This week, a Rockville entrepreneur seeks advice on how to convert free users of his motorcycle app to premium subscribers.– Dan Beyers

The entrepreneur

Jonathan Chashper has spent his career working with technology start-ups, both in Israel and in the United States. Since 2006, he has run ProductSavvy Consulting out of Rockville, working with young companies to help them develop products. One thing he’s learned is that a successful company is one that solves a real problem in the market.

That perspective came in handy when he was out on a ride with a group of motorcyclists and lost contact with his companions.

“It took a very frustrating, long hour to get connected with the group again. I figured there had to be a better way,” he says.

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From that experience Wolfpack was born.

The pitch

Jonathan Chashper, chief executive and founder, Wolfpack

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“We want to bring the connected vehicle experience to motorcycle riders. When you are on a motorcycle, you cannot call or message anyone. It’s really hard to communicate and it’s really difficult to keep together on the road when riding with others.

“There are 11 million motorcycle riders in the U.S. and 113 million motorcycle riders in the world. Roughly 70 percentof U.S. riders ride cruiser or touring bikes. And those riders like to invest in their motorcycles and ride together in groups.

“More than 40 percent of riders already use their phones for navigation. Wolfpack’s technology offers riders a smartphone app that helps to keep groups together and gives them a way to communicate easily. We use Google Maps as an underlying technology, (to allow for group turn-by-turn navigation) combined with our communication platform to allow users to plan and enjoy rides. Every rider sees the exact same navigation route on his or her phone so there is no confusion during the ride and everyone is navigated to the same destination. During the ride, the app shows the locations of all riders in the group within a mile of each other on a radar, making sure no one is left behind. The app also gives users the ability to communicate with each other while riding with a few taps of on-screen buttons that indicate pre-canned messages like ‘I need gas’ or ‘stop for food.’ (Each rider may have his or her own messages.)

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“Our basic version is free. The premium version is $1.99 per month or $19.99 per year, which adds the ability to plan rides in a more detailed way with multiple route stops or update the route as you go. The premium version also offers users the ability to chat with others in their group when they are not riding.

“We have had good traction since introducing the app October last year. When you download Wolfpack, you need to add users to your pack. That makes it viral because users are then pushing this out to other riders.

“Our No. 1 challenge is converting free users to premium users. We have 4,000 users right now; about 30 are paying users. We have also decided not to use advertising on our app, so our second challenge is how to generate other revenue streams.”

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The advice

Elana Fine, executive director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business

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“Think about offering users a trial subscription instead of the ‘freemium’ model, where you have a free version and expect users to upgrade to a paid version. Often freemium subscription models generate most of their revenue from only about 10 percent to 20 percent of their users. This model typically works well for companies with higher premium price points where the power users can subsidize the free users.

“My concern with your model is that you won’t get enough of your basic model subscribers to upgrade, so it will be very difficult to generate the revenue you need off of the premium model. With the trial subscription model, you’ll get users trying Wolfpack for free, but then they are more likely to want to continue to use it and pay for it when their trial ends, particularly because they are inviting other riders onto the app. Once riders establish their ‘Wolfpack,’ it seems likely that they’d continue to pay the $1.99.

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“It will be interesting for you to experiment with the price point to see how much people are willing to pay. In the short run, doing the trial subscription will help you convert users to the paid subscribers to get that early revenue traction you need to sustain the business.

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“As you think about other revenue streams, think about other verticals that could use this technology. Are there opportunities beyond direct consumers where you would have a business-to-business sale?”

The reaction

Chashper

“I totally agree with your advice about the trial model. We are now actually limiting the number of free rides to eight, then pushing users to upgrade to our paid offering. We are also planning to increase the price starting in 2018.

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“In addition to consumers, we are going after companies that plan motorcycle trips and companies that provide safety response and roadside assistance services to motorcycles.”

Looking for some advice on a new business, or need help fixing an existing one? Capital Business and the experts at the University of Maryland’s Dingman Center for Entrepreneurship at the Robert H. Smith School of Business are ready to assist. Contact us at capbiznews@washpost.com.

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