Freemium

Offering a free tier with core features to attract users, then charging for premium features, capacity, or advanced needs. Free acts as the top of the funnel.

Why it matters

Freemium can drive fast, low-cost adoption and let the product sell itself, but only works if enough free users convert and the free tier does not cannibalize paid. Getting the line between free and paid right is the whole art of it.

For example

Dropbox gives everyone free storage and charges when they need more space, using the free tier as the top of its funnel.

Related terms

Product-Led Growth Tiered Pricing Subscription Model

Go deeper

See how founders actually handle this on Growing and marketing, part of the Starting Up hub.

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