Freemium

Freemium gives every user a genuinely usable free tier with built-in usage limits, relying on organic upgrade pressure and viral referrals (rather than a ticking clock) to convert users to paid. It tends to win for products with high viral potential and clear, natural usage ceilings — contrast with a free trial, which creates urgency through a time limit instead of a feature limit.

• —Freemium works best when the free tier itself drives referrals — the free users are part of the growth engine, not just a funnel.
• —A "reverse trial" (start on paid, downgrade to free at the end) often activates better than freemium because users see full value first.
• —A sign-up-to-paid conversion rate below 3% usually means the free tier gives away too much value, or activation is too slow.

This is the exact lesson that covers this term in depth — with examples, diagrams, and a hands-on exercise.