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No matter how you slice it, to really disrupt a market – the odd vendor that got lucky notwithstanding – requires significant capital regardless of whether Freemium is leveraged as the marketing strategy or not. And when they do, that could be a big problem for the early-stage startups whose only real value proposition is that they are free.
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While startups are often the first to market or the first to try new and risky things when it comes to marketing, if something works – or could be made to work by exploring lessons learned by failed startups – often the larger more established companies will come around. I’ve provided updates to the numbers I cited at the bottom of this post. Below is the original paper, published in it’s entirety. NOTE: I originally published this paper in late 2010 exclusively for subscribers to my Mailing List. So, since when is disrupting markets relegated to startups? It is a bad idea to be focused only on the near-term and to miss the big, longer-term picture because of it. Unfortunately, this misconception really misses the point.įreemium is a marketing strategy – or quite often a tactic – and used most often to disrupt markets, competitors, etc. This myth is perpetuated by many of the Freemium advocates whose backgrounds – and current experience – are limited to early-stage, venture-funded startups. A common misconception about Freemium is that it is just for startups with nothing to lose.