🎬 Watch the video above for the full teardown—only takes 5.5 minutes at 2x speed. ⏩
Google just made a huge move: its AI suite, Gemini, is now free for paid Workplace accounts. If you already pay $14 per user per month, you’re getting AI for “free.” This is big. And it raises a question we’re diving into today: is bundling always the best strategy?
To answer this, I did a deep dive on the history of bundling and pricing for a different industry: video conferences. This teardown looks at the history of MSFT Teams, Google Meet, and Zoom. Looking at this history drove me to have a lightbulb moment on how a small team could beat a really large player.
How did Zoom win against Microsoft and Google?
Zoom’s success seems like a fluke. The video conferencing space was dominated by Microsoft and Google, both of which bundled their video software (Teams, Meet) into larger productivity suites. These companies had built-in distribution. They had billions in cash. They had everything in their favor.
And yet, Zoom—a small startup—took 50% of the market. Even if that number is exaggerated, grabbing 25% is still wild.
How did they pull it off? It all comes down to two key behavioral science forces:
1️⃣ The power of free
2️⃣ The power of “less is more”
Large companies fear cannibalization
Around 2017, both tech giants shifted from offering free business communication tools to bundling them exclusively with paid enterprise suites.
Microsoft acquired Skype and strategically integrated Skype for Business features into Office, making enterprise video conferencing capabilities accessible only through full Office suite subscriptions.
Google adopted a comparable approach by introducing Google Meet as part of G Suite (later Workspace) in 2017, requiring businesses to purchase their complete productivity suite to access professional video conferencing.
Remember Webex? Same thing. Cisco positioned Webex similarly in the enterprise market, bundling their video conferencing solution with the broader Cisco product ecosystem.
Zoom had been operating since 2011. It had traction, but the market was crowded. Now, with Microsoft and Google focused on selling comprehensive business suites, there was a crucial gap for an easy-to-use free tool that served individuals and small-to-medium businesses.
The power of free
Free is more than a pricing strategy—it’s a psychological weapon.
People dramatically overvalue free items compared to cheap alternatives. This has been the foundation for many tech giants' success. Spotify, LinkedIn, and Slack all built their empires on robust free tiers.
To understand why, consider what happened when Amazon introduced free shipping in Europe. In most countries, orders skyrocketed. But in one place, sales stayed flat. What happened there—and what does it tell us about Zoom’s growth?
Watch the video to find out.
The power of “less is more”
Bundling makes sense on paper—more features should mean more value. But sometimes, simplicity wins.
Think about two competing voice assistants. Siri tried to do everything. Alexa focused on just a few things. Which one do you think won?
Zoom followed the same playbook. While Microsoft Teams and Google Meet were buried inside broader suites, Zoom was just Zoom. This clarity likely mattered to not only the development (easier to drive quality when less tradeoffs) but the marketing was much cleaner.
I break down mental models in the video.
What this means for Google Gemini
Now, back to Google’s move: making Gemini free for Workplace users.
On one hand, this is a smart way to boost adoption. But there’s also a risk—a risk that Zoom already proved is real.
We’ve seen this story play out before. A dominant company bundles a product into their enterprise suite, assuming they’ve locked up the market. But then a smaller, more focused competitor sneaks in and takes a surprising share by going after business users with a standalone free or cheap offering.
Could that happen again with AI?
3 key takeaways from this teardown
💡 Why big companies hesitate to offer free products
💡 When fewer features can beat a bundled powerhouse
💡 The flaw in Google’s AI strategy (and the opening it creates for new competitors)
What do you think? Are we about to see a new Zoom-like player emerge in AI? Drop your thoughts below! 👇
🎬 This was just a sneak peek! Watch the full video below for all the insights—only takes 5.5 minutes at 2x speed. ⏩
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📧 Questions about product adoption? Shoot me an email: kristen@irrationallabs.com.
Want to increase conversion, retention, engagement? Reach out to Irrational Labs.
We design products that change behavior, using behavioral science. Check out our case studies to see it in action.
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