Zendesk

In 2007, Zendesk launched with a radical premise. Customer service software shouldn't require expensive servers or months of implementation. Michael Svarna and his Copenhagen team pitched free-tier support ticketing to tiny startups. They signed on, used it for free, built companies on top of it. When each company grew to 50 employees, they became paying customers. The unit economics were inverted. Traditional enterprise software vendors spent millions acquiring single contracts. Zendesk spent almost nothing acquiring thousands of free users because growth was built into the product. A company using Zendesk free at 10 employees paid nothing. At 50 employees, the monthly fee was just $300. At $500, it was $10,000.