Instead of charging doctors for its valuable productivity tools, Doximity offers them for free to maximize user engagement. This creates a highly concentrated, valuable audience of physicians, which is then monetized through targeted advertising from pharmaceutical companies, its primary revenue source.

For enterprise customers, Cloudflare offers a "pool of funds" contract. This bundled approach allows a company to draw down a pre-committed spend on any Cloudflare product, removing procurement friction between different internal buyers and encouraging experimentation with their newer platforms.

Cloudflare expanded from protecting websites (a reverse proxy) to protecting corporate employees (a forward proxy). They realized the same global network used to inspect incoming traffic could inspect outgoing traffic, allowing them to enter the massive Zero Trust security market with existing hardware.

In a B2B context, the most effective freemium products don't just offer a limited tool. They act as a diagnostic, giving away value by clearly identifying a painful hole in the user's business—a hole your paid product is designed to fill.

Instead of a traditional marketplace model with a take rate on transactions (bounties), Bug Crowd charges customers a recurring SaaS fee for platform access. The bounty payments flow directly to hackers. This aligns incentives better, as the company profits from providing platform value, not from the volume of vulnerabilities found.

Unlike typical asset-light software companies, Cloudflare's capital-intensive model of owning physical infrastructure is a core strategic advantage. This CapEx builds a global network that is extremely difficult for competitors to replicate, creating a durable competitive moat through owned infrastructure.

Inspired by Google, Cloudflare made an early decision to build its global network using inexpensive, commodity hardware instead of specialized equipment. This software-centric approach allows them to scale their infrastructure rapidly and cost-effectively, a key structural advantage over competitors.

By offering generous free services, Cloudflare aggregates immense web traffic. This scale gives them leverage to negotiate peering agreements with ISPs, drastically lowering their bandwidth costs. This cost advantage, reinvested into the network, creates a powerful, hard-to-replicate competitive moat.

Cloudflare's simple "intercept everything" model wasn't what large enterprise customers of incumbents like Akamai wanted. This classic innovator's dilemma meant legacy players ignored the long-tail market, allowing Cloudflare to build a massive network and eventually move upmarket.