Why is the freemium model dying?

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JASON LEMKIN

Freemium isn’t dying. Most first-time founders start there, or at least, something close to.

What has changed — now that there is a lot more knowledge and information and coaching out there for SaaS founders — is how quickly founders either move up-market, and away from 100% freemium, and/or add a sales team.

Freemium usually doesn’t get you to $100m in ARR, and it usually isn’t a marketing strategy (this is rookie error #1 — free doesn’t drive traffic nor, for the most part, paying customers either). But it’s a fine place to start and learn, and if it even gets you to 100 paying customers, that’s a win. Slack got to tens of million in ARR before hiring a true sales team.

So it’s not dying. It’s just the best founders aren’t sticking with a 100% freemium model any longer than it serves them.

More here: Why You Need 50 Million Active Users for Freemium to Actually Work

E.g., one from today:

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Published on July 1, 2016
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