I'm inclined to disagree with the author's thesis. I agree that talking to users is essential, but I think his heurstic is arbitrary: "You’re doing it right if you can get a third of potential users to pay you money within a month of initial contact."
The real number you should be targeting is the number of users you need to pay in order to build a sustainable business, that could be above 80%, it could be below 5%, it could be 0 . . .
This is something that varies widely by business and I don't think it's good advice for a company that falls outside the scope I imagine the author is thinking of.
The premise is that you should aim for a higher conversion number because it forces you to focus on a more narrow audience segment. I think that's really sound advice, and might go as far as to say that's the key to building any business. Typically any business can find 1 person who loves their product, but then extrapolate incorrectly or slice the wrong segment to focus on. Higher conversion number means you've started to focus on the right segment.
I was wondering something along these lines. In a freemium model, you don't want to only be talking to paying customers, so you have to segment into two tiers, and this metric doesn't work. However, it isn't a bad starting point when you're targeting paying customers.
The real number you should be targeting is the number of users you need to pay in order to build a sustainable business, that could be above 80%, it could be below 5%, it could be 0 . . .
This is something that varies widely by business and I don't think it's good advice for a company that falls outside the scope I imagine the author is thinking of.