Over the last 18 months I have viewed, reviewed and even worked with several executive teams who have plans to launch or have launched a business based on the Freemium business model. Very quickly some have realized the challenges of this type of business model and have survived while others never got off the ground. Based on this experience I decided to write this small piece.
Freemium: The combination of free and premium levels of services.
I would say that over the last ten to fifteen years, and especially in the last five we have seen cloud based, SaaS, PaaS and mobile app development companies dominantly use the freemium business model to launch their platforms.
In most cases there is a small set of free services for basic users, while premium users get additional upgraded services. In several cases, the free users are inundated with ads, while the premium subscribers can opt-out of the ads.