Freemium Model Debate

It seems the goal is for 'Premium users' to subsidise the costs of 'free users' many popular companies do this including; Github, npm, gmail etc.Hopefully they've calculated the growth cost of their premium tiers and how much they can give away for free...Otherwise, it's great for side projects!!

Well, without their free tier they probably wouldn't be as big as they are today. It's the same model as freemium apps: get big, then start charging.

Freemium, the small % of paid subscribers subsidizes the free users enough.

I thought freemium _was_ charging for increased value.

the author correctly intuits that a bunch of free users that may spread the word are worth more than N*0.95$ so the outrage on display here is not only unnecessary but counterproductive too

There are three reasons. You mentioned two of them - word of mouth, and potential conversion to paying in the future. But there's another one too, and that's just the total size of your userbase. Either for bragging rights (we're bigger than competitor X) or for future sale value (the more users you have, the more money you will likely make from a sale/acquisition of your service, even if a lot of them aren't paying for your service) - both are good reasons to offer a free, dumbed down version o

Ostensibly, the company is receiving some sort of value from the free plan users. Increase of adoption rates and "buzz" come to mind.

You're still paying for the service. Basically this is talking about making free services non-free to support the creation and growth of the service.

The free plan probably brought 90% of their customers, watch them bring it back after few months

Gotta make up for all those freemium users. Maybe it wasn't so "free" after all...