Freemium Beats Going Pro

Last week, Fred Wilson called for a name for the now-common business model of web start-ups:

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.

I offered this post and the term Turning Pro. But Fred has gone with the very good alternative, Fremium:

[from A VC: The Freemium Business Model]

And at the risk of calling the game before it's over, I have to go with Freemium. I love the name, suggested by Jarid Lukin of the Flatiron portfolio company Alacra.

I am going to join in and use this term, too.

tags: freemium, fred+wilson, turning+pro, jarid+lukin

Comments

[Markus]

Giving away stuff for free works great for me in the dating industry. Its more profitable then going paid.

The end result is that in industries where you can afford to go free, paid services will no longer be feasible. If you try and go paid a bunch of the free competitors will try and take you out.