5 Reasons Why Every Startup Should Offer a Free Tier, and One Big Reason Why They Shouldn’t

Your product offering needs to be able to take a fair bit of abuse

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A well-thought out free-tier strategy can be incredibly effective for bringing in new or “on-the-fence” customers. A poorly executed free-tier strategy can damage your brand forever.

A friend of mine is the owner of a minor league baseball team. He once told me that he had one rule for the promotions he ran. He would discount — or even give away — food, drinks, souvenirs, anything associated with the ballpark experience.

Except for one thing: The game tickets themselves.

“The minute you do that,” he said, “you devalue the product on the field.”

He’s right, of course, and that’s the one big reason you should never give away the “product on the field” for free. Yet startups, especially tech startups, give away their product all the time in the form of a free tier. They let you use their product as much as you like for as long as you like, within certain limits.

Here’s the thing. Those free tiers work. Unquestionably, but within certain limits.

Ultimately, no matter how small the discount or how short the trial, the product will…