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Strategywarm-up

Should a free productivity app move to a freemium model or a free trial?

How to approach it

Ask how quickly users see value and how much a free user costs to serve.

How a strong answer opens

“I'd ask two things: how quickly users see value, and how much a free user costs us to serve. Those two answers mostly decide it.”

Outline of a strong answer

Try answering out loud for a few minutes before you open this.

Explain the difference between freemium and a free trial
Freemium fits when free users drive growth and cost little
Trial fits when value appears quickly and serving costs are high
Look at the app's usage data
Run a test: a trial for one sign-up cohort, freemium for another
Compare paid conversion, 90-day revenue per sign-up and referral rate

Where this question usually goes wrong

Picking one model out of habit without looking at how fast users reach value or how much free users cost to serve.

Learn the method

Monetization and pricing in Module 5, Product strategy.

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