Read the original at Lenny’s Newsletter ↗lennysnewsletter.com · subscriber post
By Lenny Rachitsky · lennysnewsletter.com · @lennysan on X · YouTube · LinkedIn
Lenny explains when a product should be free and how to choose between freemium and a free trial, based on an analysis of about 50 SaaS pricing models. He frames free as an acquisition strategy, either disrupting a business model or generating leads, and gives guidance on what to keep free versus what to charge for.
Subscriber post — summary only01Key takeaways
- Free is an acquisition strategy, not a monetization strategy, used to lower CAC and get attention.
- Many successful SaaS companies combine freemium with a trial of their paid plan rather than choosing one.
- Use a trial instead of freemium when the product needs hand-holding and carries a high price point.
- Keep free the features that spread the product and hook users; charge for admin, support, power-user needs, and higher limits.
- Avoid freemium until you understand how to convert leads, since it can add noise to segmenting your market.
“Don’t do freemium until you truly understand how to convert leads to customers, because you’ll end up increasing noise or false positives when you’re trying…”Patrick Campbell · Lenny’s Newsletter
02Frameworks mentioned
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.