This Andreessen Horowitz podcast is about free pricing. It talks about both freemium and open source models.
Here are some takeaways:
- The basic difference between the freemium and open source models is that open source lets others see, modify, and distribute your product’s code while freemium doesn’t.
- Freemium and open source models set a lower barrier for users to try your product. They are therefore effectively marketing strategies.
- Having a freemium or open source product doesn’t mean that you don’t need sales and marketing teams. While freemium and open source models may help your product achieve initial traction, you need sales and marketing teams to reach more users, get these users to use more of your product’s features, and get more users to pay.
- For a freemium product, the free version of the product needs to offer enough features to show the user the value of using the product while also holding back enough features for them to want to switch to the premium version.
You can listen to the 33 minute piece here.