We gained 100 users this month. Most of them will never pay us a cent
Last month we had 240 customers. Now we have 340. Should feel like a win.
Except 220 of those are on the free plan, and only 120 are paying. And that's not an accident, it's exactly what we built for.
When we designed our free plan, we made a deliberate call: put in everything a typical small business actually needs, not a crippled version meant to nudge people toward paying. Enough messages to run real conversations, one site or store, room for up to 10 students in a course.
We turned out to be right. Most customers who sign up just stay there. The free plan genuinely covers what they need, so there's no reason to leave it.
We got exactly what we set out to build, and now it's quietly working against us. MRR is around $6k, growing, but nowhere near the pace the user count is. Most of the people showing up land somewhere the free plan already covers, so the reason to upgrade never really shows up on its own.
I don't have a fix for this yet. Still working out whether the answer is tightening what's on the free plan, giving paying customers something the free tier genuinely can't touch, or accepting slower revenue growth as the price of building something people don't have to pay for before it's useful to them.
Curious if anyone else designed a free tier this generously on purpose and ran into the same wall.
The ratio is a symptom, not the cause. I'd instrument the moment a free user bumps the cap first: what share hits it, and of those, how many convert. If almost nobody hits it, the tier is too big; if they hit it and still don't pay, it's the upgrade story. Any idea which yours is?
There's a third axis besides size and act that nobody's mentioned yet: time. We drew UtilitySEO's line there. The free scan is complete and needs no signup, every page up to 2,000, but it's a snapshot. What's paid is the same view over time, from your own Search Console and GA4, with a 30-day trial and no card.
The free version answers "what's wrong today". The paid one answers "is it getting better", which only matters once someone has started fixing things.
Honest caveat: I can't tell you it converts better. At about four search visits a month we don't have the volume to test it.
For you, a time line could mean free covers running the business today, and paid covers history, trends and this month versus last. Do your 120 paying customers look back at old data more than free users do?
Same wall, consumer side. My self-care app has a generous free tier on purpose - habits, tasks, water tracking, basic food log all free, premium is stats, live tracking and "no limits." Result: ~1,100 new users a month, ~1-2% ever pay, and the ones who do mostly upgrade after hitting a limit inside the app, not from the day-0 paywall (that converts under 1%). So for me the lever hasn't been tightening the free plan - it's been where the limit sits. People pay when they've already built a habit and hit the wall mid-flow, not when the wall is at the door. One thing I'd try before cutting features: look at which free feature your paying 120 used most in their first week. That's probably the thing to put a ceiling on, not the thing to remove.
This is the quiet truth a lot of launch screenshots skip. Signups feel like progress until you notice how few of them ever hit the pain hard enough to pull out a card.
On our Discord directory side project we started treating "returned in 7 days and did one meaningful action" as the real win, not first-day joins. Vanity traffic from directories taught us that lesson the hard way.
Curious what one behavior you are now watching that predicts who eventually pays.
A different axis from the size caps, since it is the one we chose and I can report what it did and did not do.
My product is invoicing, and the free line sits on an act rather than a size: estimates, quotes and drafts are free with no cap, and an invoice costs one prepaid credit at the moment it is issued, which is the moment it goes to a client to be paid. New accounts get their first three invoices free. The upgrade reason is not a limit somebody slowly grows into, it is a bill they are about to send, and nobody issues an invoice they do not need.
The honest result so far is that it settles nothing, because the volume is not there to test it: a handful of real sign-ups, no paying customer yet. The one signal worth anything is that two of them went to checkout within a minute or so of finishing sign-up and stopped there. So the reason to pay showed up immediately, and the checkout did not close it. That is a different problem from yours, and a cheaper one to have at our size.
What I would take from it for your case: aryan_sinh asked the right question. If the 120 who pay share an act rather than a size, such as a second site, an export, or a payment taken through you, that act is where the line belongs. A size cap the free accounts never reach is not a lever at all.
One number before touching the limits: of your 120 paying, how many started on free? If most did, the free plan is your acquisition channel, and tightening it taxes the part that works. If few did, free and paid are two different audiences and you can gate harder without losing much.
Your caps are all about size (messages, one site, 10 students). The free accounts closest to a cap this month are where an upgrade reason shows up on its own, and they'll tell you whether each cap sits in the right place.
A free tier that covers everything a small business needs leaves nothing to upgrade to. The usual fix is to keep free for trying the product and put the limit where success happens (volume, a second channel, team seats, export), the moment they already feel the pain.
The free tier is working as designed, but what behavior distinguishes the 120 paying customers from the 220 who stay free?