In putting together a 2013 budget for The Nittany Valley Society, I was asked to weigh in on whether our nonprofit board should renew its GoToMeeting subscription. We’ve used it over the past year for collaborative work and it’s been pretty useful. Even better, we obtained a discounted nonprofit license and paid just $50 for 12 months of service, rather than the typical rate of $50/month.

But we’re canceling our GoToMeeting subscription and replacing it with Google+ Hangouts. I know I’m somewhat late to Google+ Hangouts in this regard, but in looking at its feature set (painless invitations, screensharing, mobile apps, and essentially unlimited participants) it blew GoToMeeting out of the water for what we’ve been using it for.

If there’s any take-away here beyond our specific use-case, I think its that a free service replaces a merely cheap service. The cheaper a service gets, the more it will end up competing with free rather than premium alternatives.

Learn to charge more for premium service, and charge less if you want to reach scale with basic but more easily replicable services. It’s not simply a matter of better margins but better long term health that should compel a person or company to create the premium service.

And at least for us, GoToMeeting is not that.