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Dear startups: I hate subscription services (2021)

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

#321

Post by [deleted] »

parkingrift wrote: post #314
dangus wrote: post #301

Earlier quoted context omitted.

The thing you haven’t addressed is why this is asinine. I don’t think it’s asinine! It makes logical sense to me that recurring revenue is more valuable than non-recurring revenue.

I understand the why, and still completely disagree with the base reasoning. I was part of a group that made a $10M acquisition of a software company with consistent $7M in annual sales. We converted that to $4.5M in recurring revenue and sold it for $30 million 3.5 years later. I was on the executive team that flipped the business. And I find the whole thing disturbingly ridiculous. Your examples are pretty divorced…

[deleted]

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

#322

Post by szastamasta »

varispeed wrote: post #246
szastamasta wrote: post #237

I really liked the old way it used to work. You bought a license for software and got only bugfixes and security patches. Every second year there was a new version released with 50-75% upgrade price for current users. I totally understand subscriptions for online services that run on provider servers/storage etc. (like Evernote) or content services where you get access to a vast database of always growing content, th…

> Autodesk Fusion 360 They shoehorn their cloud service and certain operations are done on their servers, which are awfully slow. It seems like they added this to justify a subscription and not to give any benefit to the user.

Yeah, and these services (namely renders of the designs) are still paid outside of main subscription fee. What’s worst is that these cloud services make the app worse. I want to work on a file I have on my computer, not upload it to cloud first so it works slower.

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

#323

Post by Brian_K_White »

skeeter2020 wrote: post #289
Brian_K_White wrote: post #110

Earlier quoted context omitted.

If I sold furniture, the designs and manufacturing processes and materials usage all undergo continuous iteration, yet when I sell you your chair, you don't have to keep paying me forever to keep using it. Yes, you also don't get updates to it. That is actually perfectly fine for countless bits of software. I have 30 year old software, and it still does it's original job just fine, if I happen to be ok with all it's…

If you sold furniture you would also sell a heck of a lot more of it on very low, very long payment plans. Even more extreme with cars, resulting in leases that are essentially long term rentals or "subscriptions"

But RentACenter is only RentACenter, and unlike a lot of on-line services, I don't have to use them to furnish my house.

It's fine for the rental option to exist, the problem is only when no other option exists, and, increasingly, no other option exists.

Please don't waste our time pointing out how this is generalization and alternatives do exist technically for most things. It's obviously not 100% services, but the entire world of software is becoming more and more each day, worse today than yesterday, worse tomorrow than today, a choice between two opposite ends of a spectrum: 0% ownership in the form of services, and 100% ownership in the form of open source. Each of those are fine in various circumstances.

For many things, and increasing, no practical alternative to "RentACenter" software exists because in most cases an individual is not realistically free to do their own thing if they want to sell to customers and buy from vendors and interoperate with family and friends who all take the easy path and use all the major services, or even without interoperation issues the alternative option simply doesn't do the same job or doesn't exist. And the damning thing is that it used to exist, meaning the rental model is not a required aspect to produce the product to do the job.

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

#324

Post by Brian_K_White »

yunohn wrote: post #236
Brian_K_White wrote: post #110

Earlier quoted context omitted.

If I sold furniture, the designs and manufacturing processes and materials usage all undergo continuous iteration, yet when I sell you your chair, you don't have to keep paying me forever to keep using it. Yes, you also don't get updates to it. That is actually perfectly fine for countless bits of software. I have 30 year old software, and it still does it's original job just fine, if I happen to be ok with all it's…

> you don't have to keep paying me forever to keep using it. Your analogy is flawed. Rather, you will never indefinitely get the latest quality chair for free after buying it. Nor if tomorrow plastics are banned, they won't replace your chair with wood or metal for free either. And if the fabric wears, they won't replace it for free either. So, why should software updates be free in a dynamic computing world?

That was covered, as it's obvious.

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

#325

Post by Someone »

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?

Only the provider of that service can provide that, and not even completely.

Third parties promising it would still be at the whim of the original provider. If they shut down the service, what would that third party do to fulfill their promise to you?

What we need is open, documented protocols for internet-connected hardware and escrow for pure internet services, with a guarantee to open source if the original provider shuts down their servers.

The latter will be difficult to enforce. The service provider could, instead of shutting down the service, just raise prices to something above absurd, and then shut down once all customers are gone.

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

#326

Post by TrueSlacker0 »

nickjj wrote: post #233

For technical learning material do you prefer a SAAS model where you pay $10-20 / month for all-in access to short isolated videos in a related subject (potentially ~4 new videos a month) or dropping $50-150 one time for a course that could be anywhere from 3-15 hours long? It's kind of comparing apples to oranges but as someone who has made courses for a while I've always thought about the idea of doing weekly scree…

Why not offer both? Paying $10/m for as long as you like and get all new and old courses. A basic streaming subscription essentially.

But for $100 get lifetime access to only that one purchased course?

Then if the consumer wants more they have the option to spend another $100 for a different course or add the $10/m subscription for other/new content.

I personally would benefit from this immensely in course style learning. I tend to browse lots of content until I find the right info. Then deeply consume the single topic slowly as I teach it to my team. I'm usually stuck paying monthly for something I use for a month then don't use until I begin the training a few months later then dormant again until the next training x months later.

An example.. pay for a Spotify/Netflix/etc monthly subscription but have the ability to purchase a cd/series/movie/book so that if you end your subscription you still have access to the purchased items. Essentially paying a monthly rate to peruse through material then purchasing to deeper dive/repeatedly use an item. The service might even make more money this way.

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

#327

Post by soundnote »

spaceman_2020 wrote: post #180

Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. Like I never understood why most of these basic tools morph into 100+ people companies. A tool like Evernote can be built and maintained by under 20 people. Even at inflated salaries, your yearly burn would be under $10M. This is part of a broader trend of startup overhiring. Like Better.com had…

Yeah. Roam's dev team is what, 3-6 people? Obsidian was 2, now 3. Alloy.dev who make Amplenote have 20. All provide rich content editors and sync backends.

In Evernote's case, though, they did build things like inhouse OCR and a web clipper before the modern age (eg. Amplenote's OCR is just bought from Microsoft)

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

#328

Post by analog31 »

chrisandchris wrote: post #265
spaceman_2020 wrote: post #180

Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. Like I never understood why most of these basic tools morph into 100+ people companies. A tool like Evernote can be built and maintained by under 20 people. Even at inflated salaries, your yearly burn would be under $10M. This is part of a broader trend of startup overhiring. Like Better.com had…

> Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. I think that is not the issue. The issue is having a physical product that is tied to a subscription which could also be a one-time fee. Like a subscription for your dorbell - just why?

Just like what was mentioned about Softbank... your investors will ask if you've jumped onto the latest fad:

* Are you increasing your engineering headcount exponentially?

* Does your product have a subscription model?

It's no different with physical products. I've seen investors ask:

* Does your product have a consumable that you can sell for recurring revenue?

* What is your strategy for becoming a primarily software company?

* When will you be moving to China?

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

#329

Post by packetlost »

spaceman_2020 wrote: post #180

Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. Like I never understood why most of these basic tools morph into 100+ people companies. A tool like Evernote can be built and maintained by under 20 people. Even at inflated salaries, your yearly burn would be under $10M. This is part of a broader trend of startup overhiring. Like Better.com had…

I always figured it was support staff that drove most of that, and I while I think that's still partially correct... it seems to be less so than I previously thought

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

#330

Post by analog31 »

bdcravens wrote: post #307
chrisandchris wrote: post #265

Earlier quoted context omitted.

> Part of the problem is that most of these startups simply have too much overhead to offer their product for free or cheap. I think that is not the issue. The issue is having a physical product that is tied to a subscription which could also be a one-time fee. Like a subscription for your dorbell - just why?

> Like a subscription for your dorbell - just why? Servers (and the staff to maintain them) have an ongoing cost. Human labor is also a pesky subscription.

I simply assume that most of our digital toys are paid for by investors, which I'm perfectly comfortable with. Most of those businesses won't outlast the attention span of their VC's anyway.
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