"If your market offers a free product you cannot afford to have a pay only product" Is this really the case? If you provide a pay-only product over a competito

"If your market offers a free product you cannot afford to have a pay only product" Is this really the case? If you provide a pay-only product over a competitor who offers it for free, surely you have to sell the benefits of your paid product over the free one? You have to convince users that paying for your product gives them a better service or experience than the free alternative. To take the example of email, there are many paid-for email services (e.g. fastmail) despite the fact that the market is dominated by free players such as Microsoft, Yahoo! and Google. An alternative to the free service is the free trial. It won't attract the free users, but it might encourage paying customers who want to try-before-they-buy.