How Startups Benefit From Fremium Business Models

How Startups Benefit From Fremium Business Models



Freemium is a business model that works by offering a product or service free of charge (such as software, web services or other) while charging a premium for advanced features, functionality, or related products and services.The word “freemium” is a portmanteau combining the two aspects of the business model: “free” and “premium”

  1. Read Chris Anderson’s FREE: The Future of a Radical Price Chris .will teach you how to integrate the Freemium model into your business and make your clients offers they just cant refuse.
  2. Google lets you search online for free, because advertisers are paying for AdWords.
  3. DropBox gives most of their users free online storage, because enough of their users are happy to upgrade and pay for more storage space.
  4. LinkedIn lets you create and manage your online profile for free, because some people are willing to pay for InMail,others are willing to pay for job postings, and still others are willing to pay for access to the resumes of potential hires who check out their profile.
  5. Starbucks gives you coupons for free iTunes song downloads each week, because they introduce you to new artists, whose full albums you will hopefully purchase.
  6. Free website, but freemium services (customers pay for support, customization, coaching, or consulting)
  7. Ad revenue (pay per impression and pay per conversion offers, but these are rather difficult to maintain without 50k+ in traffic. Lead generation sites which serve as an intermediary between customers who are searching for services and a range of companies in a space might be the most successful in this space)
  8. Free website or service, but e-commerce back end (sometimes this takes the form of social e-commerce or a knowledge product)
  9. Free website, but paid mobile application (you can also reverse that model)
  10. You can also use drop-box-style dual-sided incentives (“refer a friend and we’ll up their ‘per file limit’ by 50mb/file, and yours, too up to a max of 4 friends!”)
  11. Analytics/statistics platforms are provided to web publishers for “free” and general business intelligence data is collected and sold to 3rd parties at a premium.
  12. Foursquare or check-in based businesses is seen as a “free” offer system for consumers that will eventually be paid for by the businesses that promote on the platform

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