Freemium for Sale: 6 Reasons You'd be Crazy Not to Give Your Software Out for Free

Aaron Levie (
Strategy & Business Models
Location: New York East
Tags: startups
Average rating: ****.
(4.33, 3 ratings)

When launched in 2005, an early investor said, “You’re crazy to give this away for free.” We’ve found otherwise. Here’s why:

Purchasing decisions have traditionally been made at the top, with software more or less forced upon employees, gift-wrapped in training manuals and convoluted policies. But with the advent of user friendly, free online tools, the balance of power has swung in users’ favor. Today’s knowledge workers are going around cumbersome platforms to connect and collaborate more effectively, and IT departments are paying attention. We’re at the beginning of a massive shift, as businesses evaluate low-cost, on-demand alternatives to traditional enterprise solutions, and the first services they’ll consider are the ones their employees are already using.

The benefits of Freemium touch all areas of your organization, ranging from sales to product development. Here are six reasons your company would be crazy not to give out software for free:

1. Lower friction drives faster adoption: hook users early and get their data

2. High marketing leverage: your users are your most powerful evangelists

3. It forces you to make a much, much better product: give users a compelling reason to upgrade

4. Sales will love you: your leads are people who already want your product

5. Reach traditionally impenetrable markets: your product will seep into new – and sometimes surprising – ecosystems

6. If users don’t want to pay, they don’t have to leave: you only lose customers to yourself

Photo of Aaron Levie

Aaron Levie

Aaron Levie is the CEO and Co-founder of, which he launched in 2005 with the goal of helping people to access, collaborate, and share all their content online. Based in Palo Alto, has since grown into a leading Cloud Content Management solution for more 4 million users and companies ranging from small businesses to Fortune 100 companies. At Box, Aaron focuses on product and platform strategy, incorporating the best of traditional content management with the most effective elements of social business software.

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