This morning had an issue after setting up a new user in a clients Office 365 account. When the user tried to log in for the first time they got the following error message.

You don’t have a license to use Office 365 with the user ID assigned to you by your work or school. Ask your admin to assign one to you. If you’re an admin, you can assign one to your account.

I found this link that quickly help me solve the issue. Basically when I set the account up I didn’t select the radio button to use their account.

http://community.office365.com/en-us/f/148/t/241285.aspx

I hope this helps someone else.