- The full product for free until your customers are successful model. Offer a $0/month plan that has full functionality so your customers can utilize the complete product. Limit the number of client or employee accounts they can create, the storage space, or the number of transactions on the free account. Make the limit something a freelancer would think, “It would take me a long time before I reach those limits and have to start paying. And by the time I have more than 20 clients or 2 employees or 1GB of files, I should be making good cash at that point and wouldn’t mind at all paying $24/month.” In order to subsidize the free version and as an incentive for your customers to upgrade, put your product’s logo and url on emails, invoices, or pages that your customers send to their clients. Make sure the logo is of a tasteful size and in a non distracting location. (examples: pbwiki, freshbooks)
- Open source, paid support. Take a free, open source product and offer really expensive support to corporate clients who need a cuddly safety blanket. This model is hard to scale because for each hour of support you need to spend an hour of time to handle the request. You could try to get a great payment-to-hour ratio by signing up a bunch of companies with monthly support retainers ($x/month for y hours of support) and hope they never get to y hours. (examples: acquia, red hat)
- The full product for free during a trial period. The same concept as #1 except the customer is forced to make a decision on whether or not they want to pay for the product on a specific date rather than to when they get bigger. (examples: squarespace, versions)
- Free half of a product (or Freemium/Shareware). The danger with this model is that some products only allow potential customers to experience a portion of the functionality in the free version effectively creating a useless sandbox version of the software. I think a use should be albe to try all of the functionality before making a deicsion as to whether or not they want to pay for it. (examples: basecamp, shopify)
- Free for your customers, advertising supported. Really hard to pull off. (example: gmail)
Regardless of which model you choose for selling software, I think the most important thing is to make it as easy as possible for a potential customer to get your software up and running. If its a web app, that means no lengthy sign up process (one click trial would be best), if its a desktop app, that means as few dependencies on external software as possible (e.g. .NET Framework version 3.5, Java Virtual Machine versuion 6 update 11, DirectX 11).
