Comments on: Freemium is Not a Business Model

By: White Collar Game Blog » Debating About Freemium Model

White Collar Game Blog » Debating About Freemium Model — Wed, 26 May 2010 18:17:36 +0000

[...] Evans states in his post entry called Freemium is Not a Business Model that freemium doesn’t work for consumer-oriented business because the free users see little value [...]

By: Laraki

Laraki — Sun, 22 Feb 2009 23:25:36 +0000

Damned wrong.
Look at how many companies were able to generate revenues with a freemium business model.
Like any type of business model, you need to do it right. Also, I would say that freemium is not for all types of businesses.

By: Alex Osterwalder

Alex Osterwalder — Fri, 09 Jan 2009 11:32:18 +0000

Mark, I’m a couple of months late to this discussion, but I would seriously challenge your argumentation and many of the follow-up comments.

The essential variable that nobody has brought up for the freemium business model is how much the free part costs the company.

Skype, for example, incurs relatively little costs from additional free users. It can afford to give away and live from 6%-10% paying customers (from a base of 350 million users). Customers that use Skype for free can call as much as they want, the traffic goes through the Internet, independently from Skype, and generates almost 0.- costs for Skype (not considering the development of the initial software).

A video-service like youtube is completely different it has to pay for storage and bandwidth that free users consume. Each user generates additional costs that have to be covered by paying users. That makes it more delicate and the balance between paying and free users is challenging to establish (as many comments have pointed out).

So at the end of the day it is always the “cost of usage component” that makes or breaks a freemium model…

By: tinyComb » Blog Archive » What’s In Your Startup? It’d Better Have Revenue, Technology Or Users | tinyCrunch

Thu, 27 Nov 2008 19:09:37 +0000

[...] Don Dodge on The Next, Mark Evans, Silicon Alley Insider, broadstuff, About Mobility, Furrier.org, uncov, Feld Thoughts, Startup [...]

By: ProjectX Blog » Blog Archive » Xlinks digest - 4 / 11 / 2008

ProjectX Blog » Blog Archive » Xlinks digest - 4 / 11 / 2008 — Mon, 03 Nov 2008 21:12:59 +0000

[...] Freemium is not a business model Added on 10/28/2008 at 06:13PM [...]

By: Mark Evans

Mark Evans — Thu, 23 Oct 2008 15:34:29 +0000

For anyone interested, I’ve done a new post on freemium:

http://www.markevanstech.com/2008/10/23/another-stab-at-the-freemium-thesis/

Let me know what you think.

Mark

By: Another Stab at the Freemium Thesis | Mark Evans

Another Stab at the Freemium Thesis | Mark Evans — Thu, 23 Oct 2008 11:00:34 +0000

[...] seems I stirred up quite the hornet’s nest last week upon declaring that freemium is not a business model. The response was fast, furious and enthusiastic -a few comments in support of my view but mostly [...]

By: Two interesting links on venture and startups » Startable

Two interesting links on venture and startups » Startable — Wed, 22 Oct 2008 21:46:53 +0000

[...] Freemium is Not a Business Model, by Mark Evans. Mark is a Canadian writer/entrepreneur. The comments section here is really interesting, worth scrolling through. I agree that many startups underestimate the difficulties of making a real business via a freemium. However, enough startups have succeeded with this model that it has to be taken seriously. To prove that you’ve got a startup capable of really creating huge revenues via a freemium model you’ve got to have a serious marketing and conversion engine (that’s my two cents…) [...]

By: Mark Evans

Mark Evans — Wed, 22 Oct 2008 17:47:52 +0000

Mark,

Hey, good to see I started a vibrant conversation. Looking forward to your thoughts. I’m putting together a follow-up post that will, hopefully, go later this week.

Mark

By: Mark MacLeod

Mark MacLeod — Wed, 22 Oct 2008 16:11:44 +0000

Mark,

A courageous post that you have clearly taken some heat for. Here’s my take:

http://startupcfo.ca/2008/10/in-defense-of-freemium.html

I’ll follow up later this week with some thoughts on the pitfalls of freemium just to be fair. Though overall I like it as a business model.

mark