is the combination of free thinking and entry theory a bluff or an effective business model?

is not a trick to see if the profits on the back end can cover the cost of the front-end free.

First of all, I have the understanding of "free thinking" and "Entrance theory" in the main question of the topic:

Free thinking: Products to low-cost, free, subsidies and other forms into the market, resulting in the explosion of user volume growth.

The entrance theory: the product seizes the link and the information channel, becomes the person accesses the information the only way.

When "free" encounters "entrance", an Internet product can be born like this:

Find a category of people with the same characteristics (so-called target groups), such as shopkeepers, drivers, college students, entrepreneurs ... Look at what information they need each day and what they can use to find a way that is not yet discovered and has a greater market potential (the so-called information portal). Using the way of the Internet to think (the so-called internet thinking): Can the information symmetry, can remove the intermediary, can do the electrical business ... Then the original access to the profits of the portion of the windfall to cost price (such as millet mobile phone), a favorable part of free (such as 360 antivirus), a free part of the subsidy (such as dropping a taxi), the so-called Internet subversion, put a lot of money in order to obtain a large number of users in

I understand that such a product is a typical "free" + "entrance" way to do. In reality, there are many Internet products are also in accordance with this idea to do. In fact, such a product so far, only designed half-the front-end. One of the reasons for the dotcom bubble of the early 21st century was that many of the companies ' business models had only a front end, a frenzy of traffic and user volume, and overestimated the value of the product.

So this "free" + "entrance" way, to become an effective business model, it is necessary to profit through the backend to recover the cost of the front-end. Usually the back end can have a variety of ways to profit:

1, wool out of sheep. Provide paid services in the product, when the user reaches a certain level, there will always be a certain percentage of users pay for paid services. These premium users pay to ensure that the product can continue to provide free service.

For example:

QQ is the access to Instant messaging, basic free, QQ membership charges.

Youku potatoes are the entrance to the online video, with free video and a charge to see the video.

Network disk is the entrance of the cloud storage files, a certain amount of free, expansion and other advanced services charges.

2. The wool is in the ox. The product itself is completely free of charge to the user. But through advertising, bidding and other ways to allow advertisers, corporate users to pay, to ensure that users can continue to provide free service.

For example:

Portal is the access to news, individual users to see the news completely free, advertising mainly for advertising pay.

Baidu Search is to retrieve the Internet information portal, individual users do not pay, participate in bidding enterprises to create the tens of millions of Baidu's empire.

Of course, there are more advanced business models: The wool is on the cattle, let the pig to pay. The following opportunities can be introduced.

This "free" + "entrance" is a sustainable business model, with the back end of the profit covering the front-end inputs and a certain surplus. Or the early stage of market expansion to hit heavy, monopoly market can win huge profits, such as drops and fast, the United States and hungry mody ...

For individual entrepreneurship, this design method of the front and back end has some enlightening significance:

Front end free or low-cost way to let users trial products, cultivate user habits, the backend to some of the quality of user fees.

Organize customers in a free way and make a profit through the sponsorship fee of the merchant.

......

These are examples of practical applications in reality.