Freemium

Today, we’re simplifying our monthly subscription options, and introducing a free plan.

There are now 3 monthly plans:

  1. Free
  2. Standard ($8/month)
  3. Pro ($12/month)

Each monthly plan pays 80% royalties, and each can create up to 100 books and/or courses.

(The $99 flat fee option for books or courses still exists. It also pays 80% royalties, of course.)

What About Grandfathering Existing Authors?

(This section was added for clarification on 2018-05-23.)

In April 2018 when we first introduced SaaS pricing when introducing courses, there were a bunch of different plan levels (Standard, Pro, Gold and Platinum), and we grandfathered authors into different plans based on lifetime royalties they had been paid.

With the change to Freemium in May 2018, we simplified the plans greatly. We also grandfathered everyone who had earned at least $1,000 by April 20, 2018 into a lifetime Pro plan. This Pro plan is as good as the Platinum plan had been in the past, so this is a win for everyone.

Thanks very much to every Leanpub author who has helped us get to where we are today!

What’s the same between the Free, Standard and Pro plans?

The Free, Standard and Pro plans are identical in many important ways:

  1. They all pay 80% royalties. We want to pay better royalties than Amazon and Apple, at every price, for all our authors. (Books which were grandfathered at 90% minus 50 cents, still are, of course.)
  2. They can all create up to 100 books and/or courses. This has a huge advantage for us, and for our authors: if an author is paying for a Standard or Pro plan, they can downgrade to the Free plan without exceeding some published book or course limit. This way, all of an author’s books and/or courses can remain in the Leanpub store, regardless of what plan they have.
  3. They can all use every writing mode: Leanpub Visual Editor, Leanpub Text Editor, Your Computer and Bring Your Own Book.
  4. They can all use every sync mode: Dropbox, GitHub and Bitbucket.
  5. They all support the Leanpub API for book previewing and publishing.
  6. They can all import Word, HTML, WordPress, Blogger, and Wattpad.
  7. They can all use either Markua or Leanpub Flavoured Markdown when writing in Leanpub Text Editor or Your Computer mode.
  8. They can all generate PDF, EPUB, MOBI, Print-ready PDF, Unbranded Ebook, and HTML.
  9. They can all have Discourse forums. (Disqus support is being turned off on June 11.)
  10. They all get the great support that Leanpub is famous for, including Intercom, hello@leanpub.com, our Google Group and our Discourse forum.
  11. They all support variable pricing for books and courses, in which there is a minimum price and a suggested price.
  12. The minimum and suggested prices can be Free or between $4.99 and $500. (The suggested price must be at least the minimum price, of course.)

With all these features in the Free plan, you’d wonder how we’re ever going to sell Standard and Pro plans…

What’s the difference between the Free plan and the Standard and Pro plans?

  1. While the Standard and Pro plans have unlimited book or course preview or publishes in a month, the Free plan is limited to a maximum of 20 previews or publishes in a month. This number is combined for previews and publishes, and is combined over all books and/or courses where you are the primary author.
  2. While the book and course pages for the Standard and Pro plans just have the Leanpub marketing near the bottom of their landing page, after the 45-day 100% Happiness Guarantee, the Free plan will also have some small, tasteful Leanpub marketing near the top of their landing page.
  3. While the Standard and Pro plans support custom themes for books, the Free plan is limited to three theme choices: Business, Fiction and Technical.

Here’s why we’ve chosen these differences:

We’re huge fans of MailChimp–both of their service and of their pricing. MailChimp has a good Free plan for people who are just starting out. By the time you want to pay for MailChimp, you are convinced of the value they offer.

Similarly, we want the Free plan on Leanpub to be something that an author can happily live with until they are fully convinced of the value that Leanpub offers.

If you are not familiar with Leanpub, the notion that you would want to generate a full preview of your ebook more than 20 times in a month seems a bit silly.

Furthermore, if you are familiar with the typical processes used by traditional publishers to produce ebooks, the notion that you would actually want to publish your ebook more than 20 times in a month seems outright insane.

Now, once you’re familiar with the Leanpub workflow, and that you can preview or publish your book with one button click, you will realize how easy it is. So, you’ll start doing it–a lot. (This is especially true if you set up a post-commit hook on GitHub via the Leanpub API!)

In that case, it will be really easy to bash into the 20 preview or publish per month limit. (This will also be true if you create a number of books or courses.)

But, by that point, Leanpub will easily be worth $8/month to you.

Finally, in terms of the planned tastefully-small Leanpub marketing near the top of the page: Leanpub is a viral loop company, but our viral loop relies on an author creating a book. So, it’s slower than, say, Twitter. Our adding some marketing near the top of the page will enhance this viral loop, which is important for us. And if an author feels strongly about not wanting it there, then that’s also worth $8/month to them.

What’s the difference between the Standard Plan and the Pro plan?

So, while the Free plan is fantastic, the Standard and Pro plans will contain a few key improvements which we think will convert a significant enough percentage of our Free plan customers. But what’s the difference between the Standard and Pro plans?

We want the Standard plan to meet the needs of almost everyone.

The Pro plan is identical to the Standard Plan, except it adds three things:

  1. Google Analytics support
  2. MailChimp integration
  3. InDesign export

The Pro plan should differentiate from the Standard plan by adding pro features, not by imposing arbitrary limits on the Standard plan. Things like Google Analytics, MailChimp integration and InDesign export definitely are pro features.

In terms of the pricing of the Pro plan, we think it should be about 50% more expensive–just like a MacBook Pro versus a MacBook.

That’s the theory, anyway. We’ll see how it plays out in the months ahead!

Leanpub has changed its pricing a couple times in the past couple years. How have the pricing changes worked out for you?

Frankly, they’ve been very promising, and each pricing change has been an improvement on the previous pricing. However, we’re not happy to settle for a local maximum; we want to find the ideal pricing for Leanpub.

Also, along the way, we have accumulated a lot of validated learning about customers, and we’ve paid millions of dollars of royalties to our authors in the process. We’ve also built the best ebook creation platform in the world, and we’re well on our way to having built the best course creation platform in the world.

Specifically, Leanpub’s book creation pricing history can be segmented into 4 phases:

  1. Free (April 2010 - October 2016)
  2. Flat Fee (October 2016 - April 2018)
  3. Flat Fee or SaaS (April 2018 - May 2018)
  4. Freemium (May 2018 - ?)

For the first six years of Leanpub’s life, we were an amazing, free book creation workflow subsidized by an optional storefront.

Then, in October 2016 we started charging a $99 flat fee to create a book. Our storefront revenue stayed roughly constant, but we added tens of thousands of dollars of revenue from book writing purchases.

However, charging the flat fee to create a book obviously meant that the number of new books created per day decreased.

Also, the LTV of a one-time $99 purchase was $99, plus any store revenue and viral loop revenue of course. Now, the greatest thing about monthly recurring revenue (MRR) is that it recurs. So, we wanted to see if adding a monthly fee option would be well-received.

So, last month we added a SaaS option. Authors could pay $8/month for a Standard plan, and more money for Pro and higher plans.

Over the past month we have found that more than half of our new books have been created using the monthly plan approach, with almost all of their authors choosing the $8/month Standard plan. However, a significant number of authors have still chosen the $99 flat fee approach.

In terms of the results of our SaaS experiment over the past month, a few of the immediately obvious ones are:

  1. The number of SaaS + flat fee books was higher than the previous flat fee only approach.
  2. The number of SaaS + flat fee books was still similar to the previous flat fee only approach.
  3. The change from 90% minus 50 cents to 80% royalties was very well received. Authors understood how important it was to Leanpub, and were very supportive. We even saw people opting in to the new 80% royalty rates to help us.

After much reflection about who we are as a company, we realized a number of deeper things:

  1. We are in business to build amazing tools for authors of books and courses. We are not in business to get really good at buying Facebook ads and Google ads. Since we dislike doing it, and since we try to conduct ourselves with some taste and dignity, we will never be great at it. Also, the customer acquisition cost (CAC) would have to be below $99 for ad buying to be effective, and if you want to know the definition of a crowded space, it’s ad buying. Instead, the marketing that we are good at is the kind that we really enjoy doing, specifically the Frontmatter and Backmatter podcasts, providing amazing support to authors and readers, and connecting with our readers and authors on social media.
  2. We have hundreds of thousands of unique visitors to Leanpub every month. We need to focus on marketing the Leanpub book and course creation workflow to these people, not to random people who have never heard of us. Since these people are already on the Leanpub website, we don’t have to pay Google, Facebook and Twitter to get them there.
  3. We have actually created the best way in the world to create an ebook. This is not hyperbole, it’s actually true. Our best marketing is just getting people to try our workflow. Having a free plan is the best way to do this, and nothing will ever change that. So, regardless of how much funding we had raised (we’re bootstrapped, by the way), Freemium would be the best approach.
  4. Our course workflow is also maturing, and the fact that you can generate a MOOC from a single plain-text manuscript–even a branch of the same manuscript that you use to generate an ebook–is mind-blowing. In case you didn’t know: you can create a full MOOC (text, video, audio, exercises, quizzes and a certificate) from a plain text document with one click. When our course workflow has matured slightly and has more live examples of usage, we will have a similar lead to what we currently have with ebooks. Our work on Markua has made us so well-positioned in the MOOC space, you’d assume it was some kind of master plan. Instead, it actually just landed in our laps! Regardless, we have an amazing opportunity here.
  5. We now have other ways to monetize, besides just the Standard and Pro plans and our portion of book sales. For example, spots on The Shelf cost up to $349, and provide their purchasers with amazing promotional value. So, if someone sign up for a Free plan and then buys a $29, $59, $149, $249 or $349 spot on The Shelf, we have made real money from that person, delivering real value to them in the process.
  6. Both the paid monthly plans and the flat fee options are here to stay. Each of them have double-digit percentages of usage, and we can tell that there are serious authors choosing both options.

What’s Next?

If you’ve ever considered writing a book or creating a course: Make one! Or 10 of them. Or 100.

Seriously, if you haven’t tried creating a book or course on Leanpub: What’s stopping you?

Creating a book or course on Leanpub is now free.

Even if you choose to pay, it’s 100% risk-free: the Standard and Pro plans have 14-day free trials, and the $99 option has a 45-day refund period, just like any Leanpub purchase. And the Free plan is, well, free!

To create a book or course, go to https://leanpub.com/create/book. You can choose between the Free, Standard or Pro plan there, as well as the $99 Flat Fee option.

Finally, if you want to promote one of your books or courses, you can do so by buying a spot on The Shelf at any time. To do this, you simply go to https://leanpub.com/shelf/buy. Shelf spot prices range from $29 to $349 based on length.

Conclusion

All of us at Leanpub are very excited about our future. For the first 6 years of our life, authors could create books for free. So, this is kind of like going back to our roots, but with having learned how to create both monthly recurring revenue and flat fee revenue from book and course writing purchases in the process.

We expect that this will be the best of both worlds for us: we’ll get the increased number of author signups that come with a free plan, but with the added monetization provided by both the $99 flat fee and the $8/month and $12/month plans.

Most importantly, adding a Free plan means that many more authors are now able to try the Leanpub workflow for themselves, regardless of their budget.

There is an amazing opportunity for Leanpub in both books and courses. Switching to the Freemium approach is something we are doing out of ambition. Leanpub exists to win in two huge markets, not just to carve out a small niche. We have learned a lot from our customers over the past 8 years, and we’re very excited about the next 8 years!

I would like to sincerely thank every Leanpub author and reader who has helped us so far. We’re just getting started.

Peter Armstrong

May 16, 2018

Update 2018-05-23: Adding a section about grandfathering existing authors near the top.