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by michael_dorfman 5784 days ago
Conversely, if you have an app that is going to get a really large user base, and I'm talking 'millions', then it probably will work (i.e. google, twitter, facebook, ect.)

Actually, not. None of those are using a "freemium" model; they are all ad-based products. If your business model is dependent upon giving advertisers eyeballs, "free" is a great way to go-- but that has nothing to do with the topic at hand.
1 comments
bmcnamara82 5784 days ago
"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base."

From Fred Wilson's mouth (he coined the term "Freemium")

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revorad 5784 days ago
acquire a lot of customers very efficiently

First of all, people who don't pay are users, not customers. Secondly, how are conversion rates of less than 2% considered efficient?

In the freemium model, even if cost of customer acquisition (COCA) for a free "customer" can be considered to be zero, Life Time Value (LTV) is increasingly negative.

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