Giving away your product or service can help grow your user base, however, you must be cautious in how you change your pricing structure after you have people relying on you.
If you’re even thinking about using “free” to attract customers, you need to read Chris Anderson’s book Free.
Additionally, you need to keep in mind that once something is free, people will expect it to be free forever. When you change the pricing scheme, your “customers” will be mad.
For a couple of years, I had used an online service to make sure my websites were up and running. This service was free and served my needs.
One day, without warning, I got an email that they were changing the free plan to only allow three websites to be monitored.
I had twelve sites monitored by this service.
They said in the email that if I had more than three, then only three would be monitored.
Unfortunately, the website didn’t clearly show which three were still being monitored.
Instead of paying, which I assume was their plan, I jumped to another service which is still free.
This alternative service, mon.itor.us, makes money by showing ads and having a premium service to support their free accounts. Apparently, they had read Anderson’s Free where as the other company had not.
Remember that your current user experience is setting expectations with your users and customers of how things are and should be.
If you make changes and break that expectation unexpectedly, you’ll anger many and lose those that could very well have been nurtured and converted to long-term, paying customers.