Freemium looks like the easiest Product-Led Growth play. Put a free plan on your site, let people sign up, and boom, you are “doing PLG.”
Except most freemium plays flop. Free users pile in, never activate, never upgrade, and never pay. Meanwhile your infra bill keeps climbing.
Congrats, you just built a charity.
Freemium can work, but only if it is designed with intent. Without that, you are not doing PLG. You are just giving your product away for free.
Freemium is founder catnip because it makes the charts look good.
The myth goes like this: free users lead to viral growth, which leads to upgrades, which leads to money.
The reality looks more like this: free users lead to higher server bills, which lead to “why is nobody paying us.”
Freemium fails when it is not tied to product value. If users can get everything they need on the free plan, why would they upgrade?
Most free plans:
That is not a growth strategy. That is a slow bleed.
Freemium can work, but only when it drives users toward activation and then naturally into a paid plan.
The free tier should:
In practice this means letting people use the product without limits on the core. Create as many projects as they want, design, code, write, whatever your product does. But the moment they need structure, scale, or admin controls, the free ride ends.
This is why successful freemium models often put paywalls around organisational or enterprise features. Think advanced permissions, admin dashboards, security layers, or team-level organisation. A single user or small team can thrive on free, but once five or ten people try to work together, it gets messy fast without the paid plan.
The free plan gives them value. The paid plan makes it sustainable.
If you want to know whether freemium is working, track the metrics that prove humans are getting value, not just inflating vanity charts.
Traffic and signups do not prove freemium works. Conversion and retention do.
The common thread: the free plan pointed users toward value, then made paying the obvious next step.
Contrast that with products that gave away everything for free and ended up with millions of users and zero MRR.
Freemium is not a pricing model you copy-paste. It is a strategy that only works if it is tied to user behavior and product value.
Freemium is not a growth hack. It is a pricing model that only works if it is tied to activation, conversion, and retention.
The free plan should give users the full core experience. Let them get to value, let them stay, let them even push the limits. But the moment they need scale, organisation, or control, the paid plan becomes the obvious choice.
That is how Dropbox, Slack, and Figma pulled it off. They gave users real value for free, then made paying the logical next step when teams grew or when usage reached a point where free no longer worked.
Without this design, freemium is just free. And free users do not pay your server bills.
If you want to know whether your freemium strategy is working, look at the funnel. Roaarrr is built to show you exactly that: real humans activating, retaining, and converting, not just vanity signups.