I often hear of entrepreneurs who are running pilots. Many are free and some are paid. But which is the better route as there are tradeoffs with each approach?

Free pilot

The advantage of a free pilot is little risk to the customer - they can never use the product or even walk away with no strings attached. Most entrepreneurs are sensitive to asking for money for a product that is “not ready,” so free puts them more at ease. You can also “sign-up” more customers faster if free.

The downside of free is that it doesn't prove any willingness-to-pay for the product and can have low conversion to paid. My experience has been that many free pilot customers don’t fully engage so the learnings are significantly less. Lastly, I have found that customers rarely give honest feedback on a free pilot … they feel bad telling you they don't like something you gave them for free so they sugarcoat or don’t share the real feedback.

Paid pilot

The advantage of a paid pilot is the customer now has some skin in the game. I find when paid, they tend to engage more and provide much better feedback. They have to overcome some internal company processes to pay something greater than zero. Thus, getting through that for a pilot gives you more confidence that customers would ultimately buy the product if the pilot is successful.

The downside of a paid pilot is that you probably can “sign-up” less customers. You will also likely need to enhance the basic product with services/consulting to help the customer see the ROI/value as the first version of the product is never perfect.

My views

Some industries may have precedents set about being used to only free pilots. But I strongly prefer paid pilots. You prove with more confidence they would ultimately pay for something. You get better engagement/feedback and a chance to work closely with the customers for the key learnings. Early on, you don’t have the bandwidth for many customers, so focusing on a few that will pay to build the first version with you is a better use of your time. It automatically self selects customers who are likely a better ICP and more serious about solving the problem.

Whatever type of pilots you choose, make sure you set the pilots up for success so you can get the key learnings and transition the pilot to a loyal customer.