Freemium

Imagine you're at a lively food market, where each vendor hands out free samples of their dishes. You can wander from stall to stall, enjoying these samples without spending any money. This is similar to a freemium business model. Companies let you use a basic version of their service for free, hoping you'll like it so much that you'll want to pay for the full version, just like buying a whole dish after tasting a sample.

As you explore the market, some vendors give you just a small bite, but it's enough to understand the flavor and quality of their food. In the same way, a freemium model offers a free version that's genuinely useful and highlights key features, making you want more. It's not merely a teaser; it's a valuable experience designed to show you why it's worth upgrading.

Now, picture that you loved one of those samples and decided to buy the entire dish. This purchase is where the vendor makes their money, similar to a freemium app where users pay for extra features or to remove ads. The freemium model relies on a small percentage of users upgrading, but those upgrades cover the cost of providing free samples to everyone else.

For startups, freemium is important because it lowers the barrier for users to try your product. It helps quickly build a large user base, offering valuable feedback and opportunities for upselling. It's a strategic way to establish brand loyalty before monetizing.