It works when the free tier is usable, but highly limited. Then it effectively becomes a free trial, albeit with no time restriction.
For example, if Evernote had limited the free tier to 99 notes and syncing with 2 devices. That’s usable enough for a user to get a feel for whether they like it or not, but without an expectation that the free tier could support all their needs for note generation and storage.
The problem comes when the free tier is so restraint-free that people begin to use it as a daily driver without ever expecting to upgrade to a paid tier. At that point, the company has boxed themselves into a situation with users who generate costs but no corresponding revenues. Trying to convert _those_ users into paying customers is difficult or impossible, in my opinion.
For example, if Evernote had limited the free tier to 99 notes and syncing with 2 devices. That’s usable enough for a user to get a feel for whether they like it or not, but without an expectation that the free tier could support all their needs for note generation and storage.
The problem comes when the free tier is so restraint-free that people begin to use it as a daily driver without ever expecting to upgrade to a paid tier. At that point, the company has boxed themselves into a situation with users who generate costs but no corresponding revenues. Trying to convert _those_ users into paying customers is difficult or impossible, in my opinion.