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Thursday, 5 May 2016

Startups Don't Offer Freebies Forever... They Need To Make Money Too

My Experience With (Cloud Storage)

Sometime last year, or two years ago, I was surprised to receive information from my brother about an online cloud storage company. "You have to sign up for this!" he said. " is offering 15GB for every new user, and extra space for every new user you invite."

Wow, that was really great. I had been using Dropbox for a while but my personal space was small. I didn't excel at inviting people to sign up.... so my space was only 2GB. (That's really sad, for a Dropbox user. But things changed recently when I participated in the Dropbox Campus Cup Challenge.... where all students from a university can get increased space if more of them connect their student emails to Dropbox. But that's another story...)

So, I signed up for And it was great! 15GB to start was a big thing for me. (Never mind that Google Drive would be offering 15GB for new users, because with Google, all the emails and the Drive and the Photos will soon fill up your available space. My personal usage in Google Drive/Mail/Photos combined is up to 13GB at the moment....)

To top things off, you could invite friends and earn more. Just like Dropbox. But this as more generous. I think I had close to 30GB.... Can't remember, I'm getting old. But it was definitely more than 15GB.

Here's how someone at reviewed 4 stars (out of 5 stars). That's a very good 80%.

These guys gave new signups 15GB each, plus additional GB for invited new users.

This Was Their Viral Campaign for User Growth

For every user that you invited, you could get additional space. Here's how some of the tweets looked:

From 2013:

From 2014:

From 2015:

And this was from 2016....

But all that stopped on 1st May 2016, just a few days ago.

And Then Stopped Offering Free Cloud Storage

I guess it was bound to happen. People can't rely on goodies and freebies to go in the same sentence forever. A startup like isn't even as well known as, and even then I had trouble asking friends whether they would sign up for So when you're less famous and you've been giving away free storage without being to monetize, eventually you will have to.......

You'll have to go Premium Plans Only. Something to the effect of: "Heya sonny! Thanks for signing up with us, but now you've got to get your stuff and move to another cloud. Or you could pay us for our subscription plans and continue storing your stuff on our servers. Your choice. Do you feel lucky?"

A UK publication emailed them for some details. They didn't get a response, and that led to a tweet:
I too, was caught by surprise. But luckily I had a hunch that I should log in. From the user dashboard, I read their somewhat sad announcement that they would be shutting down the free service, and recommended users to migrate their files to another service using the service. (It's quite cool, and it's free to migrate from to Google Drive / Box / OneDrive. But it'll cost ya if you're using enterprise plans for cloud storage.)

And so, without much choice, I moved my stuff from servers to another server. In a way, I felt relieved to be able to access my data.

But I really pity this fellow:

Luckily, the guys at responded:

Thank You, for the Free Cloud Service (2013-2016)

Yeps, that's it. I just wanted to thank for their free cloud service. So did these guys:

What To Read Next

I was never a user of, but I heard that they offered 50GB free cloud storage to each new user. And then that stopped in November 2015.... When I checked their website, there are no free plans. So if you're keen to read about that, head on over to and read this post.

What It Means

Startups need money to run their operations. That's a fact. Not all of them will make money. That's also a fact. But a handful will succeed beyond expectations and become as big as Google, Facebook, PayPal, and Microsoft in their own industries.

So when you see a new startup offering a lot of freebies, it's really trying to grow its user base before monetizing it later. If it can't monetize enough, it will have to change business models, something the startup guys call a pivot. (Popularized by Steve Blank -- Google him if you want to learn more.) And if it fails to make money, investors will stop pumping in money. Employees will have to take a pay cut. Services have to stop. And sometimes the business still exists, but in a different form or format.

Sometimes the freebies just stop, and you've got to move your files to another cloud.

It's been nice on the cloud.

Thanks, guys.