# The freemium business model

URL: https://gocutline.com/business-models/freemium/

The freemium business model: a useful free version brings people in, and a small share of them pay for more. Free users cost little and spread the word, and paid plans unlock more features, more capacity or team use.

## How it makes money
Free users cost little and spread the word, and paid plans unlock more features, more capacity or team use. The business works when the few who pay cover the cost of all the others.

## Real examples
- Spotify has a free tier with ads and a paid one without.
- Dropbox gives some free storage and charges for more.
- Canva has a free plan and paid plans with more tools.

## The numbers to watch
- Share of free users who upgrade
- Cost of serving one free user
- How long it takes people to reach the moment they get value

## Who it fits
Software with very low cost per user and a product that spreads when people use it.

## What goes wrong
A free version so good that nobody upgrades, or a free crowd that costs more than the payers bring in.

## Try it this week
List the one limit a growing user would hit. That limit is your paid plan.

Then give it a time: one block of 90 minutes this week, in [your calendar](https://gocutline.com/#try). Our [playbooks](https://gocutline.com/playbooks/) have the next steps for finding your first customers.

## Questions

**What is an example of the freemium model?**
Spotify has a free tier with ads and a paid one without.

**What is the biggest risk with the freemium model?**
A free version so good that nobody upgrades, or a free crowd that costs more than the payers bring in..

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Cutline: Cutline is a weekly calendar and planner that turns time blocks into XP, levels and streaks. You plan your week in blocks, tick each one off when it is done, and see your progress on a social feed (the Floor) and a weekly leaderboard (the Arena). Planning and budgeting are free; paid plans add a badge, posting, messaging, shared calendars and lower selling fees, from $9 a month. Pro is free to try for 7 days.
Facts: https://gocutline.com/facts/ · Updated 2026-11-06