

Freemium Is Not a Business Model, Trust Me - tomsuchy
http://www.bnet.com/blog/smb/freemium-is-not-a-business-model-trust-me/3338

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MountainDrew
I think it really depends on your market. Sites like Facebook or Flickr depend
on having a huge community, so offering free accounts makes sense. Others,
such as the one described in the article, are hurt by all the resources it
takes to support the free users when those resources really should be used to
draw in more paying customers. Like all business models, I think you just have
to ask your self if the freemium model is a good fit for your current product
or not.

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Mz
It sounds to me like they were giving away too much and the premium services
weren't desirable enough for most people. Also, their initial target market --
"group and event organizers" -- are typically not the _individual consumers_
he paints them as. Most of these folks will be organizing stuff for their
kid's baseball team or doing something church-related or some such. In other
words, they are basically charitable organizations, but often of the sort that
has little to no funding. For an organization like that, coming up with $5/mo
is a huge challenge.

And, yes, these types of people are frequently a pain in the ass to deal with:
They typically don't have training for what they are doing, they are doing it
"for the greater good" with little or no personal benefit (or vastly
underestimating what they are getting out of it), they get no respect for the
work they do and they often have a sense of entitlement based on the idea that
they are giving their time and energy away for free so it is only "right" that
other folks kick in something for free to help them out. If you have a
business, they may well see you as a wealthy capitalist pig who is basically
obligated to do some do-gooding to save your worthless greedy soul.

Trying to induce folks to pay a small fee when they don't have any money to
give you is the thing that is "not a business model". That doesn't mean
freemium has no place in the world.

