Not necessarily. I offer a free tier because I want to, as a service to hobbyists and makers. It is not intended to be temporary. It's also not an upselling tool: features are distinctly different and there is no paid plan that would make sense for hobbyists.
Not every business is a VC-funded growth-above-all meat grinder.
But there is still a profit incentive. Users who have been running a hobby or community on your SaaS today might be creating a startup or advising a corporate tomorrow.
So while the community might never need your paid product, the very same users might create separate, paying accounts.
Not every business is a VC-funded growth-above-all meat grinder.