Freemium 101

Fantastic overview of offering a freemium revenue model. Bottom line: it only works for businesses that can confidently achieve massive scale on their “free” service.

TechCrunch

Editor’s note:Jules Maltz is a general partner at IVP and focuses on later-stage venture investments in rapidly-growing Internet and software companies. Follow him on Twitter. Daniel Barney is a senior associate at IVP and focuses on later-stage venture investments in digital media and information technology. Follow him on Twitter.

Over the last several months, there has been an intense debate about the viability of freemium business models. For some, freemium is a costly trap, a business model that sacrifices revenues and forces a startup to support freeloaders who will never become paying customers. For others, freemium is the future of business, the logical conclusion of a world in which the cost of bandwidth, storage, and information processing approaches zero. Both sides agree that the model is extremely powerful. As Rob Walling of HitTail notes in a recent Wall Street Journal article, freemium is like a Samurai sword: “unless you’re a master at…

View original post 2,621 more words

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s