Freemium Business Model

The freemium model has been used a great deal over the last few years by online companies offering tools and services. The principle lies in using basic features for free. 

Well-known examples are:

  • Evernote
  • ToDoList
  • LinkedIn

The freemium model offers you possible significant growth but financial planning is very important, as revenue will only be received once the first free users convert to paying users.


Before you start

  • Check the fit between the value proposition and the customers/client’s needs.

How to start?

  • Build an MVP in order to check if real value is created for the customers.
  • Keep the free version as long as possible to facilitate the distribution of the product

What are the key success factors?

  • Addiction to the product
  • Becoming a must-have and/or a reference for every professional

How to cope with threats?

  • Competitors who offer a similar product that is completely free from the start
    • Buy competitors
    • Develop additional complementary services

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