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Ask HN: How are some startups able to offer life-time membership fees?
I've come across a few side projects as well as startups that offer users a pricing scheme which goes something like this: monthly, yearly or a one-off life-time membership fee.
By buying a life-time membership, a user is basically assuming that the company will stick around for a while. I appreciate that some users would get such a membership to support the maker.
But if the company were to fold within a few years, what's their liability?
- madamelic 8y agoI am assuming their only liability is the one they agree to. They very likely have terms that say no refunds if the company goes bust, changes hands or pivots. On the financial side, it is just the lifetime value of a user upfront. Even in a SaaS, most users will churn and stop using it so it is in the businesses best interest to collect all the money upfront.
- tedmiston 8y agoIt's a growth hack. Once they take off, startups usually drop the lifetime tier. I don't think you have any guarantees in general. I emailed one YC startup offering a lifetime tier asking what would happen to the lifetime subscription (before buying it) if they went out of business. Their response was that it would be refunded. In the average case, something like this seems reasonable to me: refund = cost_of_unlimited - years_of_usage * cost_per_year
- superasn 8y agoIANAL but you should not use that word lightly and a lot of marketplaces[1] recommend against doing that because lifetime it's vague and may create liability. [1] https://jvzoo.zendesk.com/hc/en-us/articles/115004072793-Lifetime-Products?mobile_site=true https://jvzoo.zendesk.com/hc/en-us/articles/115004072793-Lif...