '11 at 12:45
    
I'd like to thank you all for leaving terrific answers, you've helped a lot in our decision for this matter! –  Jordan Arseno May 13 '11 at 15:48

7 Answers 7

up vote 5 down vote accepted

You should let them, and here's why...

  1. You can't stop them. At least, not without also having good-will destroying false positives. The cost of supporting a duplicate account is far smaller than the cost of losing a potential paying customer based on a false positive. They don't even compare. The full lifecycle value of a paying customer is just so much greater.

  2. They are giving you important product information. Namely that your value proposition is wrong, but fixable. People want to use your service; they just don't want to pay for it. This is a high quality problem even though it doesn't look like one right now. Adjust your price model or improve your value proposition to start improving conversion.

  3. Most start-ups are in a customer acquisition phase. This means that making the "customer" number larger is always good, even if they might be duplicates. While this may not seem important now, it will improve the viability of most of your potential exit strategies.

  4. They are forcing you to improve your cost model. Many freemium-based start-ups run aground because their cost-model doesn't scale to support the relatively high numbers of free users. Fix this sooner and you're far more likely to succeed.

  5. The potential cures are worse than the disease. They all impose an unnecessary barrier to entry for legitimate customers, which is exactly the opposite of what you should be doing right now.

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This is going to depend on your expectations for converting free to paying users. You chose this path, so don't panic and get into a pissing contest with your users. If someone wants to setup 5 email accounts and log in separately to manage all of this, so what? Someone will clone your site if it gets popular enough. They've done it to SO; yours would be no different.

You can price it so no one would want to go through the pain. You are in a position to start creating new features that can only be obtained through the paid version. The more users you get the more you're going to get on what features they're willing to pay for.

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+1 add killer features that are worth paying for –  Qwerky May 12 '11 at 15:07
    
+1 for "so let 'em". If what you're providing has value, the users you WANT will pay. The rest, well... Consider it your gift to the world. –  Dan Ray May 12 '11 at 15:52

I would probably try to make users care about the data they've generated while using a trial account. But that, of course, is not always possible. Also, IP addresses are not easily circumventable. Most people wouldn't be knowledgeable enough to intentionally do that. And don't forget about the cookies.

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You could authenticate through a service like google or facebook AND filter IP address. I've seen it in place for a couple of sites (heres one), and the overhead of getting another account and IP address is too high for most users, especially if they do not know that is how you are doing it.

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1  
On the other hand, filtering by IP address can be circumvented through the use of proxies, and if a significant percentage of your audience is corporate (and thus likely to run afoul of IP filtering), you're probably creating more trouble than the filtering is worth. –  Dave DuPlantis May 12 '11 at 12:55
    
I can create a fake google or facebook account as quick as I can create a fake email account. And Dave is right, if it's corporate you run the risk of multiple users on one IP. –  Spooks May 12 '11 at 18:36

I think it partly depends on the nature of the content - who is the content for? If it's purely for the creating user's benefit (say something like a storage locker), then only allowing a few items might make sense. But if the content is for everyone - if the content is intended to draw more users to the site - then limiting it to three items doesn't make sense. You would want your users to create as much free content for you, as possible, if it's boosting the value of the site. Does Amazon limit reviewing books? No, they want lots of reviews.

Which leads to the conclusion that it would be worth finding other reasons for the users to pay for the site - maybe something like a rating system or editing system for other people's content, or I don't know (it depends on the content :)

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As Jeff O said, the cost of the premium version of the service needs to be competitive with the hassle of managing multiple free accounts.

Also, read this: The Final Answer For What To Do To Prevent Piracy (via Hacker News)

(tl;dr: Make sure your anti-"piracy" measures don't make it difficult to be a legitimate customer.)

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Individual consumers will do whatever they can to get something for nothing. If they like your app and only need to use it 10 times then they may very well create 4 different email addresses.

Businesses on the other hand cannot afford to breach the license agreements and will pay to use your service.

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