Lunch money for a web 2.0 service?
I’ve came across a interesting article by Zoli Erdos titled Would You Spend Your Lunch Money on a Web 2.0 Service? It contains a couple of points that are very similar to our business model here at Paymo and we really believe this is the way for the future. Some quotes below:
The genius in the Freemium model is that it allows new services to gain traction, essentially using us, free users as the marketing vehicle, then is we get hooked, we’re likely upgrade to enhanced services for a fee. This is neither â€œfreeâ€ nor â€œbait-and-switchâ€ – a completely acceptable, normal business model. In fact I think – especially in bad times like now – a switch by a popular service after their beta period to a fully paid model is also reasonable, albeit not easy.
While I never particularly liked it, let’s face it, the free, ad-supported model worked for a while – but it’s about to come crashing down fast. That leaves us with the fundamental rule in business: deliver value, get paid.