Known for facilitating corporations, including a Big 5 Tech company, in implementing real-time interactive digital avatars with humanised responses, artificial intelligence company UNITH (ASX: UNT) has big plans to introduce its Digital Human platform to a wider market under a freemium model. It follows the footsteps of companies like Grammarly, Spotify, Canva, and many more that have built up a huge user base before launching their premium products. 

Currently focusing on its enterprise package, the Company offers reliability of its digital humans as the biggest value proposition. The digital humans are programmed to boost productivity and minimise human error in business operations and client-facing roles, as well as provide a solution for global labour shortages.

UNITH’s Digital Human development plans began in Q3 FY23 when it performed a server upgrade that made the Digital Human platform’s bandwidth usage 15 times more efficient. The upgrade also facilitates a new backend user dashboard that provides a simple client onboarding experience. Clients will be able to upload documentation to the Digital Human platform that will drive their digital humans as well as provide analytics of their performance.

Furthermore, UNITH had shown promising Phase 1 progress of the Digital Human platform development by successfully integrating the digital humans with GPT in late Q3 FY23, and will continue working on optimising the integration for the rest of Q4 FY23. 

Around the same time in March, UNITH also completed a $4.77 million capital raise from enthusiastic investors which opened up opportunities to further accelerate platform development. The capital raise will allow more upgrades, renewals and enhancements to be implemented, such as supporting their Phase 2 development plan of adding Guided Conversation features into the platform in Q1 FY24. 

Well-funded to continue progressing development and commercialisation activities, UNITH also revealed the possibilities of scaling up and extending the Digital Human service offering to individual users and small-medium businesses via a self-service platform. A part of Phase 3 development, the self-service platform is targeted for a soft launch in Q2 FY24. 

The self-service platform will be distributed using a freemium revenue model, in which users will be able to create a digital human for free with limited functionalities such as answering questions based on documents they upload such as sales catalogs, website information, employee handbooks or frequently asked questions. They could then upgrade those functionalities for extra features such as (and not limited to) larger documents, more language options, multiple conversations at once, customisable appearances for their digital human, and many more.

The planned freemium revenue model is both a growth and consumer acquisition strategy. When offering a free version, businesses can attract a large user base by introducing or giving a glimpse of its product or service offering. Then, they can convert some of those users to paying customers by offering premium versions which offer more advanced or additional features for a fee. This model is widely popular in the tech industry for software applications, online services, and mobile apps.

Several benefits of a freemium strategy include easy customer upselling – as they already know what they are getting and are more likely to see the additional features as worth paying for, while simultaneously testing how the market responds to the platform. A free version also provides UNITH with brand recognition to help establish the Company as an industry leader. 

Commenting on the proposed self-service model, UNITH CEO Idan Schmorak said, “Our intention is to make this as operationally profitable as we can, but still to attract a lot of new paying customers.”  

“We just need to sharpen the value proposition and to show what exactly that we’re giving them. And this is something we’re working on these days for the self-service platform.”

The self-service platform will open up massive opportunities for UNITH to push their value proposition to a different usage setting, and also maximise the tech accessibility and availability for potential clients outside of the bigger corporate scope. From the marketing and branding perspective, the platform will gain more word-of-mouth referrals and increased visibility when people are happy with the free version. Once users see the value proposition, they would be more willing to upgrade to the paid version on a subscription basis, therefore creating an ongoing revenue cycle.

Similar models have been observed to work successfully in many other Software-as-a-Service (SaaS) and tech companies, even OpenAI – the creators of ChatGPT.