How Linktree Become a $1.3 Billion Company with a Simple Freemium Model?

In today's digital age, building a successful Direct-to-Consumer (DTC) brand requires a strong online presence. A key component of this is a well-crafted landing page that can drive traffic, engage users, and ultimately convert them into customers. Linktree, a simple yet powerful tool, has emerged as a prime example of how a freemium model can be leveraged to build a billion-dollar business.

This is Startup Stoic, a newsletter that assists you to learn better and strategize your startup ideas. Feel free to share it with others.

Linktree was founded in 2016 by brothers Alex and Anthony Zaccaria, alongside their friend Nick Humphreys, in response to a common problem creators faced on platforms like Instagram: the inability to share more than one link. The trio recognized that social media platforms were restricting how people could direct their audiences to various online destinations. Whether it was linking to an online store, a blog, or multiple social profiles, the "one-link limitation" was a bottleneck for creators and brands.

Their solution? A single landing page that could house multiple links, allowing users to consolidate their most important online destinations in one place.

Freemium Model That Works

One of Linktree's core growth strategies was adopting the freemium business model—offering a basic service for free while charging for premium features. This model worked wonders for Linktree's user acquisition. The free version attracted a massive user base, including influencers and small businesses who didn’t want to commit to paid services immediately. As users grew more familiar with the platform, many upgraded to the paid version to unlock advanced analytics, customization options, and integration features.

Scaling to $1.3 Billion: Key Takeaways for Startup Leaders

1. Nail the Product-Market Fit Early- Linktree didn’t start by targeting every possible audience. It focused on creators and influencers, a market that had a specific need for its service. By understanding its core users and delivering a solution to their problems, Linktree built a loyal base that fueled its growth. Start by identifying a specific customer pain point or need and solve that problem better than anyone else. Focus on a niche first, then expand as you perfect your offering.

2. Use Freemium to Fuel Growth- The freemium model allowed Linktree to grow quickly without heavy marketing expenses. By offering significant value for free, it attracted millions of users, many of whom upgraded over time as they required more features. If feasible, consider offering a freemium or trial version of your product or service. This allows customers to experience the value you offer before committing financially, leading to higher lifetime value.

3. Focus on Partnerships and Word-of-mouth- Linktree’s growth was largely organic, driven by creator partnerships and word-of-mouth recommendations. Instead of pouring money into ads early on, it let users spread the word through their own networks. Building relationships with influencers, creators, or even micro-influencers can drive organic growth. Encourage your current customers to become advocates through referral programs or shareable content.

4. Don’t Underestimate User Experience- Linktree kept the user experience front and center, constantly refining its design and adding features that enhanced both functionality and aesthetics. Focus on making your customer experience as smooth as possible. From website navigation to checkout, the fewer hurdles a customer has to jump through, the better.

Linktree's meteoric rise from a simple link-sharing tool to a billion-dollar company offers leaders several valuable lessons. By focusing on user experience, leveraging a freemium model, and building strong partnerships, Linktree turned a simple idea into a vital resource for creators and brands worldwide.

For CEOs, CMOs, and CPOs, the takeaway is clear: simplicity, value, and customer-centric strategies are timeless principles for growth. Whether you’re just starting or looking to scale, adopting these lessons can propel your business toward success.

Recommended Reads:

• Customer Centricity is Your Secret Weapon to Your D2C Abundance

• How to align your D2C brand with evolving times?

• How Can You Reduce Ad Costs and Boost Conversions?