Padlet’s Price Update Riles Teachers, Raises Questions About Sustainability of Freemium Models | EdSurge News

Edtech Business

Padlet’s Price Update Riles Teachers, Raises Questions About Sustainability of Freemium Models

By Tony Wan     Apr 4, 2018

Padlet’s Price Update Riles Teachers, Raises Questions About Sustainability of Freemium Models
Padlet public sample gallery

Over the years, many educators took to Padlet, a free digital bulletin board where teachers and students could post messages, images, videos and links to online resources. But the San Francisco-based company’s sudden switch to a new pricing plan has upset teachers who had become used to a generous, mostly free product.

For many educators, it’s a lesson that certain free things are too good to last. And for the education technology industry, it’s a reminder of that the “freemium” business model presents plenty of challenges—even when the product becomes very popular.

Founded in 2008, Padlet’s founder and CEO, Nitesh Goel proclaimed it “the easiest way to put stuff on the web.” The tool attracted users with a simple interface that allowed users to drag and drop files from their desktop and add links from the web onto a web-based canvas (called a “padlet”). It proved to be a versatile tool used by educators to plan professional development sessions and facilitate group projects as teachers and students alike could share notes, photos, videos and audio clips.

The tool was available for free, and users could make as many padlets as they wanted. But no longer. When Padlet users logged in to their accounts this week, they saw a pop-up message announcing a cap on the number of padlets allowed under the free “Basic” plan. The cap number varies—but regardless of how many padlets a user has, he or she can only make three more.

In other words: If a user already has 30 padlets, he or she can now have a maximum of 33. If this person deletes old padlets, the cap will still be 33. But new users who don’t have any pre-existing padlets will be limited to a total of three.

An upgrade to a paid plan, starting at $8.25 per teacher per month, would remove the cap. (The company already offers premium pricing for schools and other organizations with multiple users.)

For Laurie York, who’s created 82 padlets since first using the tool in 2010, the initial response was “disappointment.” In an email to EdSurge, the fourth-grade teacher at Gridley Unified School District in California wrote that “the cost of $100 a year (literally $0 to $100, as the saying goes) is simply not a feasible cost for many in education.” Other teachers expressed similar frustration and shock across Twitter.

In the pop-up website message signed by Goel, he anticipated that the change would be upsetting. “Our numbers show that a lot of you will benefit from this change,” he wrote. “But some of you won’t like it. It is possible that this sudden hard limit on the number of padlets will disrupt your work. It is possible you will now have to upgrade to use a software that was free. If you are in this group, I’m very, very sorry.”

Popularity at a Price

Padlet’s decision, however unpopular, is not uncommon in the edtech industry, where businesses often make disruptive changes. Education companies change pricing models, or simply close shop at a whim. Even Amazon, for all its coffer and reach, recently decided to wind down TenMarks’ instructional math and writing tools.

For Padlet, the issue stemmed from its over-generous “freemium” business model, where a company makes a portion of its offerings available for free, and offers advanced features for a fee. (The logic is that if enough users are hooked on the free plan, a portion of them will upgrade to a paid premium account.)

But what happens when most users decide the basic version is good enough and stick with it?

“For us, it was very clear,” Goel says in an interview with EdSurge. “The more padlets people make, the more the cost for the company increases.” Close to 10 million people visit Padlet every month, he claims. The company has raised $1.6 million in venture capital to date.

As the company of six employees added features over the years, including the ability to record video and audio, it underestimated the costs associated with supporting its large user base and a ballooning amount of multimedia assets. “The cost of running Padlet is a strict function of the amount of content on the platform,” Goel states. Even just a 10 percent increase in the number of users can double the company’s costs, he adds, if they are frequently uploading content.

The financial rationale made sense to Chad Flexon, the academic innovation and STEM coordinator at Harrison Township School District in New Jersey. “I know Padlet needs to make money. I understand their explanation,” he says in an interview with EdSurge. “They’re basically becoming a cloud storage company because they’re allowing us to save massive files in one link.”

He estimates that roughly 30 teachers across his district use Padlet for everything from creating thematic units for reading assignments, to using it as a space for collaborative projects and formative assessments for students. None of them paid, however, and Flexon is now mulling over whether it’s worth it.

“We usually like to cover the cost of tools for our staff. But we are also big believers in equity. If one teacher is asking for a tool, we want to see how we can get others onboard to give all students access,” he says.

Padlet’s abrupt decision should be a lesson that “most originally-free edtech sites eventually create a cost for their users,” says York, the fourth-grade teacher. Like Flexon, she “understands their need to start charging.” But the current price tag may just be too steep.

“I completely understand why people are angry,” Goel tells EdSurge. “I’ve been on the other end. In the early days, when we were a penny-pinching startup, I was livid when a tool I was using suddenly raised the prices.”

In response to teachers’ frustration, Goel says his team is working on changes to its pricing model, including a new, possibly cheaper plan. Also in the works is a referral program that gives users additional padlets if they refer Padlet to a friend or colleague.

Edtech Business

Padlet’s Price Update Riles Teachers, Raises Questions About Sustainability of Freemium Models

By Tony Wan     Apr 4, 2018

Padlet’s Price Update Riles Teachers, Raises Questions About Sustainability of Freemium Models
Padlet public sample gallery

Over the years, many educators took to Padlet, a free digital bulletin board where teachers and students could post messages, images, videos and links to online resources. But the San Francisco-based company’s sudden switch to a new pricing plan has upset teachers who had become used to a generous, mostly free product.

For many educators, it’s a lesson that certain free things are too good to last. And for the education technology industry, it’s a reminder of that the “freemium” business model presents plenty of challenges—even when the product becomes very popular.

Founded in 2008, Padlet’s founder and CEO, Nitesh Goel proclaimed it “the easiest way to put stuff on the web.” The tool attracted users with a simple interface that allowed users to drag and drop files from their desktop and add links from the web onto a web-based canvas (called a “padlet”). It proved to be a versatile tool used by educators to plan professional development sessions and facilitate group projects as teachers and students alike could share notes, photos, videos and audio clips.

The tool was available for free, and users could make as many padlets as they wanted. But no longer. When Padlet users logged in to their accounts this week, they saw a pop-up message announcing a cap on the number of padlets allowed under the free “Basic” plan. The cap number varies—but regardless of how many padlets a user has, he or she can only make three more.

In other words: If a user already has 30 padlets, he or she can now have a maximum of 33. If this person deletes old padlets, the cap will still be 33. But new users who don’t have any pre-existing padlets will be limited to a total of three.

An upgrade to a paid plan, starting at $8.25 per teacher per month, would remove the cap. (The company already offers premium pricing for schools and other organizations with multiple users.)

For Laurie York, who’s created 82 padlets since first using the tool in 2010, the initial response was “disappointment.” In an email to EdSurge, the fourth-grade teacher at Gridley Unified School District in California wrote that “the cost of $100 a year (literally $0 to $100, as the saying goes) is simply not a feasible cost for many in education.” Other teachers expressed similar frustration and shock across Twitter.

In the pop-up website message signed by Goel, he anticipated that the change would be upsetting. “Our numbers show that a lot of you will benefit from this change,” he wrote. “But some of you won’t like it. It is possible that this sudden hard limit on the number of padlets will disrupt your work. It is possible you will now have to upgrade to use a software that was free. If you are in this group, I’m very, very sorry.”

Popularity at a Price

Padlet’s decision, however unpopular, is not uncommon in the edtech industry, where businesses often make disruptive changes. Education companies change pricing models, or simply close shop at a whim. Even Amazon, for all its coffer and reach, recently decided to wind down TenMarks’ instructional math and writing tools.

For Padlet, the issue stemmed from its over-generous “freemium” business model, where a company makes a portion of its offerings available for free, and offers advanced features for a fee. (The logic is that if enough users are hooked on the free plan, a portion of them will upgrade to a paid premium account.)

But what happens when most users decide the basic version is good enough and stick with it?

“For us, it was very clear,” Goel says in an interview with EdSurge. “The more padlets people make, the more the cost for the company increases.” Close to 10 million people visit Padlet every month, he claims. The company has raised $1.6 million in venture capital to date.

As the company of six employees added features over the years, including the ability to record video and audio, it underestimated the costs associated with supporting its large user base and a ballooning amount of multimedia assets. “The cost of running Padlet is a strict function of the amount of content on the platform,” Goel states. Even just a 10 percent increase in the number of users can double the company’s costs, he adds, if they are frequently uploading content.

The financial rationale made sense to Chad Flexon, the academic innovation and STEM coordinator at Harrison Township School District in New Jersey. “I know Padlet needs to make money. I understand their explanation,” he says in an interview with EdSurge. “They’re basically becoming a cloud storage company because they’re allowing us to save massive files in one link.”

He estimates that roughly 30 teachers across his district use Padlet for everything from creating thematic units for reading assignments, to using it as a space for collaborative projects and formative assessments for students. None of them paid, however, and Flexon is now mulling over whether it’s worth it.

“We usually like to cover the cost of tools for our staff. But we are also big believers in equity. If one teacher is asking for a tool, we want to see how we can get others onboard to give all students access,” he says.

Padlet’s abrupt decision should be a lesson that “most originally-free edtech sites eventually create a cost for their users,” says York, the fourth-grade teacher. Like Flexon, she “understands their need to start charging.” But the current price tag may just be too steep.

“I completely understand why people are angry,” Goel tells EdSurge. “I’ve been on the other end. In the early days, when we were a penny-pinching startup, I was livid when a tool I was using suddenly raised the prices.”

In response to teachers’ frustration, Goel says his team is working on changes to its pricing model, including a new, possibly cheaper plan. Also in the works is a referral program that gives users additional padlets if they refer Padlet to a friend or colleague.

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