Offer free self-hosted tier to maximize adoption, monetize through convenience and advanced features
The open-core model captures value at multiple levels: free for technical users who self-host, paid for users who want hosted convenience, and enterprise licenses for advanced features. This eliminates adoption barriers while creating clear monetization paths based on user sophistication and needs.
When to use
For developer tools or infrastructure software where technical users can self-host but many prefer managed solutions, especially when targeting both individual developers and enterprises
Don't do this
Charging for basic features that developers can easily build themselves, creating friction that limits adoption and community growth
2 Founders Who Did This
Offered three tiers: free self-hosted version, paid hosted version for convenience, enterprise licenses for advanced features on self-hosted infrastructure
Offered the complete product free for self-hosting with no feature gating. Cloud plans from $29-99/mo charge only for hosting convenience. No enterprise feature locks or SSO paywalls