As a project manager, I’ve seen the freemium model become increasingly popular in the software development community. The idea is simple: offer a basic version of your product for free, and then charge for premium features or additional functionality. This model has worked well for some companies, but I believe it’s a risky proposition for most startups.
Here are a few reasons why:
It’s difficult to attract enough users to generate a reliable revenue stream. In the crowded app and webapp space, it’s getting harder and harder to stand out from the crowd. Even if you do manage to attract a large number of users, it’s no guarantee that they’ll be willing to pay for your premium features.
It’s difficult to get users to upgrade to a premium plan. Once users have gotten used to getting your product for free, they may be reluctant to pay for it, even if they’re getting a lot of value from it.
It’s difficult to provide good customer support. When you have a large number of free users, it can be difficult to provide them with the level of customer support they need. This can lead to negative reviews and a poor user experience.
I believe that startups are better off focusing on building a fantastic product and charging for it. This may seem counterintuitive, but it’s actually the best way to ensure long-term success.