Free pricing model plan vs freemium for a networking effect platform - Advantages & Disadvantages?

Vio Vanica
5 replies
We are facing the chicken and egg problem. In order for MyFocusSpace to run all its AI matching features, we need people on the platform. We are growing steady every day, only that it's not enough. We are thinking to make free to anyone who wants to be productive, and we are thinking of the advantages and disadvantages for this move. Would appreciate any input, or if you can share your experience on a free pricing model. What do you see as an advantage and disadvantage for a free pricing model? Can you recommend me someone who can help me with creating a better pricing model?


robiul haque
No Usage Barrier, User Base, Differential Pricing, Cost savings, Con – The Freemium Model Flaw and many more.
Alexander Moen
it depends on how you currently make money and what your customers "hire" your platform for. Do people want to work with new people each time or familiar faces? Do people get the most value out of a specific tool? Or the community? And, which part of those tools and community aspects are most important? Depending on the answers to those questions, you might not even really benefit from network effects much. Without you having and posting quantitative metrics around those areas, I don't think anyone can give you accurate advice.
Debajit Sarkar
A number of companies price their new products by either emulating their closest competitors or they set new-product prices to recover costs and tack on a profit. Very few companies determine the value of the product or service after carrying out an exhaustive customer research. Ideally, your pricing model should take into consideration two major marketing activities – price execution and price formulation. Your product pricing model entirely depends on your Go To Market Strategy. So develop that first. One of the primary goals of Freemium is to bring in new users.If you don't achieve that aim, it's likely that your free products aren't appealing enough, and you'll need to provide additional or better services for free. If you have a lot of visitors but few people paying to upgrade, you can have the opposite problem - your freebies are overly generous, and it's time to scale back. For the Free Trail model, length of the free trial and the price points you should charge are important metrices. On several occasions, I’ve noticed that once companies get to know their customers deeply, they swap the Freemium model for Free Trial.