Very good article about a formula that actually lets you determine whether a freemium or paid model is right for your business. With this in mind, Mullany’s equation for freemium businesses looks like this: Price Paid by Premium User – Cost of Proving the Service to the Premium User – [ (1/Ratio of Premium:Free Users) * (Cost of Free Service Per User + Cost of Marketing to get a Free User) ] = Profit Per Premium User Check out the full article over here.