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Free VS Paid: How To Establish Product Market Fit
- Published December 14, 2022 7:13AM UTC
- Publisher Osama Hassan
- Categories Capital Raising Tips
When establishing product market fit, and building initial traction, a lot of founders don’t charge users.
It’s based on the assumption that for a product that should be paid, if you make it free, you can get honest feedback in-exchange.
I think this is a flawed approach.
It’s okay to be free in certain cases where you have a structured and intentional plan in place to getting paid.
We know that freemium, open-core, and ad-supported business models work.
Sometimes, you just have to get a lot of free users before you can start making a lot of money.
But these are exceptions to a well-established norm.
Why? Because investors are looking for returns and will not invest in your startup if your business has no potential to generate recurring, sustainable revenue.
The trick to getting paid users is to make sure that you’re not charging out of fear or are worried about not getting a second chance to put new pricing out there.
Remember, if you’re not charging, you’re preventing yourself from learning if your product is something people REALLY want.
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