I was recently speaking at a great Healthcare event in Atlanta where one of the questions was how do investors view pilots? There are many parts to this question, but here is some of what we discussed.
It’s all relative
A free pilot is better than no pilot customers. But not as good as paid pilots, which are also not as good as paying customers.
Why free is dangerous
Many organizations ask for free pilots. In most cases I am not a fan. This is often just a way to appease you and dabble in something that is not a high priority in the organization. It doesn’t cost them anything to accept a free pilot. But because there is no skin in the game, it is easy to not fully participate or deprioritize the pilot relative to other company initiatives. For the entrepreneur, you may get excited and devote lots of resources to an unpaid engagement with little chance of conversion. Lastly, when a free pilot customer is asked for feedback they usually say it is great – since they got it for free they feel bad telling you what they really think.
Put some skin in the game
I much prefer charging a trivial amount for the pilot. Something where the decision can’t be about the money, but they have to show there is internal commitment to ultimately move forward. My experience is if they won’t pay a trivial amount for a pilot, they likely would not have ultimately paid for your product anyway, thus saving you time and effort. Furthermore, feedback from paying customers is infinitely more valuable than free customers. A well defined pilot can set you up for success.