Why I’d Rather Have One Angry Customer Than a Bunch of Free Users

Almost since I started my roommate-finding platform Roomi, my priority has been to get paying customers. My philosophy, in fact, is that I’d rather have just one unhappy customer than hundreds of free users.

Some startup founders spend years offering their products for free with the aim of later converting their free users into paying customers. They build them for years without testing them, only to find out people don’t want to pay. I was one of them. I took three years to start charging because I was scared my users would run away and never use the product again

Here’s why I now advocate the opposite approach, and how you can do that too. 

The advantages to seeking payment early on

Charging is scary: It opens up the possibility that you’ll realize people don’t find your product worth paying for. But that’s exactly why you should do it. 

People’s willingness to pay for your product will tell you whether it’s necessary or just nice — and, if you plan to charge, you want it to be necessary. Asking for payment early on will tell you whether you need to alter your product or payment model in order to make it more valuable to potential customers. 

There are a lot of amazing companies built on growing their base of free users, but at the end of the day, you have to pay the bills. If you want to build a long-lasting business and a product that actually solves problems, you need to keep adding value. You ultimately save money, time, and resources by finding out early on whether people find your product worth paying for. 

How to get more paying customers

One way to get customers is to invest in marketing so that more people find your product, but a lot of startups don’t have the money for marketing. You can actually start by finding users for free using social media, Quora, Reddit, and word of mouth, then convert your free users into paying customers by experimenting with new features, different pricing models, and value adds. You can ask your customers what they’d be willing to pay for, how much they’d be willing to pay, and why. 

Initially, you might offer a service for free or a discounted price so that users can see if they find value in it, then ask them to pay to continue using it. An advantage to this approach is that people who use the feature you’re offering may also talk about it and recruit more users.

Roomi converts users into paying customers by giving them the option to boost their listings and profiles to get more eyes on them. But we also developed features to increase the chances that people will do this. For example, we created different offerings based on how many days people boost their profiles and listings for, giving them different options to get the best value for their money.

Companies can also prompt their current paying customers to pay more. Amazon, for example, does this by offering multiple kinds of products, so that people who, say, buy their groceries on the site might also use its streaming service. 

Embracing angry customers

I’m always seeking feedback from customers, whether it be positive or negative — and like I said,

I’d rather get a customer with negative feedback than none at all. 

I take this approach for a few reasons. First of all, people who have had bad experiences with your company are just as likely to talk about it as those who are happy with it, and there’s research supporting the idea that any press is good press. 

Second, the unhappy customers are the ones who can teach you how to add value to what you’re offering, which will ultimately help you get more customers. Usually, customer complaints boil down to lack of value: They feel they paid too much for something that’s not working or that crashed or that’s taking up too much of their time.

Their complaints will reveal where the value you’re delivering falls short. 

And third, with a helpful support team, you can usually convert angry customers into happy customers. You just need to empathize with their concerns and rectify the situation by adding value. 

I created a customer service team from day one. This sends the message that you’re there to listen and help customers however you can. Then, you can use the feedback they give you to create a product even more people are happy to pay for — and that’s the ultimate goal.