Purpose: 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 companies using freemium business models become successful and sustainable while others do not. 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.
Design/methodology/approach: 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.
Findings: 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.
Research limitations/implications: The research is limited to digital companies applying a freemium business model and offering their products and services online.
Practical implications: 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.
Originality/value: The article extends the current understanding of the freemium business model logic.
Keywords: business model, business model innovation, freemium business model, freemium