Don Dodge on The Next Big Thing: Freemium - Free to paid conversion rates

Timely reality check; see the full post for more analysis 

I am at DealMaker Forum today. We just finished the speed dating sessions with start-ups and I was struck by one common theme. The most common business model is Free Service with an up sell to paid premium subscriptions, commonly known as the "freemium" model. I asked each of them what kind of conversion rates they were seeing. The average is less than 3% conversion. The companies presenting include; Echosign, Seriosity, Smartsheet, Central Desktop, Oddcast, Yugma, and others.

Source: Don Dodge on The Next Big Thing: Freemium - Free to paid conversion rates