How Freemium Impacts Your Economic Model

It may lower your customers’ barrier for entry, but it can also raise the stakes for you financially in the long run. For SaaS companies, it is incredibly important to understand the freedom and limitations of the freemium model. 

Free might be music to your customers’ ears, but it probably makes your CFO cringe. After all, if offering your product for free isn’t positively impacting your bottom line, then it’s not going to be worth it. But instead of thinking of it as free, explains Kareo founder and CEO Dan Rodrigues, the freemium economic model really just allows you to shift funds around.

Typically, SaaS companies frontload a lot of their expense into sales and marketing. But, if your product sells itself, you can stop pumping money into those areas. Listen as Rodrigues explains where those funds can be reallocated to if you choose to go freemium.

Photo by Steve Corey

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