vs. HipChat
Slack
Viral team adoption, with a better free tier
- What it did
- Free tier gated on message history, not users, so whole teams adopted free (2013-14)
- HipChat
- Free capped at five users until May 2014, when Slack launched
Strategy Map›Layer 5 · Go-to-Market Strategy›Monetization Strategy/Where the free line sits+ from outside the named canon
Freemium Model
What is a Freemium Model?
A permanently free offer lets everyone a team, project or network needs take part, and payment attaches to a value metric (history, editing, capacity, advanced capability) rather than to the number of participants or to viewing.
How Freemium Model works
When everyone a team needs can take part free, use spreads through the team and the fence (history, editing, capacity) turns that use into payment without asking anyone to pay to join.
How companies won with Freemium Model
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. InVision
Figma
Viral adoption, with free collaborators
- What it did
- Pay for editors, everyone else free (2017); sales followed advocates into existing clusters (2018)
- InVision
- Charged $8 a month per commenter (2018)
vs. New Relic
Datadog
Land and expand on per-host pricing
- What it did
- $15 per host, no per-user charge, 14-day trial, month to month (2012-14)
- New Relic
- Free Lite tier plus $200 per server tiers (2008)
vs. RethinkDB
MongoDB
Free open source, seeded city by city
- What it did
- AGPL freemium chosen to drive adoption; language meetups and MongoDB conferences city by city
- RethinkDB
- Same free open-source model but no paid product
Also tagged: Adobe · Cloudflare · Confluent · Duolingo · GitLab · HashiCorp · HipChat · HubSpot · Procore Technologies · Spotify · SurveyMonkey · Tableau
The question to ask of a company
Where does the free line sit, who can take part free, and what makes a team start paying?
Who names it
| Author | What they call it / where it appears |
|---|---|
| Chris Anderson + | Freemium |
| OpenView + | Freemium and reverse trials |
| Kevin Kwok + | Free viewers; the product as the distribution |
Note. Near miss: A free plan for up to five users, with every sixth person paying. Does not count: A free trial, a free product paid for only by a third party (Cross-Subsidy), or a free plan capped by the number of users.