“There will always be a company that replaces you. At some point your BlackSwan competitor will appear and they will kick your ass. Their product will be better or more interesting or just better marketed than yours, and it also will be free. They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo. You get the point. Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience. Or will be differentiated enough, and important enough to the audience to maybe even charge more. Who knows. But they will kick your ass and you will be in trouble.”

- Mark Cuban

We’re not completely against the Freemium model for web apps (heck, that’s what made DropSend really succeed for us) but there are some important things to consider before taking this route. Here are a few great resources to checkout when deciding on your web app pricing model:

1. Freemium did not work for Phanfare
2. When you succeed with Free, you are going to die by Free by Mark Cuban
3. Jason Fried on why Free is the Future of Failure. Jump to minute 9:15 on the video or audio.