Freemium Model

A business model that creates value by facilitating exchanges between two or more interdependent user groups — typically producers and consumers — through a digital platform. Platform businesses generate powerful network effects and intangible assets including user data, algorithmic matching capabilities, and brand trust.

A type of neural network trained on vast corpora of text data, capable of generating human-like text, answering questions, summarising documents, and performing reasoning tasks. Large language models such as GPT and Claude represent significant R&D investment and are reshaping knowledge work, customer service, and content production across industries.

A dividend discount model that values a perpetual stream of cash flows growing at a constant rate, calculated as the next period's cash flow divided by the difference between the discount rate and the growth rate. The Gordon growth model is widely used to estimate terminal value in discounted cash flow analyses and requires that the assumed growth rate remains below the discount rate.

A business strategy that minimises investment in physical assets and instead relies heavily on intangible assets such as software, brand, data, and intellectual property to generate revenue. Asset-light companies typically exhibit higher scalability and return on capital but can be harder to value using traditional balance-sheet methods.

A mathematical model trained on data to identify patterns and make predictions without being explicitly programmed for each task. Machine learning models underpin many AI-driven business applications, from demand forecasting to fraud detection, and their development costs are increasingly recognised as intangible assets under IAS 38 when they meet the identifiability and future economic benefit criteria.

The degradation in a machine learning model's predictive accuracy over time as the statistical properties of the input data diverge from the training data distribution. Model drift requires ongoing monitoring and periodic retraining to maintain performance, and is a key operational risk in production AI systems.

A go-to-market strategy where the product itself serves as the primary driver of customer acquisition, conversion, and expansion, rather than traditional sales-led approaches. PLG companies offer free trials, freemium tiers, or self-service onboarding that allows users to experience value before engaging with sales teams.

A software distribution model in which applications are hosted by a service provider and made available to customers over the internet on a subscription basis. SaaS businesses are characterised by recurring revenue, high gross margins, and significant intangible asset value in software and customer relationships.