Chris Dixon

I got my first computer (TRS-80 Model 1) in 1980 at the age of 8.   I got my second computer – an Atari 800 – two years later.   I was living in Springfield, Ohio.  Very few people were interested in computers in that area then.   The only people that seemed to be were engineers at the nearby Air Force base, Wright Patterson.  Every month, I used to get my parents to drive me over to meet the engineers there for Atari “user group” meetings.

Like most computer enthusiasts back then, I wanted to program video games.  This of course was pre-internet and before the PC boom, so information on computer programming was scarce.   At the user group meetings we would trade information as basic as what memory locations performed what functions, or new techniques people had developed (vsync interrupt, page 6 techniques – old school readers will know what I mean).  After a while I was increasingly frustrated by the lack of technical information so I decided to write a letter to Atari asking them for manuals.  I got a hand written letter back from Alan Kay, who was already quite famous at the time and was working at Atari, along with a giant box full of manuals and technical documentation.  I’ve never met the man but I give him a lot of credit for my lifelong interest in computers.

I was reminded of this yesterday when I had the pleasure to meet with Om Malik.  Om took time to meet with me years ago when I was struggling to get SiteAdvisor off the ground.  No other popular bloggers would meet with me, but Om spent over an hour listening to me talk and giving me advice.  I was introduced to Om by Ron Conway who invested in my company despite the fact that the industry experts he introduced me to as part of diligence hated my idea.

People never forget who helps them when they are struggling.  It’s a cliche, perhaps, but true – and a good thing to always keep in mind.  Thanks Alan, Om, and Ron.

People usually think of business competition as occurring between substitutes – products that serve similar functions for the user.   Famous substitutes include Coke and Pepsi, and Macs and PCs.

In fact, especially in the technology sector, some of the most brutal competition has occurred between complements. Products are complements when they are more valuable because of the existence of one another – e.g. hotdogs and hotdog buns, PCs and operating systems.

There is inherent tension between complements.  If a customer is willing to pay $2 for a hotdog plus bun, the hotdog maker wants buns to be cheaper so he can capture more of the $2, or lower the price of the bundle and thereby increase demand.  (For a great primer on competition between complements, I highly recommend this Joel Spolsky post.  I’ve also been writing about complements, here and here).

Microsoft is famous for destroying companies that offer complementary products, either by bundling complementary apps with Windows (Windows Media Player, MSN Messenger, IE) or aggressively competing head-to-head against the most popular ones (Adobe, Intuit).  The surviving 3rd party apps are usually ones that are too small for Microsoft to care about.  The best (selfish) economic situation for a platform like Windows is lots of tiny complements that have little pricing power but that make the platform itself more valuable.

One of Google’s main complements is the web browser and desktop operating systems, which is why they built and open sourced the Chrome browser and OS.  Google’s other big complement is broadband access – hence their excursions into public Wifi and cellular spectrum.

So what does all of this have to do with Twitter?  At some point, significant (non-VC) money will enter the Twitter ecosystem.  I have no idea whether this is will be by charging consumers, charging businesses users, search advertising, sponsored tweets, licensing the twitter data feed, data from URL shorteners, or something else. But history suggests that where there is so much user engagement, dollars follow.

For the sake of argument, let’s suppose Twitter’s eventual dominant business model is putting ads by search results.   Who gets the revenue when a user is searching on a 3rd party Twitter client?   Even if Twitter gets a portion of revenue from ads on 3rd party apps, there will always be an incentive for them to create their own client app, or to “commodotize” the client app by, say, promoting an open source version.

I’m not saying this will happen in the immediate future.  First, Twitter and a lot of app makers* have raised a lot of money, so aren’t under (much) pressure yet to generate revenues.  Secondly, some of the lucky Twitter apps will get acquired by Twitter.  I think this is what many of their investors are hoping for.  But those that aren’t so lucky will eventually find their biggest competitor to be Twitter itself, not the substitute product they see themselves as competing against today.

* when I say Twitter apps, I mean any product, website, or service that eventually makes money and depends on Twitter’s API.

I recently wrote a post where I said entrepreneurs need to understand term sheets on their own, without the assistance of lawyers.  I got quite a bit of criticism for this, e.g.

@rafer Never ever sign a term sheet without your atty’s review. sry but thats crazy talk @cdixon http://bit.ly/UOgiC myreblog http://bit.ly/cJ9d0

I’ll agree that entrepreneurs, especially first timers, should have lawyers review everything they sign.  But I stand behind my main point:  you can’t outsource the understanding of key financing and other legal documents to lawyers.

Here’s just one of many examples of why.   A company I know was recently confronted with the following trade off.  Get a higher valuation with full ratchet anti-dilution or a lower valuation with weighted average anti-dilution.   The only way to assess this trade off is to understand what these terms mean and try to compute the expected value of the two offers.   In this particular case what matters is the likelihood of a future down round.  This is a business judgment, not a legal one, and the people best able to make it are business people.

You also need to consider your personal utility function.  For example, as a founder, I don’t care very much about anti-dilution provisions because I figure in the cases where it matters I will already have been fired and my equity crammed down.

My point is you can’t leave these judgements to lawyers.   They don’t have the expertise to make these expected value calculations nor do they understand how various scenarios affect the founders personally.

Another common mistake entrepreneurs make is let their lawyers argue over terms that don’t matter.  This puts deals at risk and costs money.  You need to understand what they are arguing over to decide when it matters and when it doesn’t.

You learn about these legal issues from experience, by talking to lawyers, by talking to experienced advisors, and by reading blogs and books (every entrepreneur should read The Entrepreneur’s Guide to Business Law).

First let me say I love Google.  I think Google created one of the greatest inventions of the past century and continues to give back much more value to the world than they “capture” in revenue.

Secondly, I think Google itself has almost nothing to do with the decline of newspapers.  That is due to, among other things, 1) the newspapers losing their classified business to Craigslist and others, 2) the internet making geography irrelevant and hence causing newspaper competition go from 1 or 2 papers per market to thousands.

That said, I am bothered by the arguments I hear in internet circles of the form:

Premise 1:  X can stop working with Y at anytime.  (NYTimes could opt out of Google search results / Google news at any time)

Premise 2:  X would lose out if it did that (NYTimes would lose traffic and revenue if they opted out of Google).

Conclusion:   Hence Y is helping X.  (Google is helping the NYTimes and the NYTimes should stop whining.)

The conclusion doesn’t follow from the premises.  The NYTimes might in fact be better off in a world without Google.  More specifically, they would be better off if the search engine market were genuinely competitive.

The power dynamics between Google and the newspapers has the same dynamics of any buyer-supplier market.

Newspapers, like all websites, are suppliers of content to Google.  In most markets, with genuinely competitive buyers and suppliers, the revenues are shared between buyers and suppliers in proportion to their relative bargaining power.  Their bargaining power depends on how fragmented each side of the market is – how many genuine alternatives each company has.

Normally there is some reasonable level of interdependence between buyers and suppliers, hence the revenue split is positive and non-negligible. Pepsi and Coke are always jostling with their bottlers about the percentage split but in the end each side usually makes a profit.

And in situations where the relative bargaining power is severely imbalanced, there are normally business mechanisms for correcting the imbalance.   For example, before Staples was founded, office supply stores were mostly mom-and-pop shops that were tiny relative to their suppliers, and hence had very little bargaining power.  The central business concept behind creating Staples was to “roll up” these shops and thereby increase their bargaining power with their suppliers.  In doing so, they were able lower their costs and increase their margins even while lowering their prices.   One of the primary reasons companies merge is to increase bargaining power with respect to buyers and suppliers.

As a “buyer” of web content, Google has incredible dominance, so much so that the price they pay for that content is zero.  If the NYTimes decided to opt out of Google tomorrow, Google users would barely notice.  (Perhaps the only content site that would matter and hence in theory could bargain with Google would be Wikipedia – but even Wikipedia only accounts for ~2% of Google click throughs).  On the flip side, the NYTimes would see a massive decrease in traffic and hence ad revenues.  Google has so much power they can split 0% of the revenue for organic traffic (and of course charge for paid links).

Now imagine a world where search engines are truly competitive.  I know it’s hard – but imagine there are say 20 search engines, each with 5% market share.  And suppose they differ primarily according to which content sites they index.  (I am not saying I’d prefer this world – I’d actually hate it – but please bear with me for the sake of argument).   On the content side, suppose there are only a couple of newspapers left – maybe the NYTimes, WSJ, USA Today, and the Financial Times (which, btw, will probably be the case in a few years).  In this situation the newspapers would have enough leverage to get the search engines to pay them for inclusion in their organic listings.  I know that in my own case if two search engines were nearly identical except one included my favorite newspaper and the other didn’t, I’d use the one that did.  I suspect a lot of other people would make the same decision.

There is nothing inherently un-monetizable about newspaper content.  Like all goods and services, if newspaper content has value to people and is scarce (it’s not scarce today but as more newspapers go out of business will become increasingly so), they can eventually generate sustainable revenue (albeit probably operating at a much smaller scale).  The revenue can come either through consumers paying directly or buyers like Google sharing revenues, or some combination thereof.

For the moment, and for the foreseeable future, newspapers (and all content sites) just happen to be in a dreadful bargaining position with respect to Google.

When I was in business school I remember a class where a partner from a big consulting firm was talking about how they had done extensive research and concluded that broadband would never gain significant traction in the US without government subsidies.  His primary evidence was a survey of consumers they had done asking them if they were willing to pay for broadband access at various price points.

Of course the flaw in this reasoning is that, at the time, there weren’t many websites or apps that made good use of broadband.   This was 2002 – before YouTube, Skype, Ajax-enabled web apps and so on.  In the language of economics, broadband and broadband apps are complementary goods – the existence of one makes the other more valuable.  Broadband didn’t have complements yet so it wasn’t that valuable.

Complement effects are one of the main reasons that technology adoption is non-linear. There are other reasons, including network effects, viral product features, and plain old faddishness.

Twitter has network effects – it is more valuable to me when more people use it.  By opening up the API they also gained complement effects – there are tons of interesting Twitter-related products that make it more useful.  Facebook also has network effects and with its app program and Facebook Connect gets complement effects.

You can understand a large portion of technology business strategy by understanding strategies around complements.  One major point:  companies generally try to reduce the price of their products complements (Joel Spolsky has an excellent discussion of the topic here).   If you think of the consumer as having a willingness to pay a fixed N for product A plus complementary product B, then each side is fighting for a bigger piece of the pie. This is why, for example, cable companies and content companies are constantly battling.  It is also why Google wants open source operating systems to win, and for broadband to be cheap and ubiquitous.

Clay Christensen has a really interesting theory about how technology “value chains” evolve over time.  Basically they typically start out with a single company creating the whole thing, or most of it.  (Think of mobile phones or the PC).  This is because early products require tight integration to squeeze out maximum performance and usability.  Over time, standard “APIs” start to develop between layers, and the whole product gains performance/usability to spare.   Thus the chain begins to stratify and adjacent sections start fighting to commoditize one another.   In the early days it’s not at all obvious which segments of the chain will win.  That is why, for example, IBM let Microsoft own DOS.  They bet on the hardware.   One of Christensen’s interesting observations is, in the steady state, you usually end up with alternating commoditized and non-commoditized segments of the chain.

Microsoft Windows & Office was the big non-commoditized winner of the PC. Dell did very well precisely because they saw early on that hardware was becoming commodotized.  In a commoditized market you can still make money but your strategy should be based on lowering costs.

Be wary of analysts and consultants who draw lines to extrapolate technology trends.  You are much better off thinking about complements, network effects, and studying how technology markets have evolved in the past.

Getting a job in venture capital is extremely hard.  There are a lot of really smart, well qualified, eager people who want to work in VC, and very few jobs.  And it’s likely to only get harder as the industry contracts.

If you look at the backgrounds of partners in VC firms, they generally either came in as a partner after being a successful entrepreneur or worked their way up in VC.  There are books written on how to become a successful entrepreneur, so here I’ll just focus on the other common path – career VCs.

First, you should understand how VC firms are structured.  Every firm is different, some have no junior people, some have just a few, and some have a lot.

The key distinction between junior and senior people is whether they can write checks – meaning they can independently lead a deal.  If you can’t write checks, you have to get a check writer to sponsor an investment you like.  Check writers get almost all the credit and blame for an investment.

The hierarchy within VC firms is basically as follows:  (There has been a wave of title inflation in VC lately, so I’ll put the inflated titles in parentheses).

Partners – Owners of the firm.  Get the most of the management and carry fees.  Can write checks.

Principals – Usually get small piece of carry.  Can write checks.  (Inflated title:  Partner;  in which case it’s hard to tell the “real” partners from the principals).

Associates – Usually post-MBA or 4-6 years work experience.   Usually get little to no carry and can’t write checks.  (Inflated title:  Sr. Associates or Vice President).

Analyst – Usually right out of college.   They do research or cold call companies.   No carry and obviously can’t write checks.   (Inflated title:  they just don’t list a title or say something vague like “investment professional”).

As you can see with the title inflation this is all pretty confusing.  It’s meant to be.  VCs want entrepreneurs to take their junior people seriously.  (Which, by the way, entrepreneurs always should:  even though they can’t directly write checks, they can be extremely influential)

You can break down working your way up in VC into 3 challenges:

1) Getting a job in the first place.  The two most common places to break into VC as a junior person are after undergrad or business school.  VCs are heavily biased toward certain top schools.  On the MBA side, the industry is dominated by Harvard and Stanford.  Undergrad, the VCs I know only recruit from Wharton, Harvard, Stanford and maybe a few other elite schools.  (Please don’t accuse me of elitism-I’m just reporting on elitism, not promoting it). Even if you go to one of these fancy schools it’s still not easy to get a job.  You need to network like crazy.  I did a whole bunch of volunteer research projects for VCs when I was in business school.  I came up with lists of investment ideas so when I got a few minutes with a VC, I could show them I was obsessed with this stuff.  Other things that help you:  computer science or other relevant technology background.  Single best thing is to have started a company (even if it didn’t succeed).

2) Going from non-check writer to check writer.  This might even be harder than breaking into VC.   There is kind of a Catch-22 here:  you can only gain credibility by having led deals, yet you can’t lead deals until you’ve gotten credibility.  Some partners are nice and let high level junior people “virtually” lead deals, join boards etc so they can get credit.  My advice here is to try to get your hands on a checkbook, even if it means leaving a top tier VC and going to a second tier one. Too many junior people hang around top tier firms waiting to get promoted.

3) Once you get your hands on a checkbook, then you just need to find the next Google/Facebook and invest before anyone else figures it out.

If you really want to break into VC and aren’t just now graduating from a top school, my top suggestion would be to go start a company.  If you don’t have the stomach for that, the next best thing is to work in a VC-backed portfolio company, hopefully in a role where you get some VC exposure.

And, finally, if you just want to work in finance, try to get a job at a hedge fund or a big bank.   Breaking into VC so hard that it’s only worth it if you really love startups.

Back in 2006, my co-founder at Hunch, Caterina Fake, wrote a blog post called “It’s a bad time to start a company.”  There were no doubt some great consumer internet companies started then (note she was only talking about consumer internet – which is what I’m also talking about), but on average I’m guessing she was probably right.

Now I’m sure Caterina would agree with me that if you want to start a company, you should just go do it immediately, as she herself has done repeatedly, so no one is trying to discourage entrepreneurs.   But the reality is the fate of your company is partially dependent on things you can’t control, including what is happening in the tech market as a whole, which tends to be extremely cyclical.

One way to look at this is from the venture capital side.  VC returns are extremely cyclical.  For example, 1996 funds (or “vintages” as VCs say) returned an average of 95% while 1999 funds returned an average of -3%.  I don’t think this decade had such extreme swings but most people agree 2002-2005 were great times to invest in consumer internet and afterwards probably not as great.

Venture returns are a function of two things:  great opportunities and low valuations.  Low valuations are obviously not good for entrepreneurs from a dilution perspective but they do indicate that investors are fearful, which means we are probably at the down part of the business cycle, which has historically been a great time to start a company.

People are fearful now, and people with a shallow understanding of technology are declaring the internet over.  I’ve been saying for years that the best time to start a company and invest in startups will be when people start declaring Google (and online advertising in general) a “mature” business, which seems to be happening now.  It feels a little like 2003 when people mocked “dot coms” as profitless sock puppets.   In retrospect, 2003 was a great time to start a company.

On the other hand, there were massive amounts of money invested in consumer internet startups over the last few years.  You know when hedge funds and mutual funds start investing in early stage startups, as they were in 2007-8, we’ve reached the peak of the cycle.  It takes a long time for that kind of money to work itself out of the system, so at least for another year or two you are still going to see some crazy money being spent on marketing, salaries etc, making it harder for us mortals to compete.

All that said, I wouldn’t try to over think timing.  It’s pretty much impossible to predict what will happen in the near term.  You should instead focus on solving a big problem and let the chips fall where they may.  Be cautious about falling into starting something around the latest fad, e.g. online video, facebook apps, twitter apps.  I love the audaciousness behind this Andy Grove interview:

What really infuriates him is the concept of the “exit strategy.” That’s when leaders of startup companies make plans to sell out to the highest bidder rather than trying to build important companies over a long period. “Intel never had an exit strategy,” he tells me. “These days, people cobble something together. No capital. No technology. They measure eyeballs and sell advertising. Then they get rid of it. You can’t build an empire out of this kind of concoction. You don’t even try.”

What really infuriates him is the concept of the “exit strategy.” That’s when leaders of startup companies make plans to sell out to the highest bidder rather than trying to build important companies over a long period. “Intel never had an exit strategy,” he tells me. “These days, people cobble something together. No capital. No technology. They measure eyeballs and sell advertising. Then they get rid of it. You can’t build an empire out of this kind of concoction. You don’t even try.”

Benjamin Graham famously said that the stock market is a voting machine in the short run and weighing machine in the long run.  The same is true of startups.  Make something weighty – try to build an empire – and you’ll be far less vulnerable to the ups and downs of the market.

If you want to work in venture capital focusing on internet/software companies, or start one of those companies, or work as an employee in any role at one of those companies, there is only one undergraduate major you should consider:  computer science.*

I’m not saying you need a computer science degree, but I am saying it’s incredibly helpful to know computer science.  Lots of great computer scientists are self taught. But almost all of them started coding in their teens.  If you are a coder already and want to spend your college years majoring in something else for the heck of it, great.  I spent my whole childhood coding, and worked during college as a programmer, so decided to major in Philosophy because I thought it was interesting.

Why is it so much better to learn computer science in college (or before)?  Because after college it’s very hard to find the time and discipline to teach yourself coding.  On the other hand, it’s pretty easy to pick up business skills, economics and all sorts of other skills on the job or in grad school.

Why is a computer science degree so important to VC and startups?  I would estimate in about half the conversations I have at my own startup, with tech founders, and with venture capitalists, there is a moment in the conversation when we start getting technical.  Sometimes someone will even ask “Are you technical?” before starting down a topic.  The non-technical people in the room just sit there like we are speaking Greek.

It’s a shame that student enrollment in computer science is in decline.  The thinking apparently is that computer programming is increasingly moving overseas.  What these students fail to realize is you don’t need to be a professional coder all your life to find computer science an incredibly valuable major.

* There is a whole separate world of VC and startups in energy and healthcare.  In those areas I’d recommend analogous technical undergraduate majors.

A friend asked me the other day “Which VC firms should I pitch?” and I started to respond to him, but then realized that most of my knowledge of VC firms is already available online in the Which VC firm should I pitch? Hunch decision topic. That is the idea behind Hunch: to crowdsource the creation of decision trees, so that a group of knowledgeable people can get together and create a “virtual expert” that can be accessed by anyone.

Here is the VC chooser topic in embedded widget form (anything you create on Hunch can be embedded anywhere):

Which VC firm should I pitch? – make thousands more decisions on Hunch.com

Like everything on Hunch, this topic is completely user generated (“topic” is our word for what some people would call a “decision tree”). Users have full control over the questions it asks, the results (in this case VC firms), the descriptions, and a lot of more advanced functionality for “sculpting” the decision tree. If you go to the VC topic’s About page you can see that so far 7 people have contributed 86 firms and 5 questions to this topic (other topics have a much wider range of contributers, this one for example). The VC topic has been played (used by non contributors) 506 times, many of those users coming in via Google organic results for phrases related to pitching VC firms.

In addition, the results are all “trained” to be associated with responses to questions – meaning users have taught Hunch what to “believe” about each of the firms. For example, in red is what Hunch believes about Union Square Ventures:


Users who find mistakes can just click and fix them, similar to how you fix things on Wikipedia.

So if you see anything missing or that you’d like to change, feel free to do so. I was one main people who worked on this particular topic so it is biased toward my tastes (e.g. Hunch’s own VCs – Bessemer and General Catalyst – rank extremely high).

If you don’t like Hunch’s Q&A process you can jump directly to the See All page, and then using the filters on the left to drill down.

If you are not logged into Hunch, the VC firms you see will be ranked by their popularity amongst all Hunch users. Hunch personalizes the rankings specifically for you if you create an account and answer what we call “Teach Hunch About You” questions. For example, when I am logged in and go to the Hunch page for Bessemer I see this on the right sidebar:

Meaning that Hunch has learned to statistically correlate the questions I’ve answered about myself with liking Bessemer. At this point Hunch has statistically significant data (over 40M user feedbacks total) in most of our ~5000 topics so it usually works really well.

One of the most difficult decisions to make when developing a “freemium” product is how to divide the product between free and paid features.

Assume you’ve come up with the “ultimate” product – the complete set of product features including both free and paid versions. Given this, many people think they need to make the following trade off:

1) more features in free version –> more users
2) fewer features in free version –> higher conversion rate from free to paid

So for example, if your consumer storage software gives away tons of free storage, the assumption is you will get more users but a lower conversion rate, as compared to a competitive product that gives away less free storage.

Actually this not the whole story, because tilting toward #2 – more features in the paid version – opens up new marketing channels that can actually get you more users. If you have a compelling paid product that isn’t undermined by a nearly as compelling free product, you can potentially profitably market through affiliate networks, SEM, display ads, bizdev partnerships and so forth. Lots of websites that reach large user bases are only interested in promoting paid products. For example, from my experience, OEMs (PC makers like Dell & HP) are only interested in offering security software that they can charge for in order to generate additional revenue.

In terms of the user experience, it is often very difficult to draw the line. In the old shareware days, software would nag you with popups or expire after a certain number of days. I don’t like either of these approaches. Nagging is obviously just annoying. And expiration schemes end up tossing out users who are potential future customers. Why not keep them around and preserve future opportunities to offer them something they find useful enough to buy?

The ideal division allows the free product to be an independently useful, non-annoying, non-expiring standalone product, while still leaving room for the paid version to offer sufficient additional value that some acceptable percentage of your users will upgrade.

Some products are fortunate enough to have a natural division point. For example, in security software, “remedial” products like anti-virus and anti-spyware often give away a free scan, and charge for clean up if your PC is infected.  What’s nice about this division is that the free product has non-annoying, genuine standalone value, and if you actually do have an infection the upgrade is extremely compelling. (The bad news is that this division encouraged companies to hype the risks of innocuous things like browser cookies).

Preventive security products are trickier to divide than remedial security products. Preventive security products include firewalls like ZoneAlarm and my prior startup, SiteAdvisor (and now SiteAdvisor competitors like Norton’s SafeWeb and Trend Micro’s TrendProtect). The problem with preventative security products is that the only features you can remove end up opening up a vulnerability, which just feels like a huge disservice to the user.

Skype figured out a nice division point: free for Skype-to-Skype calls, pay for calls to regular phones. It’s not clear how sustainable this is as the cost of long distance drops to zero and the distinction between software phones and “regular” phones goes away.

Online storage products usually divide things by the amount of storage. The nice thing about this is 1) you can test a bunch of different prices/storage levels, 2) you get to have a free version plus multiple tiers of paid, which means your pricing can more granularly track customers’ willingness-to-pay. The goal of all revenue maximizing pricing structures is to minimize what economists call “consumer surplus.” Since you can’t gaze into the mind of the user to see what she is willing to pay, and attempts at explicit price discrimination are usually met with outrage, you have to look for proxies for willingness-to-pay. With stock quotes, professionals can’t wait 15 minutes. With books, avid readers don’t want to wait for the paperback version. With databases, wealthier companies have more servers. And with online storage, professionals and hardcore consumers are generally more likely to need more storage space.

The New York Times’ TimesSelect was one of the more interesting attempts at the freemium model. It was free to read the regular news but you had to pay for the op-eds. Personally I usually read one or two of their op-eds every day, but part of the attraction is that I know my friends do and someone will say “Did you read the Krugman piece today?” and then we might chat about it. So in a way op-ed’s have network effects. Putting them behind a paywall doesn’t just reduce their readership, it reduces their influence – the very influence that compels people to read them in the first place.

A final thought:  when in doubt, err on the side of putting more features on the paid side of the divide.   It’s easy to add features to the free side;  however, removing features from the free side is a recipe for trouble.