Freemium Model

Definition

A business model where you offer a free version to get people hooked, then charge them for features they suddenly realize they need.

Example Usage

Our freemium SaaS converted 15% of free users to paying customers, which means 85% of our users are enjoying it at our expense.

Origin

Coined by Jarid Lukin in 2006, popularized by Spotify, Dropbox, and others

Fun Fact

Freemium models work best when the free version is genuinely useful but limited enough to create FOMO, a delicate psychological balance.

Source: Business Model Innovation standards

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