Freemium Model
By: A Staff Writer
Updated on: Jul 19, 2024
What: Provides a basic version of your product/service for free, aiming to hook customers and then upsell them on premium features.
Who: Used by tech companies for a long time, popularized by venture capitalist Fred Wilson.
Why: Reduces barriers to trying your product, helping entrepreneurs build a large user base.
When: For digital products with low marginal costs, where upsell potential exists, and where you need rapid user growth.
How:
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- The “free” tier needs to be valuable enough to attract users.
- Design a smooth path to upgrade for those wanting more.