There are a lot of misconceptions around freemium and the value of non-paying users. Many of these you can’t see until you’ve gone through the cycle of creating

There are a lot of misconceptions around freemium and the value of non-paying users. Many of these you can’t see until you’ve gone through the cycle of creating a business, marketing it, getting customers, losing customers, repeat. Here are some of the things I’ve learned, either from experience or in-the-thick-of-it observation. 1. It’s rare for a business to experience dominantly viral, product-driven growth. Most don’t, including the successful ones! The few businesses that do succeed that way tend to attain ubiquity, so people mistakenly assume a free tier is the best path. (This winner’s bias must be a known fallacy, but if so I don’t know its name.) 2. Moving churn earlier in the customer journey speeds up iteration cycles and increases fidelity of feedback. We’ve all seen “hugely successful” apps that get a lot of users but never find a business model. Maybe if they started charging earlier in the customer journey they would have found product-market fit. It is extremely difficult to calculate customer value and pay for marketing without rapid feedback. 3. Not charging users can create hideous feedback loops. Just take a look at Facebook. 4. Free tiers are a consequence of the non-linear reality of venture-backed teams. Backing capitalists prefer a 5% chance of scoring 1,000 than a 50% chance of scoring 10, so they will of course encourage freemium (or rather, metrics like “daily active users”) alongside a whole host of other too-risky-for-most methods. 5. The author is completely correct that those willing to pay are the easiest to serve, and those unwilling to pay are most likely to need help, leave poor reviews, and give misleading feedback. 6. Again as highlighted by the author, the infrastructure behind multiple tiers is way more costly than you’d expect. It’s easy to get caught in the business mechanics when one could be making the product and marketing better. How costly do you think it will be? Multiple that by 3 to get the actual engineer/design hours, now multiple it by 3 again to understand how distracting it can be.