We use the freemium model with our time tracking/pm/billing app Paymo succesfully. I don't think the model is finished, it really has great potential BUT it's n

We use the freemium model with our time tracking/pm/billing app Paymo succesfully. I don't think the model is finished, it really has great potential BUT it's not a magical formula that works everywhere. The way we do it with Paymo is that we offer basic functionality for free to people who can't afford the software at that point in time. (eg: someone who just starting freelancing). In time some of these users convert to paying customers. The major problem developers face at the moment is the huge availability of "free" - some users just assume that they are entitled to free software no matter what. You really need to provide real value and have your users perceive this value in order to make money. At the moment we have a bubble forming with huge amounts of cash poured into businesses that will never ever earn any real cash and i think it will pop pretty soon. This creates a lot of problems both short and long term which we'll have to deal with.