Is there anybody here who is successfully running a business that is not based on a subscription revenue model?
I have a nice side project (a macOS app) that uses a one-time fee. But very often (while listening to some podcasts about bootstrapped products) it feels like it's either subscription-based or nothing. Is there no point in having a one-time fee product? Is that correct? Am I living in a SaaS bubble?
nicbou11 hours ago
I earn affiliate income on https://allaboutberlin.com. It allows me to help far more people by keeping everything free. It's been my main source of income for a few years now.
AI is changing the game - it halved my traffic - but so far it's still survivable. I intend to keep going until it's no longer tenable.
fandorinop31 minutes ago
Cool! Did AI halve your income as well? Or did it just affect the traffic (low quality traffic)?
nicbou2 minutes ago
I had to make up for it. This year was a huge diversion from my usual work as I scrambled to monetise properly. I spent a lot more time on topics that bring revenue, instead of purely optimising for usefulness as in the past.
It had a good outcome though: I made a series of really useful upgrades to my health insurance advice. I am happy that the solution was to make a better product, not to squeeze my audience more.
matt_s3 days ago
Use it as a way to differentiate yourself. One methodology I've seen used with installed apps is major upgrades require a financial renewal but those can be spaced out every couple years. I love it when I find an iOS app that is paid, without ads, without in-app purchases.
You just need to plan how that business model works and know that you won't have recurring revenue. Maybe that means you build companion apps, offer an optional subscription tier (often its cloud storage/device sharing based) or something like that.
I've thought of doing a subscription like service but its use case is more of a once-in-a-while style so an option there would be pay-per use instead of a subscription.
skwee3573 days ago
Define successful.
I run a SaaS that relies on one time payment. The income currently covers all the expenses, and leaves me some nice pocket money.
Is this model for everyone? No. The unique proposition of my service is actually the one time payment aspect. Does everything should be subscription? No. I avoid subscriptions as much as possible, unless there is a cost involved in running the service.
So YMMV. I wouldn’t pay a subscription for a MacOS app, unless there is an ongoing operational cost for the developer.
Feel free to email me (profile -> website) if you want to chat.
fandorinop2 days ago
Awesome, thanks, I will reach out!
keiferski3 days ago
The primary alternative to monthly subscription plans is a usage-based pricing plan. In other words, your customers are still paying more than once, but when is based on how much they use it, rather than per month/year.
You could also copy many WordPress plugins, which charge a fee for the first year (which includes support and updates) but then expires afterward. So they can continue using the plugin but won’t get any new updates/support.
herbst3 days ago
This model is how you get me as a customer. Monthly is unattractive, usage based feels fair even if more expensive
[deleted]3 days agocollapsed
herbst3 days ago
I dislike monthly subscriptions myself, and always look for alternatives which I then happily spend my money on.
However the business is as it is
For software I really like the patreon model (like in some game communities) monthly subscription you could cancel after downloading and if you want updates you just get another month. Big portion will just pay monthly while they wait anyway. Best for all worlds.
Otherwise I would maybe recommend a yearly price instead of monthly. Especially if the monthly would be something small anyway. Easy to forget so most people will at least pay 2 years and you save a lot in transaction costs.
gethly3 days ago
On the contrary. Subscription-based pricing model is dying, and fast. People are tired of it. Just look up articles about how SaaS are slowly disappearing and how entrepreneurs should avoid creating SaaS if possible. People usually prefer one-time payments over monthly payments. There are exceptions, usually when the program/service is very valuable and expensive, it makes more sense to just pay for what you use, but in general single payment will always win. Also it depends whether we're talking local or remote service as remote service has inherent cost and having a single payment is not compatible with it.
Additionally, there is a distinction between single and ongoing payment in the context of usability. Specifically, it makes little sense to sell a calculator program via a subscription fee but you also reach a limit of the possible customer base. Just like mobile applications. With subscription, you can keep milking the same customer for money indefinitely, but in such case you have to keep providing some services that is worth the payment.
keiferski3 days ago
Pretty much every major software company has monthly plans. Even apps are becoming monthly, when they were once single payment.
Where are you seeing single payments become prominent in software?
fandorinop2 days ago
That's my feeling as well. I wonder who says that SAAS is dying.
raw_anon_1111a day ago
What you’re saying doesn’t jibe with reality that subscriptions are dying. I wouldn’t spend time creating anything that was a one time use application if my interest was monetization and not just to scratch an itch.
csomar3 days ago
> Is there no point in having a one-time fee product?
You can have one-time licenses but updates require another license (ie: discounted). It is the same model of SaaS but with a different payment plan.
Unlimited/lifetime licenses are a way to either deliver a really bad product or create an unsustainable company.
fandorinop3 days ago
Well I guess this is the way forward for me.
bruce5113 hours ago
In the beginning we sold a product for a one-time fee. Every couple of years we'd release a (paid for) upgrade. The market was young, new features were obvious.
The company was funded by "new sales". Development, support, admin etc was all funded by sales.
As our customers grew, so our costs grew. Support goes up, so fine, we'll offer support contracts. But users typically don't sign up for these (but call support anyway and get pissed if we blow them off, or bill them.)
We make "updates" and sell those. But to do that we must "add features" (customers expect all bug fixes to be free forever). Adding features which offer true value becomes harder. Upgrade sales drop off, but now we have lots of different versions in the field.
Obviously sales plateaus at some point. The list of people receiving value goes up, the potential market gets smaller.
In short, the source of revenue and the receivers of value are disconnected. This is not sustainable. You are one or two bad sales months from closing up shop.
The optimal strategy for this business model is to find the sales peak, terminate all support, and accumulate as much from residual sales as possible.
We switched to a subscription model. Now those receiving value (updates, fixes, support, training, features etc) pay a known amount at a known time. We can budget, they can budget. If sales disappear current development and support can continue. (Aka Covid). Income and expenses are aligned.
We sell to business not consumers. While consumers might not like subscriptions, businesses love them. They allow for much simpler procurement (no sudden support or upgrade bills), assurance of longevity, reduced capital costs upfront.
We can grow headcount based on known income. We can grow sustainably without requiring sales to match.
Subscriptions work because the match income to expenses. Those who receive value pay for it in a sustainable way. It's as simple as that.
ohman8763 days ago
I have never built a smartphone app myself but I know one thing, if the app is useful I'll buy it again and again to get it on my new device.
Another thought, maybe your app has the potential to be extended, you can make extensions available as addons for a fee.
JohnFen3 days ago
Yes, lots. I personally refuse to use subscription-based software, but have no trouble finding software that doesn't use that model.
raw_anon_11113 days ago
What are you going to do when you reach all of your addressable market?
One time payments are fine when you are in a growing market like iOS in 2009. The only long time successful Mac Indy app that I can think of without a subscription is BBedit which has been around since 1990 and made every transition along with Apple.
bob10293 days ago
> What are you going to do when you reach all of your addressable market?
You find a new market and/or build a new product.
The solution to "oops we sold one to everyone we can think of" is to invent new kinds of value, not ways to extort existing paid customers.
raw_anon_11113 days ago
People on HN act like it’s so easy to build a product that can be a sustainable business.
Software especially with Apple and always needs maintenance. Should people expect free updates?
skwee3573 days ago
People on HN act like it’s so easy to reach all the addressable market.
Most software, especially in the world of mobile/desktop apps are usually feature-complete. The problem is that developers keeps redesigning and refactoring them to justify development, rather than focusing on another product or marketing efforts.
Free bug fixes are generally expected. But nobody forbids you from releasing v2 and charging for it again (for example with upgrade discount).
raw_anon_11113 days ago
Is it a “bug” when Apple releases a new OS/phone that either breaks backwards compatibility or does something like release the iPhone 5 and changes the form factor making your app look janky? This was when Apple released frameworks to allow phones of different sizes around 2012?
Or more recently should users expect a free upgrade when Apple deprecated 32 bit apps?
The Mac sees a lot less churn than iOS. But things do happen that cause apps not to work there. The most recent is that Electron was using a private API and all apps that used that version of Electron on Macs broke.
skwee3573 days ago
It's the cost of running a business.
raw_anon_11113 days ago
If no one new is buying your product and you are just supporting one time pay users, why would a developer be incentivized to keep doing updates?
skwee3573 days ago
When you buy a physical product, do you expect the company to stand behind the quality of their product by providing (limited) warranty and/or support, despite the fact that this won't bring the company any new income?
Nobody forbids you from selling your software with an asterisk that says "works on X.Y version of MacOS, future releases will require a new license".
And if no one new is buying your product, I think you need to ask yourself whether you have a sustainable business or a hobby.
JohnFen3 days ago
> Should people expect free updates?
Bug fixes, yes. Other updates, no.
raw_anon_11113 days ago
For how many years?
JohnFen3 days ago
> What are you going to do when you reach all of your addressable market?
Sell upgrades, develop new products, etc.
ApolloRising3 days ago
SuperDuper is another.
quantdev12 days ago
Welp. Now I’m regretting shutting down a similar business - because I felt like single product businesses were a dead end.
Sheesh.