👋 Hi, it’s Kyle Poyar and welcome to Growth Unhinged, my weekly newsletter exploring the hidden playbooks behind the fastest-growing startups.
ICYMI: The State of AI for GTM report
AI reshaped how products are built, priced, and sold. Self-serve funnels now include AI-driven onboarding and in-product copilots. Supporting free users has gotten much more expensive as AI token costs have remained high. AI is even changing who signs up for and uses products in the first place, from people to a combination of people and agents.
What hasn’t changed: improving free-to-paid conversion remains one of the highest-leverage ways to grow revenue, without adding headcount or increasing marketing spend.
To understand what good looks like in 2026, I partnered with my friends at ChartMogul and ProductLed to analyze conversion data from 200 B2B software products.
Key stats from the report:
57% of products have a free trial as their primary landing point for new customers, more than twice the rate of freemium (26%).
Relatively few (7%) have a reverse trial.
The most common trial length is 14 days (62% of products).
Among free trial products, 20% require users to provide a credit card upfront.
The median free-to-paid conversion rate across all products is 8%. But very few products actually have an 8% conversion rate.
Free trials convert at slightly higher rates than freemium; however, this difference gets wiped out upon accounting for signup rates.
Free trials that require a credit card see 30% free-to-paid conversion – more than 5x ones that don’t require one.
This is the first report in a two-part series; read part two to learn how to improve free-to-paid conversion.
Who participated in the research
The study was conducted in January 2026 and included 200 software products. A typical respondent is between $1 to $10 million ARR with an average revenue per customer of $50-$249 per month and a year-on-year growth rate between 25-50%.
The survey defined free-to-paid conversion as the percentage of leads or free signups that convert to become a paying customer within six months.
Respondents by annual recurring revenue (ARR):
Less than $1M ARR: 34%
$1-$5M ARR: 29%
$5-$20M ARR: 20%
Greater than $20M ARR: 16%
Respondents by average revenue per customer (in USD):
Less than $50 per month: 21%
$50 to $249 per month: 37%
$250 to $999 per month: 19%
Greater than $1,000 per month: 24%
Respondents by ARR growth rate:
ARR is flat or declining: 14%
5% to 24% growth: 30%
25% to 49% growth: 17%
50% to 99% growth: 15%
100% to 199% growth: 10%
200% growth or faster: 14%
Respondents by product type:
Mostly SaaS: 55%
Hybrid of AI and SaaS: 30%
AI-native: 9%
Other: 6%
You can use ChartMogul to get a complete picture of how free trials and free users behave, when they convert, and how they impact your recurring revenue. They offer a 14-day free trial and paid subscribers can save $50 per month through Unhinged Perks.
Free trials are twice as popular as freemium
Free trials are the overwhelmingly most popular entry point for the products in the research. 57% have a free trial, more than twice the rate of freemium (26%).
Just 7% have a reverse trial, i.e. temporary access to premium features while the user is on a free plan. Another 7% have an interactive demo experience where users get a hands-on product experience with dummy data. The rest (4%) have a paid trial, i.e. time-limited access with a special introductory price.
SaaS products seem particularly fond of free trials. 61% of SaaS products have a free trial as their primary landing point for new customers. This is higher than products that are a hybrid of SaaS and AI (51%) or AI-native (43%).
Among free trial products, 20% require users to provide a credit card upfront and the remaining 80% do not.
The most common trial length is 14 days (62% of products) followed by 7 days (14%) or 30 days (14%). These aren’t purely self-serve experiences; 80% of free trial products have human touchpoints when an enterprise user enters the trial.
Among freemium products, 38% let users try the product before creating an account like you might’ve seen with vibecoding tools (ex: Lovable, Replit) or LLMs (ex: ChatGPT, Perplexity). 70% of freemium products have human touchpoints when an enterprise user self-serves.
The myth of normal free-to-paid conversion
The free-to-paid conversion rates across these products vary substantially. I’m not talking about a percentage point or two. There’s a 10x conversion difference between the top 20% of self-serve products and the bottom 20%!
The median free-to-paid conversion rate across all products was 8%. But very few products actually have an 8% conversion rate, as you can see in the chart.
Here’s what the data shows for free trial products:
One-in-five (20%) products see a free-to-paid conversion rate below 2.5%.
About a third (30%) see a free-to-paid conversion rate between 2.5% and 7.5%.
Roughly one-in-four (23%) see a conversion rate higher than 25%.
By comparison, here’s what the data shows for freemium products:
One-in-four (25%) products see a free-to-paid conversion rate below 2.5%.
About a third (29%) see a free-to-paid conversion rate between 2.5% and 7.5%, similar to free trial products.
Another one-in-four (25%) see a free-to-paid conversion rate between 10% and 15%.
It’s rare to see free-to-paid conversion above 15%, let alone 25%.