Grupo Vidawa: Rethinking a Freemium Business Model
(9 pages of text)
In 2016, Grupo Vidawa, a small Colombian software company, launched KANAN Cloud, a freemium software service targeted at small- and medium-sized businesses. The software aimed to help these businesses meet new occupational health and safety (OHS) regulations that were to come into effect in January 2017. A year after launch, KANAN Cloud had only 500 free users and six paying customers. Software use was also extremely low. A few circumstances seemed to explain these results: the OHS regulations appeared overly complex to most small business owners, the regulations kept changing throughout 2017, and the OHS service market became saturated with cheap “quick fix” offers that did not meet legal requirements but fit the immediate needs and tiny budgets of many small businesses. Given this, Grupo Vidawa had to decide the next steps for KANAN Cloud.
This case was designed to be used in undergraduate- or graduate-level classes in courses on digital entrepreneurship, business model innovation, or information systems. The typical topics in these courses that are covered by this teaching note are opportunity recognition and analysis and business model adjustments from a lean start-up perspective. After working through the case and assignment questions, students will be able to
- analyze a business opportunity;
- describe a business model and its comprising elements;
- estimate the potential sales, costs, and profits of a freemium business model;
- evaluate the results of an intrapreneurship initiative, and discuss the underlying causes of these results;
- assess and justify appropriate pivots (i.e., adjustments) to a business model; and
- propose specific ways in which business model hypotheses can be tested.
Information, Media & Telecommunications
Colombia, Small, 2017
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