The Freemium Model

We don't normally like complete copy and paste posts, but I can see you have copied from your own blog, and you're not pitching, plus it's interesting

I first came across the term freemium business model a few years ago after attending a business seminar by Doug Richards (was an original member of the UK Dragons Den).

It was interesting because the way he explained it, was exactly what we were doing, but we just didn't have a label.

His version was the freemium model is used as a hook to draw in interest and potential customers, by giving away a usable cutdown/reduced feature version of your product, and with the opportunity to upsell to the full version if a customer saw the benefits.

We apply this model on our business directories, offering a free listing, but with a chance to upgrade. I think it is pretty much the standard model these days at least in the directory world, but it seems the definition is slightly different in the UK to maybe the States? Or I wonder if the freemium model can be broken down into sub models? Curious, because Doug himself is American, although I think probably Anglicised by now!

But agree totally that you would be cautious being offered a free product from a startup if it became a tool, product or service you came to rely on, if you didn't have the confidence the company had the backing to survive.