A business model offering a free tier of a product with limited features or usage, alongside paid tiers that unlock additional functionality or higher usage limits.
Why it matters
Freemium lowers the barrier to trying a product to essentially zero, which can drive significant top-of-funnel adoption — but it also requires a genuinely compelling reason for free users to eventually upgrade, or the model produces a large user base that never converts to revenue.
In a sentence
"Our freemium tier is generous enough to be genuinely useful on its own, but capped in a way that naturally creates upgrade pressure for teams that are actually using it seriously."
Related terms
- Often confused with: Free trial (freemium offers a permanently free, limited version of the product with no expiration; a free trial offers full or near-full access to the product for a limited time period, after which it must convert to paid or lose access entirely).