Ning Focuses on Paying Clients Now. And What That Teaches Us About Freemium Services in Nigeria

The social network firm, Ning, is focusing largely on corporate clients these days. They are basically saying to non-paying customers that your time with us has passed. They want to attract corporate clients and create wealth for the investors. People to think that social media is a hobby in California. No, these are companies funded by Wall Street companies. They have to be profitable.

Now, Ning is charging fees for services it has given the world for free. The era of Freemium has ended in Ning.

(Meanwhile Ning, go and register ni.ng and join the new Nigerian domain club which is the coolest thing now. Bi.ng has gotten one and Microsoft could not be happier).

The interesting aspect is that by having this revenue model, the company is doing better.  They have seen 400% increase in their revenue since this paying model was introduced.  Of course, many small sites that could not pay have closed – 80% of sites that depended on the free Ning services went down. At least the other 20% are paying and the firm is better off.

The lesson here is that this illusion that everything should be free is wrong. Most times, the ads model does not make sense. It cannot cover most of the bills. And when people build products around these free services, they could be in serious shocks if something like this happens.

In Lagos guys, forget about the number of downloads, the page views, and all those non helpful metrics and find ways to make money out of your ideas. It is better to nurture 1000 paying customers than give your products to 40,000 in Lagos – for free. You may be shocked that you cannot make anything from the 40,000 and after few months will shutdown.

The vital roadmap to getting paid customer is creating good products and services. You must differentiate yourself before they can pay. Think local and make a case that by paying, customers will be funding innovations in your company.