More and more startups and established businesses are switching their software products to a subscription model. From a business standpoint this is a good thing — it’s lucrative, infinitely scalable and all-round more profitable than a single purchase. But it might kill your business in a few years. Let me tell you why.
As mentioned, subscription models are very profitable. But as a business owner and a human, you have to balance your own benefits and those of the bigger whole.
Take this scenario:
It’s the year 2025. You’re a person with a middle class income, and after all your food, taxes and healthcare costs, you’re left with X amount of money to live. You’re subscribed to Netflix, and listen to music with Spotify. You’re alright with spending a couple of bucks a month for this convenience.
That one app you purchased a few years back switches to a subscription model. Alright. No big deal. Then your navigation app starts charging monthly. You like the app, so you agree. Your email client starts charging a monthly subscription. Well, a person’s gotta email, right? So you agree. Before you know it, you’re spending hundreds of dollars a month on apps you don’t even use daily. Subscription and usage based models are just fine on a B2B basis, but B2C is a different horse.[work in progress]