What is a key feature of a freemium model?

The freemium model is characterized by offering a product or service with basic features free of charge, while charging for access to advanced features or enhanced functionality. This approach allows users to start using the product without any financial commitment, which can lead to a broader user base. Once users are engaged and see the value in the basic offering, they may be more inclined to pay for additional features that enhance their experience or provide significant benefits.

This model effectively leverages the principle of getting users invested in the product before asking for payment, which can facilitate a smoother transition to paid tiers. Additionally, it enhances customer validation because you can gauge user interest and willingness to pay based on how many convert to the premium features over time.

In contrast, the other options describe models that don't align with the freemium strategy. The notion of all features being paid contradicts the core principle of freemium. Similarly, requiring upfront payments does not reflect the essence of allowing free access to basic features. Lastly, a model that relies on transaction fees does not fit within the freemium framework, as freemium focuses more on tiered features instead of transactional pricing structures.