Freemium tier revenue model.

Freemium revenue model distributes users across tiers: free, basic, pro, enterprise. Typical distribution: 70% free, 20% basic, 8% pro, 2% enterprise. Revenue comes from paid tiers. Enterprise revenue usually dominates despite small user share because price points are 10-100x higher. This calculator models revenue from full tier distribution.

10,000 signups × 20% basic × 9/mo = 18,000 MRR from basic tier. 8% pro × 29/mo = 23,200. 2% enterprise × 199/mo = 39,800. Total 81,000 MRR, 972k ARR. Enterprise tier (2% of users) contributes 49% of total revenue. This is why every freemium SaaS tries to build enterprise tier eventually.

Tier design principles: free tier gives enough value to attract users but holds back features that enterprise requires (SSO, admin controls, team features, higher limits). Basic tier for individuals or small teams (5-15). Pro tier for growing teams (25-50). Enterprise for >50 seat deals (100-500+/seat). Pricing spreads should reflect value jump, not cost increase.

Quick example

With total signups of 10,000 and free tier of 70% (plus basic tier of 20% and basic price monthly of 9), the result is 81,000.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Total Signups, Free Tier %, Basic Tier %, Basic Price Monthly, and Pro Tier %. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

Each tier: users × tier % × price. Sum across tiers = monthly revenue. Annual = monthly × 12. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

What to do with a low result

A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.