The Free Tier

What this pack runs.

A free tier gives the product to anyone who asks, in the expectation that a share of them will pay later. Every one of them costs something to serve and most of them never pay, and the decision is whether the share that does is large enough to cover the ones that do not. By the time it reaches an agenda, finance is calling the free a cost and growth is calling it an engine, and both are holding the wrong number: a cost that is an allocation, and a conversion figure that is paying users over all users, a ratio of two stocks that rises whether or not anybody converted this year. This pack turns it into one division. What one free user costs a year, net of what they earn directly, over what one conversion is worth across the years the convert stays, is the break-even conversion rate. The distance between the flow, the share of the free base that started paying last year, and that rate is the cushion, and it is how far conversion can fall before the free stops paying for itself. Beside it: what a new customer costs through the free against what one costs through paid acquisition, and the payback in years, because paying for itself and paying for itself this year are different findings. It stops on two conditions almost no company has met: a cost per free user from usage rather than by allocation, and the conversion rate counted as a flow rather than quoted as a ratio.

The casebooks these cases come from.

The pack reads nine sourced decisions through the framework. They are drawn from these casebooks, each one a set of verified records on a single decision type.

A verified record has passed a mechanical claim-versus-source check, a second model's read, and human approval. The count is what exists today, not a target.