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Reframing the Problems with “Freemium” by Charging the Marketing Department

By  |  05/05/2013 | Customer Acquisition
(Contributed by Jason Cohen, Capital Factory Partner)

Seems like every third startup nowadays is using the “Freemium” business model: The lowest service tier is free, and the business is designed to get those users hooked and then upgrade to a paid plan.  It can work wonderfully of course, but usually it crushes and destroys companies, not only because it costs more than anticipated but because the founders didn’t realize the business model itself caused them to make incorrect decisions.

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