Whether it's discussing the rapid growth of companies like Dropbox, Evernote, and Spotify or the reason for the demise of too many smaller startups, Freemium has always been a topic of interest for developers and CEOs looking to get as many people hooked on their product as possible.
Consider The Freemium Manifesto the final word on how to make freemium work in SaaS from the people that have seen inside more SaaS companies than anyone else. Freemium does have its pitfalls, but done right it can work beautifully to get users into your ecosystem and on the path to upsell.
You can get the full book here, but the following is an overview of what you'll be getting.
Here's what we want you to learn to help you understand Freemium:
Chapter 1: The Birth of Freemium. To get started we take a look at why companies started offering products and services for free. The freemium model as we know it now can be traced back to the early eighties, gaming culture, and a few press-savvy developers. We also look at Freemium's evolution over the last 10+ years with Flickr, Evernote, and current examples including MailChimp and our own version of it with ProfitWell.
Chapter 2: Freemium is for Acquisition Not Revenue. In this chapter we deep-dive into this exact problem — freemium isn't a revenue model - and why you need to build freemium from a marketing perspective, what goes right when you do, and what goes wrong when you don’t.
Chapter 3: Freemium Economics. The most important consideration of your transition to freemium: the economics of the decision. If you can’t make the unit economics work, you can’t make freemium work. This is where most people trip up. They don’t understand how to use freemium to acquire valuable customers economically.
Chapter 4: Companies That Took Time to Make Freemium Work. Taking the lessons we laid out in Chapter 2 on how to approach Freemium the right way, we now look at them in practice. Companies like MailChimp, Wistia, and Grammarly all waited over five years before offering free versions of their product. They spent that time learning from the people who already valued them—their paying customers. Then, once they knew precisely what the market was willing to pay for, they could confidently offer a free product.
Chapter 5: Tactical Guide to Making Freemium Work. After working with thousands of SaaS companies, we put together a tactical guide to freemium to help you quickly show value, align your customers’ needs with the right value proposition and present them with a clear path to upgrade.
There's a reason we use a freemium model at ProfitWell. When used correctly, freemium can take your business to the next level with a flood of new users, as long as you have a process in place that leads them down the path of an upgrade.