I have offered a free plan for my SaaS from day one, with quite generous limits, on a niche with mostly paid-only alternatives. I think it comes down to tradeoffs.
As a self-funded solo founder, this has helped me gain many users since launch, which give me plenty feedback and help to validate new product features without having lots of marketing effort so far.
I don't sell any data, or display ads on free accounts. The reason to upgrade is more capacity, or complementary features for business users (e.g. alerts or organisation/team accounts).
That said, a couple of things to consider:
- Do your numbers: if you have 100 free users for every paying customer, are you going to be profitable? Can you handle the costs?
- In my experience, free users tend to attract more free users.
- They can generate a lot of support pressure, but handled right can be a great way to understand your customers problems. Handled wrong can kill you.
- Expect a small percentage of free users to cause the most trouble. From creating several accounts with different email addresses, to publicly complaining about the free plan being limited, to requesting lots of features only to switch to another free product once it's time to upgrade.
- If you're targeting B2B, price might not be as much of a factor as you might think. Are you going to save or make money for other businesses?
I could talk more about this, but will probably write a blog post one day with more learnings once I have them.
I’m happy to offer a free plan as long as it’s sustainable and I can see the benefits. So far it’s going great for me, but know what you’re getting into, and be sure you can handle the costs both in time and money with low conversion rates vs a trial model.
Edit: I moved the comment to this discussion as it's more fitting. I removed the link to my product.