Selecting Freemium business model in our Startups projects

Selecting Freemium business model in our Startups projects

Many authors define the business model “Freemium” as wrong model and no future because of the complexity, how sensitive is the model for any further definition or change, the low product valuation or the lack of customization. Only a few large companies have accelerated and become profitable as Linkedin, Dropbox or Spotify (Mashable, Mark Evans). But in the current situation, the lack of commercial ability of startups, the lack of positioning and the product validation process define the Freemium model as a realistic option. We have decided to apply this model on the first projects. The details of our reasons are:

The lack of positioning, it is clear that we are unknown and generated a initial barrier in customers. This is further exacerbated in cold doors sectors such as the healthcare, where we are moving forward with the project aTurnos. Freemium models allow users to test the tool, touch a real product and check that there is a community that validates the tool. This as a plus.

The validation of the product, the definition of a useful product for different profiles within a single problem requires a great job of “product manager.” Especially in management tools, it must be very carefull to define functionality that meets the needs of different profiles but without complicating the normal use of the tool. The Freemium model gets user feedbacks about common functions in a fast way, the community is a very effective product manager.

The commercial expenses in technological startups can be high and complex, and this is not the core of the company. We can not spend our human resources on something we are not master. Startups teams usually consist of technical staff with little business knowledge such as our case. We seek for key investors or commercial alliances with big business knowledge in the target sectors. These investors fit with the freemium model because exponential growth can be achieved.

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