Not to be that guy but... You just read an article from a very experienced indie developer with a large following that suggests avoiding multiplayer games without "large sums of money"... and you're a smaller indie with no clout who wants to know how to do it with a "rather small budget"? It sounds like you already know the answer to your question.
Well, yes and no. I won't cancel the project at this point in development, because of one article I've read. And although I believe what he has written I want to try it for myself.
Make it free with IAPs?
That's an option, of course.
You should probably listen to oldblood. I would focus on making the game work as single player first, so build some AI into it. If people like it then try to build up to multi-player once you have a following.
From a general look, even bigger studios have trouble to keep their multiplayer community alive. So a solid single player with a multiplayer option attached to it is a safer bet, if possible.
That's also an option, but we've focused on multiplayer all our dev time until now. To build a decent singleplayer now would require a lot of additional work we haven't planned in and would delay the project further. That doesn't mean we categorically object to this idea.. It just means it's a tough decision. But we will probably try different methods.
If you can convince enough people on Kickstarter it will provide not only proof of concept, but the initial seed population you need... and of course, money.
To get a Kickstarter campaign going is no easy encounter in Austria, because Kickstarter doesn't accept projects from here. We would have to start a company in a country were we could start a campaign. We are thinking about launching a campaign on IndieGoGo though.
Maintaining a low cost of entry is critical, and this is the actual reason why the freemium model works. Create a very fun multiplayer game with a very low entry cost, get thousands of players, and offer people cosmetic products.
Also, like others have already said, create a way for users to have at least some fun on their own while they wait to find a multiplayer match.
Yeah.. the low entry cost is an interesting point. It interfere's with the price quality illusion probably. I have ambivalent feelings towards going F2P. In the minds of the players the game loses its value I think.