Freemium Decision Framework (What to Make Free)
Make a feature free if it drives your growth model; gate it if it creates friction for growth.
- Difficulty
- Moderate
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 88%
Elena Verna's checklist for deciding what belongs in a freemium tier: align on the strategic value of free, then make free anything that promotes your growth model (indirect monetization, universal utility, the aha moment, habit loops) and gate anything that would create friction for growth. It ties every free/paid decision back to growth-model outcomes without sacrificing monetization.
Origin
From Elena Verna, head of growth at Amplitude (formerly CMO at Miro, SVP Growth at SurveyMonkey).
Core principles
- 01First align on the strategic value of 'free' before deciding features.
- 02Anything that promotes your growth model goes into free; anything that creates friction for it gets gated in paid.
- 03Product-led retention must come before product-led acquisition.
- 04The decision is heavily dependent on your actual monetization strategy.
How to run it
- 1
Align on the strategic value of free
Decide what 'free' is strategically supposed to achieve for your growth model before evaluating any individual feature.
- 2
Check indirect monetization
Ask whether the feature drives virality or network effects (indirect monetization). If yes, make it free.
- 3
Check universal utility
Ask whether it suffices for every user regardless of complexity. If so, it's commoditised anyway and should be free.
- 4
Check the aha moment
Ask whether it helps deliver the aha moment. If yes, put a proof-of-concept of it in the free offering.
Pro tip The aha moment belongs in free so users experience core value before paying.
- 5
Check habit loops, then gate the rest
Ask whether it creates habit loops (notifications, channel communication). If yes, make it free. Anything that creates friction for your growth model gets gated in paid.
Pro tip Rule of thumb: promotes growth model → free; creates friction for growth model → paid.
Watch out It's an over-encompassing statement — always weigh against your actual monetization strategy.
In the wild
Verna argues you must nail product-led retention (activation and habitual engagement) first, because product-led acquisition depends on users habitually using the product to refer others or create content.
→ Companies that start with product-led acquisition before retention have no hook to convert acquired users.
Common mistakes
Starting with product-led acquisition before retention
If users aren't habitually using the product, there are fewer opportunities for referral or content-driven acquisition, so acquisition efforts have nothing to hook into.
Deciding free/paid without a monetization strategy
The whole framework is dependent on your monetization strategy; applying the checklist mechanically without that context can gate the wrong things and sacrifice monetization or growth.
Is it for you?
Best for
B2B product leaders and founders designing or revising a freemium/product-led model.
Not ideal for
Products with no one-to-many relationship where product-led motion is hard to stand up, favouring sales- or marketing-led models.
From the transcript
“you'd first have to align on what your strategic value of free is”
“anything that actually creates friction for my growth model I'll probably gated in the paid anything that promotes my growth model I will put it…”
“never start with product LED acquisition you first always have to start with product LED retention activation and engagement”
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