Freemium

A pricing model that offers a free tier permanently, with paid upgrades for more features, capacity, or support. The free tier is an acquisition channel, not charity.

When you'd see it: Self-serve and product-led SaaS. The free tier draws users in; conversion to paid happens as they hit limits or need more.

Why it matters: Freemium can drive huge top-of-funnel cheaply, but only if the free tier is useful enough to attract users yet limited enough to drive upgrades.

Common mistakes: Making the free tier so generous nobody needs to pay, or so stingy nobody stays. The free-to-paid boundary is the whole game.