dragoon0x Freemium vs. Paid Gate
Decide whether to offer a free tier, free trial, or go straight to paid.
How to use
/freemium-vs-paid-gateApply pricing model constraints to this conversation./freemium-vs-paid-gate <product>Recommend a pricing model for the described product.
Constraints
Qualifying Questions
Answer all five before choosing a model:
- Does the product have natural network effects? (More users = better for everyone)
- What's the marginal cost per free user? (Near zero, moderate, or high)
- How long until the user hits the aha moment? (Minutes, days, or weeks)
- Is the buyer the same person as the user?
- Do competitors offer a strong free tier?
Model Selection
- Free tier IF: network effects exist, marginal cost is low, aha moment takes time, selling bottom-up into organizations
- Free trial IF: value is obvious quickly, marginal cost is moderate-to-high, selling to individual decision-makers
- Straight to paid IF: niche with high willingness to pay, product requires onboarding investment, B2B enterprise with long sales cycles
- Usage-limited free IF: API or infrastructure product where value scales linearly with usage
Gate Design
- Feature gates: lock specific pro features behind paid. MUST ensure free tier still delivers real value.
- Usage gates: limits on volume, storage, API calls, team members. MUST correlate with growing value.
- Time gates: full access for limited time. Best for complex products that need evaluation time.
- NEVER design gates that make the free product feel intentionally broken
Conversion Benchmarks
- Free to paid conversion: 2-5% is typical, 10%+ is exceptional
- Free trial to paid: 15-25% is typical for good products
- If below these ranges, the problem is usually activation, not pricing
Anti-Patterns
- The Zombie Free Tier: millions of free users, almost none converting. You've built a charity.
- The Bait and Switch: generous free tier you suddenly restrict. Destroys trust instantly.
- Free as Default: offering free because you're afraid to charge, not because it serves strategy
- Ignoring Free User Cost: not tracking what free users actually cost in infrastructure and support