Just 3 more days until the special upgrade to lifetime offer expires!! Go upgrade today!

Over the last year I’ve learned a lot about offering free services online – I’ll share it with you today because (a) it’s interesting, and (b) some of you wonder how I make money :)!

About 90% of JibberJobber’s functionality is free. Why so generous? Because many of the people that urgently need JibberJobber don’t have any money (they are looking for a job). As I talk with most career centers and other non-profilt entities they have a very hard time understanding this.

(if you get so much for free, why in the world should you upgrade? The other 10% is big-time frosting on the cake. You get unlimited records, e-mail reminders on action items, and goodies like unlimited network relationship goals – very cool indeed! Did I mention there are only three days left before the price goes from $99 to $495 for lifetime?)

They are used to companies selling them stuff, which they can then offer to their constituents for free. For example, University of Whatever is willing to pay $5,000 a year to license a technology as long as they can offer it to their students and alumni for free.

But usually they DO NOT want to endorse, promote, or offer anything that their constituents might have to buy. From my perspective as a student (or alumnus) this is a little silly because they actually do recommend things that cost money – so its a selective thing.

And why they stongly recommend using Monster (where there is an option to upgrade) or LinkedIn (where there is an option to upgrade) baffles me – because JibberJobber has the same business model (freemium), but they tell me they can’t let their constituents know about JibberJobber.

I have to mention that there are some incredibly progressive schools that I’ve worked with – so this is more of a generalization – the point I’m making is that some people/companies don’t understand freemium.

So, back to Freemium. Josh Kopelman (Redeye VC) sums it up with his blog post titled The Penny Gap. You have to understand that Josh is a VC, so he’s critically looking at this model from an investor’s perspective (I realize that you, as my user, are also an investor!). His point is there is a HUUUUUUGE gap between FREE and pay me anything – even a penny. There are two nice charts he has, and intellectual talk over on his blog – go read that for indepth analysis (make sure to read the comments).

Josh points to a GigaOM blog post by Anne Zelenka titled Free: A Tactic, Not A Business Model. Anne goes on to talk about the idea a little more, ending with the idea that not understanding the real business model “misleads web application developers into thinking they don’t need to do the hard work of figuring out what’s really of value to users before they build and launch their online service. Who loses? Users, … “ She makes some excellent points, and there are great comments there as well.

So what in the world am I thinking? What is the business model behind JibberJobber? Has the penny gap been that big? And all of this boils down to, where is JibberJobber headed? Two thoughts:

• The percentage of people that have upgraded to JibberJobber is significantly higher than what I was told to expect (and this doesn’t even include this week’s special) – so the penny gap has been smaller than what others said it would be. Based on percentages alone, the revenue from upgrades will be enough to sustain the company moving forward once we hit a certain number of signups.
• The JibberJobber business plan has other revenue streams, aside from the premium upgrades. It’s a little too early to talk about it on this blog but these other streams have already been significantly larger than premium upgrades. This means that we can continue to offer a ton of features in JibberJobber for the free model (but still adding above-and-beyond value to the premium users).

All of this generalization can mean very little without real numbers to back them up. I’m not going to be that transparent right now. But I am very aware of the need to have a sustainable business model. We have whittled away some distractions (the GoogleAds went away pretty quickly) and are focusing on long-term sustainability through … our… secret sauce. More on that later :).

Anne Zelenka: “The penny gap separates the winners from the losers, economically speaking.”

Fred Wilson: “free is a great way to make money. You just have to know how you are going to get paid for being free.”

Hat tip to Jeff Jordan for pointing me to the penny gap posts.

Here are some other blog posts on the special… is this cool or what?

Nadine Turner came into my little world a few weeks ago (almost two months??) and we hit it off pretty quick. I only know her from our online communications (wish she would be on IM more ;)) and have found her to be quick, witty, sharp, curious, and helpful. And extremely cool. Thank you Nadine for your cool endorsement!

I met Thom Allen in the lobby of Appleby’s when we were the first ones to show up for a bloggers dinner in March. We both kind of sat there for a while and finally I said “are you with the bloggers?” Its a wierd question, like saying “did you watch Star Trek before you came” or “would you have really voted for Sinjaya on American Idol?” … seems like a personal question. Anyway, I’m still trying to figure out what Thom does because as I follow him on Twitter he seems to do… everything! Yo Thom, thanks for the support!

I found Ash Buckles’ blog last summer when I started blogging and found that he worked for one of my close friends while he was in Rexburg, Idaho. We exchanged e-mails way back then but finally met a couple of months ago at a bloggers dinner. He is the CIO of Brides Club and has a lot of responsibilities there (hands on IT as well as corporate strategy). Does some very cool stuff, has recently begun to post stuff on YouTube, and overall a very cool guy. He asked a question at the last March dinner that I have been thinking about daily since! Thanks Ash, for this cool post on how JibberJobber can be useful in planning a wedding!

So yesterday I announced a special one-week offer at JibberJobber. And I have to say that I’m absolutely flattered and speechless by some of the blogger reactions that I’ve received. (note, there have been a number of people that have forwarded this special to their own networks, lists they manage, etc. Thank you SO much! If you want me to list you here just let me know)…

Scot Herick writes at CubeRules.com. We’ve known eachother for a while (seems like he is one of the first bloggers that I met so about 9 or 10 months?)… and he has endorsed or recommended JibberJobber before. But I never expected an endorsement like this. Wow.

Rob Merrill writes at UtahTechJobs.com (and other places). I e-mailed Rob last summer and said “hey, I’m a fellow Utah blogger, let’s hook up” and we’ve had a cool relationship ever since. As a matter of fact he’s one of my top favorite recruiters – and a really good friend. His post about JibberJobber and me are very flattering.

The story behind me and John Reinke is a fun one, and we’ve had a very interesting relationship. John has one of the funnest blogs to read – he is a cynic and critic like no other – he’s quick to give a well-though-out opinion and calls ’em like he sees ’em. This post blew me away.

Harry Joiner is one of the most respected recruiting bloggers and has an excellent blog (he’s been a favorite of mine since the beginning – he lives by “quality content”). Yesterday this post went up – it didn’t mention the special but it is a great endorsement of JibberJobber. Thanks Harry!

Carl Chapman and appeared on the blog scene shortly after I did and we hit it off really well. Two ambitious newbies… he’s offered me lots of advice over the last 9 or 10 months and has been very kind to me. I think he loves blogging on anything I do just to put a picture of Jessica Alba there… shoot, he’s the one that got recruiters to call me Jason Jessica Alba! Here’s his post about this… !

Laura Moncur is a veteran master of the web – she has the oldest quotations website, blogs on a number of blogs, is on twitter, … its pretty cool. I’ve read her personal blog since I got into the Utah blog scene and seen her comments on other Utah blogs… I finally got to meet her in March at the blogger’s dinner – it was really cool (we sat across from one another and her and her husband gave me advice on my pending book). She blogged about the special on her Gadets Page blog… thank you!

Phil801 is one of those internet folks that kind of doesn’t have a last name – he is his handle 🙂 Even in conversation I call him Phil801! He blogged about the special here, and had some really kind things to say about it.

Kent Blumberg – wow, I can’t remember how we met exactly but Kent has turned into a very close friend. He is an expert in management and leadership and has been a very close advisor for JibberJobber. When I went to Houston in January he was with me for most meetings that I had scheduled, opened doors for me, and was the definitely of “power connector. Kent has called me on the carpet when appropriate, offered wise advice, and more. You can’t have a more valuable friend than Kent – he is an expert giver.

Mick and Matt from Insourced have an excellent blog and they were also one of the first to blog on the special… they also have some cool stuff going on at their company! Thanks for hitting this Mick! You are right about the “you probably don’t have too much to lose!” line.

Alex Rudloff is the owner of Emurse.com (I send people to his site all the time…) – he might have been the first person to blog on the special.