The Diary of Workosaur's Founder & CEO

Freemium Models

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The 4 best Freemium Models as detailed on this post by Chris Anderson on The Long Tail Blog. He has detailed these with Pros and Cons.

  1. Time limited (30 days free, then pay. e.g. Salesforce)
  2. Feature limited (basic version free, more sophisticated version paid. e.g. WordPress)
  3. Seat limited (can be used by up to some number of people for free, but more than that is paid. e.g. QuickBooks)
  4. Customer type limited (small and young companies get it free, bigger and older companies pay. e.g. Microsoft’s BizSpark)

Written by Nimish Adani

November 13th, 2008 at 9:59 pm

Posted in Business Models

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  • Joe
    Nimish,

    Since you and me have managed businesses on the web its very simple to figure out the following based on what we faced in the market.
    1.Time Limited ( Trial ) - Suitable for B2B sales
    2. Feature Limited ( Matri/linkedin) - C2C sites. B2C sales, low cost of acquisition, free sales prospect pipeline :D, Traffic driver etc...
    3. Seat Limited - SME focus B2B Sales - Ideal for SME focus.
    4.Customer type - Cash rich companies like Microsoft can do this kinda timepass experiements.Its so damn difficult to police and collect. So dear VC funded internet companies..pls stay away from this option
  • Your second point holds true only in case of of 2).

    And it's not as though freemium is a tough game to master. Monetization altogether is a tough game to master when it comes to the online space.
  • Rohan
    Freemium sounds easy but is a tough game to master.

    Threre has to be enough value in the free product to drive adoption and usage. At the same time, there has to be enough incentive for people to pay for premium features or services

    The most challenging part is to convert some of the free users to paid and make them pay enough to take care of free riders and profit margins... 99.9% of the users would be happy with whatever they got for free...
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