Using Free In A Business Model More Than Just Waiting For A Business Model To Show Up
from the this-again? dept
It's a good question, but I think the analysis is a little bit off. First, he narrowly (and, I believe, incorrectly) seems to define Freemium as offering a free version now with the idea of offering a premium version later. But that's not what most freemium models do. They tend to offer both a lower level free version, and, at the same time, a more advanced premium version. While those models can be risky if they are trying to offer other infinite goods in the premium version, many premium offerings actually focus on scarce goods (bandwidth, server time, support, etc.).
Second, Cooper's thesis seems to be that the "Freemium" model is really about giving things away and then praying that a business model shows up. While this may be true for some (poorly thought out) businesses, it's not necessarily true across the board. Plenty of businesses start out by recognizing they need to grow attention first, before that can be turned into a business model, but that's different than using a "give it away and pray" business model.
Finally, Cooper seems to assume that most VCs won't take the long term view on the companies they invest in. Again, that may be true in some cases, among weaker VCs. But good VCs are actually more likely to see the value in doubling down and building up core business during any expected downturn. In the end, Cooper's attack seems like a random attack on "free," based on a few faulty premises not backed up by what's actually happened in the market.