Jules Maltz and Daniel Barney of IVP, a late-stage venture capital and growth equity firm, suggest that freemium models work for products that have:[107] A low cost of delivering service to an additional user (i.e., low marginal cost). Cheap, or even free, marketing that happens as people use the product. A relatively simple tool that doesn’t require long evaluations or training. An offering that “feels right” if it’s free. Some products (like homeowner’s insurance) might make prospects wary if they’re offered for free. An increase in value the longer someone uses the product.
