Meetup About Business Model Lessons

from the don't-charge-for-what-was-once-free dept

Meetup Inc. become something of an internet darling during the US Presidential campaigns, after people started using it for political organizing. The concept was straight-forward. Use the web to find like-minded individuals in a certain area who could (yup) "meet up" in person. What was unclear from the beginning, though, was how Meetup was ever going to make money. Originally, the plan was to get money out of the venues where the various meetups occurred. Apparently, that didn't work out, and now, Meetup is making news for its decision to charge each "group" $19/month to keep going. They certainly expect to lose many of their groups, and lots of people are already noting that the price seems quite steep for what were mostly small, informal gatherings. The real issue, though, is that it looks like Meetup has forgotten the first rule of internet-based business models: don't charge for something that was free before. It's very, very difficult to make that work (there are a few small exceptions). Generally speaking, though, if people expect something to be free, suddenly turning around and charging for it is seen as swiping the rug out from under them. They embraced your offering, in part, because it was free. You can charge for new and additional services -- but pissing off most of your users with surprise fees, after being sold on the free idea, tends to come back to bite many companies that have tried it. If anything, it tends to encourage competition to come in and offer what you used to offer... for free.

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