The purpose of this article is to highlight the key points for succeeding with the freemium business model in online digital business from a strategic point of view. The freemium business model has recently become one of the most dominant business models in online markets. However, entrepreneurs and managers still have a limited understanding of why some freemium business models become successful and sustainable while others do not.
The findings and recommendations derive from the study of online digital companies and applications, which either succeeded or failed to develop a sustainable freemium model. These are LinkedIn, Spotify, Box, Eventbrite, Chargify, Gasketball and TravelCrony.
The article describes the generic strategy and the key strategic choices that enable and support successful freemium business model execution in an online digital business.
The research is limited to digital companies applying a freemium business model and offering their products and services online.
The findings and recommendations can help new and existing companies, first, to evaluate if the freemium business model is feasible for them, and second, to adjust strategies to develop a successful freemium business model and scale it up.
The article extends the current understanding of the freemium business model logic.
The authors thank several members of the case organisations for their generous assistance and contribution to this research. They thank the editors of the special issue, in particular Pamela Sharkey Scott, and the anonymous reviewers for providing their invaluable feedback and guidance. Last but not least, we gratefully acknowledge the assistance of Ariel Wertlen Spilkin and Birgitte Thusing in collecting and handling parts of the data.
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