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Dear startups: I hate subscription services (2021)

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Re: Dear startups: I hate subscription services (2021)

#121

Post by bluepizza »

xg15 wrote: post #10
boffinism wrote: post #4

Dear customers: we know. But our businesses are viable as subscription services, and not as one-off or ad-hoc puchase models. We know because we tried them. So we're catering to the people who are OK with buying a subscription because there are enough of them. Sorry if that doesn't suit you.

> But our businesses are viable as subscription services, and not as one-off or ad-hoc puchase models. Doesn't explain businesses that had been per-purchase for a long time and are now still switching to subscriptions though. (E.g. photoshop, jetbrains...)

Photoshop was way too expensive. Adobe’s subscription system saw most of their illegal users drop their cracked versions and move to a subscription.

Re: Dear startups: I hate subscription services (2021)

#122

Post by jwr »

boffinism wrote: post #4

Dear customers: we know. But our businesses are viable as subscription services, and not as one-off or ad-hoc puchase models. We know because we tried them. So we're catering to the people who are OK with buying a subscription because there are enough of them. Sorry if that doesn't suit you.

That sounds like a cynical take, but is actually close to the truth. The usual take is that businesses are "greedy" and subscription models are "lucrative". The word I'd rather use is "sustainable". Maintaining software (any software) is an ongoing process, not a one-time effort. It needs to be paid for on an ongoing basis. Even a tiny phone app needs regular maintenance work just to stay current with OS and tools development. It is unrealistic to expect to be able to pay once and use an app "forever".

Source: I run a SaaS business.

A related observation: we have unrealistic expectations of how cheap software should be. Software development is very expensive and has been becoming more expensive over the years, as system complexity grows and the pace of OS/platform updates increases. There are very few "mainstream" apps that can take advantage of economies of scale, and yet we still expect to be able to use hundreds of apps for cheap one-time payments. That leads to unsustainable business models and app churn.

Myself, I'd rather have a small number of expensive (subscription-based) good applications that are sustainably developed and maintained over many years.

Re: Dear startups: I hate subscription services (2021)

#123

Post by jagged-chisel »

pakitan wrote: post #98
ChildOfChaos wrote: post #50

Earlier quoted context omitted.

Agreed, it's usually nothing to do with the fact they weren't viable before, it's just that subscriptions are more profitable. With cost of living crisis and such, soon enough though it won't be able to last. People are already cancelling one of the biggest main subscriptions they have (netflix). Also I fear this is really changing society. Many years ago, as you got older you got into a better place in life because…

> Also I fear this is really changing society. Many years ago, as you got older you got into a better place in life because you had saved up and bought all the stuff you need and slowly aqquired good equipment and everything you need. Your grandfather's wheelbarrow didn't need replacing every 2 years but he also didn't have Netflix. You can easily have your grandfather's lifestyle by buying a future-proof wheelbarrow…

Are future-proof wheelbarrows being made now? If the trend of lower quality power tools has reached wheelbarrows, you probably still have to replace one every few years.

Re: Dear startups: I hate subscription services (2021)

#124

Post by ben174 »

neximo64 wrote: post #93
xg15 wrote: post #26

Earlier quoted context omitted.

How about good old "pay for it once, then own it"?

If there's no support and no updates. Can't work with web apps unless there's a version restriction/time limit.

This. The software would get abandoned once they've cashed in on the bulk of people buying it. They can trickle in more sales over time, but that's not going to amount to nearly as much as the initial payload, and therefore the motivation to continue developing dwindles.

Re: Dear startups: I hate subscription services (2021)

#125

Post by chunkyguy »

xg15 wrote: post #26
mattjenner wrote: post #21

Dear innovative people: think of a better model. 1. Free = problematic with the lack of money 2. Freemium = looks good if the balance is right 3. Ads = Mostly works but the model is flawed and skewed 4. Subscription = Love/Hate currently trendy but too relied on 5. Pay-what-you-can = Fans provide the service for everyone 6. Premium only = Only what it's worth, when it's worth 7. Enterprise = S'ok because my company/o…

How about good old "pay for it once, then own it"?

And who pays for the maintenance and bug fixes?

Softwares can't sell like hardwares. When you buy a toaster for example, after the warranty expires you pay for every time you take it out for repairing. With softwares customers expect a life time of warranty, bug fixes and improvements.

Re: Dear startups: I hate subscription services (2021)

#126

Post by codq »

xg15 wrote: post #78
Semaphor wrote: post #61

Earlier quoted context omitted.

You’ll lose it now, but under the old model you would never have had those features and improvements. While it took a community outcry, I think Jetbrains now has the best subscription model, that’s a positive for both users and the company.

I still think there is a bit of a dark pattern in it, because when you cancel, you have to give up features which you've already been using for a year and likely integrated into your workflow. In the worst case, there were some breaking format changes and your project files are not compatible with the version you'll be rolled back to. They could just let me keep the version I already have and block me from future upd…

My favorite pricing model is by the note-taking app Agenda[0].

It's called a Cash Cow[1] model—you make a one-time purchase, which allows you updates for the next year. At the end of the year, you can either purchase another year of updates, or enjoy the full-featured app you currently have.

The thing keeping me from subscriptions is the fact that if you decide you no longer want to pay, you no longer get access. This encourages devs to continue to ship great updates, while not gimping your software at the end of the payment term.

[0] https://agenda.com/

[1] https://drewmccormack.medium.com/a-cash-cow-is-on-the-agenda...

Re: Dear startups: I hate subscription services (2021)

#128

Post by Zak »

jwr wrote: post #122
boffinism wrote: post #4

Dear customers: we know. But our businesses are viable as subscription services, and not as one-off or ad-hoc puchase models. We know because we tried them. So we're catering to the people who are OK with buying a subscription because there are enough of them. Sorry if that doesn't suit you.

That sounds like a cynical take, but is actually close to the truth. The usual take is that businesses are "greedy" and subscription models are "lucrative". The word I'd rather use is "sustainable". Maintaining software (any software) is an ongoing process, not a one-time effort. It needs to be paid for on an ongoing basis. Even a tiny phone app needs regular maintenance work just to stay current with OS and tools de…

> The usual take is that businesses are "greedy" and subscription models are "lucrative".

"Greedy" as a criticism of a for-profit business makes about as much sense as "predatory" does as a criticism of a cat.

Re: Dear startups: I hate subscription services (2021)

#129

Post by parkingrift »

You can throw absolutely all of the blame on MBA and finance culture. Businesses routinely sell for 7-20x annual recurring revenue. However, non-recurring revenue is worth maybe 2-3x.

It’s the same story with raising funds. If you need capital you can raise substantially more for substantially less if you have recurring revenue.

It would be more valuable for a business owner to take a $1M non-recurring revenue business and convert it into a $500k recurring revenue business, stabilize, and then sell.

If you think that’s asinine… well, you’re right. Something is deeply wrong with MBA and finance culture in America. We have truly lost our minds when it comes to valuations.

Re: Dear startups: I hate subscription services (2021)

#130

Post by gordaco »

yourMadness wrote: post #88
gordaco wrote: post #67

I'm a very, very firm believer on not paying for "subscription" to software. New content, I can understand (I spend about 40€ monthly on several Patreons, mostly comic artists; and I have a couple news subscriptions as well), although I still hate music/tv subscriptions and I don't want Netflix, Spotify or whatever. But for software, no matter how useful it is , I just refuse to choose between an unbounded price and…

Would you use a service that converts subscriptions into one time purchases at 20x the yearly subscription cost?

I'm not sure that twenty times the yearly price would look like a reasonable price, but if it's software I actually want, I might agree. I would weigh that price against the functionality of the software, ignoring whether there is a subscription model. As I said, I'm not beyond paying a three-digit sum for software I like (and Mathematica is the first example that came to mind, but not the only one).
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