About

The purpose of this wiki is to explore the use of the freemium business model.

Wikipedia quotes venture capitalist Fred Wilson as being the first to articulate the freemium business model in 2006.

"Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base."

This definition is derived from the business models of skype and flickr among others. They offer an Internet service for free and a premium service that you have to pay for. Until know this model has been mostly used for online businesses. The scope of this wiki is also online businesses, but mainly the use of this model in non-online businesses.

How does this make sense

The idealistic argument for freemium

In a freemium business model a valuable product or service is given away for free. Besides serving as a way to sell premium or complimentary products, these free products also serve the recipients directly. Many people will share in this benefit, also those who could previously not afford it.

An example where a freemium like business model does something good for the world is the open source software industry. A lot of the developers on open source software projects are today paid to participate. They are paid by companies who use the expertise they gain during this development. This could be as consultants or knowledeg that can help sell hardware.
While these companies are making a profit from contributing to open source software, the results of their are available for the rest of the word.
So while a open source programmer is making a profit for IBM, he might also help create access to IT for poorer school systems around the world.

The business argument for freemium

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