I can recommend that you check out Fred Wilson’s presentation titled “Does information want to be free”. I agree to his vision on the subject and personally believe in the business model he puts forward at slide 13 called “freemium”:

  • Give away the baseline product for free
  • Generate network effects/data value with the free model
  • Monetize with advertising
  • Upsell a premium product with a subscription model

Best existing example to my opinion is Flickr. What do you think?



  1. I think it strikes a chord. I do prefer this model as well. The network effects are indeed key to success on the Internet (1.0 or even more so 2.0). I do miss the possibilities of different revenue streams like market research, affiliate deals, content syndication etc.

    However, every revenue model can/should be customized based on competitive situation, buying behavior, perceived revenue model standards, business sector, macro-economic situation, cultural context of target audience, nature of product, repeat purchase cycle etc. There is no panacea.

    Love your blog by the way, interesting posts ! 🙂

    Good luck with your venture.

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