Freemium model is not easy to achieve success

freemium model is not easy to succeed

Beijing on August 23rd news, according to foreign media reports, more and more entrepreneurial learning in the company to the file sharing service Dropbox, occupation social network LinkedIn and network telephone service companies such as Skype, allow users free access to products and services, to build a large user group. However, this free value-added (freemium) model takes a long time to work, it is difficult to succeed.

for startups, freemium is a costly trap, bring higher operating costs and a lot of people eat idly without work "(freeloader).

Chargify to small businesses to provide financial management software on the face of this problem. Chargify was founded in 2009, using the freemium model.

Chargify to the number of customers per month less than 50 businesses free of charge to provide their software. If the number of business customers more than 50, you need to pay at least $49 per month. Most Chargify users are not paid users. Within 1 years, Chargify is on the verge of bankruptcy.

Chargify finally decided to charge all users. Last month, Chargify paid more than 900 users, and to achieve profitability. Users need to pay at least $65. Chargify co-founder and CEO Lance · (Lance Walley); Wally said, "give up the freemium model is that we make business decisions ever since best."

a few years ago, sales advertising is the most common way to generate income for digital startups, because they think users will not pay to buy software. At present, the freemium model is becoming more and more popular, partly due to the great success of Dropbox, LinkedIn and Skype.

Wen professor

of Harvard Business School, · (Vineet Kumar); Kumar said, freemium is attractive to companies, the reason is that it seems to be very simple "– use free services to attract users, users" addicted "by providing more value-added services revenue," the question is, what function should be is free of charge, which should be paid, these are not obviously ". He pointed out that in the free version provides too many features will face the risk of eating a premium user, the function is too small to attract enough users.

if you can not attract millions of users, freemium model has no meaning for any business. TechStars, founder and chief executive officer of ·, a start-up company, said Cohen (David Cohen), usually, only 1>


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