Via Dave Winer I get to Fred Wilson’s favorite business model:

Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc, then offer premium priced value added services or an enhanced version of your service to your customer base.

… This business model has been around for a long time.  Shareware always used a model like this and there are many successful software companies that have been built with this model.

Pretty interesting thoughts, definitely a post worth reading. Mainly in combination with Russell Beattie’s Wtf2.0  which I linked to earlier here.