Article | Harvard Business Review | May 2014

Making 'Freemium' Work: Many Start-ups Fail to Recognize the Challenges of This Popular Business Model

by Vineet Kumar

Abstract

The article discusses the "freemium" business model, which is used by some Internet businesses and smartphone application developers to give users free basic features of a digital product and access to premium functionality for a subscription fee. The discussion topics include the freemium marketing strategy, the life cycle of upgrades in freemium companies, and the six questions that new business enterprises should explore when considering the freemium model. The article mentions how four companies including NYTimes.com newspaper and Dropbox cloud storage use the freemium model.

Keywords: freemium; Startups; business model; Product design; Business Model; Marketing; Business Startups;

Citation:

Kumar, Vineet. "Making 'Freemium' Work: Many Start-ups Fail to Recognize the Challenges of This Popular Business Model." Harvard Business Review 92, no. 5 (May 2014): 27–29.