Ryan Carson, one of the developers behind [[http://www.dropsend.com|DropSend]], a well-known service for sending large files over the Web, in a piece called “[[http://www.thinkvitamin.com/features/webapps/will-your-web-app-make-money|Will your Web App Make Money]]”, talks about how people vastly overestimate the number of paying customers they’ll get when deploying a web app:
> If you’re offering a free plan to your customers (for example DropSend offers a free plan that enables users to send 5 free sends a month before they start paying) then expect to get around 98% or 99% of your customers on that plan. That means that you can only really bank on 1% or 2% of your total customers on the paying plan. In our experience this is true and other major players in the web app industry have agreed. This is about the industry average.
Coming from Ryan Carson this is especially interesting. DropSend currently has 17,000 users gained in just over five months. Their business model is based on subscription plans. Wouldn’t you expect more than 1% of the total customers would use the paying plan?
The article is published at [[http://www.thinkvitamin.com|ThinkVitamin]], a new resource launched recently for web developers, designers and entrepreneurs, also powered by Ryan. I saw this via [[http://www.plasticbag.org/|PlasticBag]] and as they say it’s already a pretty interesting looking site with some extremely cool people commenting and supporting the venture.