4 ms·

SaaS model is applicable in some use cases. The VC like it, because they can give the investors comfortable idea of progressive growth and quick ROI. But I am

by nbzso 4y ago

SaaS model is applicable in some use cases. The VC like it, because they can give the investors comfortable idea of progressive growth and quick ROI. But I am patiently waiting to see what will be the consumer reaction when everything becomes compartmentalized and monetized to hell. Like the great ideas of geniuses in BMW headquarters:) https://www.thedrive.com/news/bmw-is-charging-a-subscription-fee-for-heated-seats-again https://www.thedrive.com/news/bmw-is-charging-a-subscription... https://www.wired.com/story/bmw-heated-seats-as-a-service-model-has-drivers-seeking-hacks/ https://www.wired.com/story/bmw-heated-seats-as-a-service-mo...

badtension 4y ago
Making a subscription service out of physical products (that are there anyway) is really too crazy to wrap my head around. Why not make us pay monthly for everything? Trunk, headlights, the horn, blinkers, blinker fluid cap opener and so on. Oh wait, that's just car rental! Let's just abolish all private property and pay subscription for living, like a reverse UBI.
- pixl97 4y ago
  VC's: keep talking dirty like that and I'll give you another billion to implement this as a service.
api 4y ago
It’s not even growth or ROI. It’s that reliably recurring revenue is valued at a much higher multiple than non recurring revenue. VCs and other investors including public markets would rather see $1M ARR recurring through subscriptions with low churn than a single year with $10M revenue and no subscriptions. Even multiple years of growth in non recurring revenue will often be valued lower than less growth in subscription revenue. This is why SaaS type models have taken over and why every other business is trying to desperately shoehorn in some kind of subscription revenue. The latter gives us car companies with subscription cloud unlock services, etc.
woodpanel 4y ago
BMWs test-balloon gets bad rep, but the PR kerfuffle just shows how much we're influenced by marketing, considering Tesla's offering of selling you a cheaper car that will be permanently disabled from receiving certain software enabled features and no such outcry happening at all. To play devils advocate: - it streamlines production massively - while still allowing the most affordable version to be bought - but improves product options on the secondary car market Im no fan of BMW's subscription model, but when you're leasing a car, it's effectively the same. Edit: I'd rather have the option to opt out of this pricing scheme even if it would coust me more upfront
- dangus 4y ago
  I had the same reaction. I went as far as calculating it. If you’re a leasee, the heated seat subscription saves you money over your 3 years of ownership. BMW being a luxury brand, a large chunk of owners are going to lease. Plus, BMW had an option to opt-out and buy lifetime.
  - charcircuit 4y ago
    When calculating it did you count hot months? I imagine in the majority of months having seat warmers is useless.
    - dangus 4y ago
      I did count the hot months, which would make the breakeven basically the length of your lease (well, I think for the lease I just compared the 3 year subscription which is slightly discounted) – but yes, if you figure that the person will unsubscribe outside of the 3 coldest winter months it's like a 10 year breakeven IIRC. I don't know many BMW owners that keep their cars for 10 years. To their mild credit BMW is at least charging what amounts to a discount for the subscription for their typical buyer, as long as they stay on top of whether they're subscribed or not. I guess you could say it's annoying to have to subscribe and unsubscribe, and it would make a lot more sense if the subscription guaranteed that the hardware was repaired for free. Still, heated seats rarely break in modern cars from my experience.

by nbzso 4y ago

badtension 4y ago

Making a subscription service out of physical products (that are there anyway) is really too crazy to wrap my head around. Why not make us pay monthly for everything? Trunk, headlights, the horn, blinkers, blinker fluid cap opener and so on. Oh wait, that's just car rental! Let's just abolish all private property and pay subscription for living, like a reverse UBI.

pixl97 4y ago
VC's: keep talking dirty like that and I'll give you another billion to implement this as a service.

api 4y ago

It’s not even growth or ROI. It’s that reliably recurring revenue is valued at a much higher multiple than non recurring revenue. VCs and other investors including public markets would rather see $1M ARR recurring through subscriptions with low churn than a single year with $10M revenue and no subscriptions. Even multiple years of growth in non recurring revenue will often be valued lower than less growth in subscription revenue. This is why SaaS type models have taken over and why every other business is trying to desperately shoehorn in some kind of subscription revenue. The latter gives us car companies with subscription cloud unlock services, etc.

woodpanel 4y ago

BMWs test-balloon gets bad rep, but the PR kerfuffle just shows how much we're influenced by marketing, considering Tesla's offering of selling you a cheaper car that will be permanently disabled from receiving certain software enabled features and no such outcry happening at all. To play devils advocate: - it streamlines production massively - while still allowing the most affordable version to be bought - but improves product options on the secondary car market Im no fan of BMW's subscription model, but when you're leasing a car, it's effectively the same. Edit: I'd rather have the option to opt out of this pricing scheme even if it would coust me more upfront

dangus 4y ago
I had the same reaction. I went as far as calculating it. If you’re a leasee, the heated seat subscription saves you money over your 3 years of ownership. BMW being a luxury brand, a large chunk of owners are going to lease. Plus, BMW had an option to opt-out and buy lifetime.
- charcircuit 4y ago
  When calculating it did you count hot months? I imagine in the majority of months having seat warmers is useless.
  - dangus 4y ago
    I did count the hot months, which would make the breakeven basically the length of your lease (well, I think for the lease I just compared the 3 year subscription which is slightly discounted) – but yes, if you figure that the person will unsubscribe outside of the 3 coldest winter months it's like a 10 year breakeven IIRC. I don't know many BMW owners that keep their cars for 10 years. To their mild credit BMW is at least charging what amounts to a discount for the subscription for their typical buyer, as long as they stay on top of whether they're subscribed or not. I guess you could say it's annoying to have to subscribe and unsubscribe, and it would make a lot more sense if the subscription guaranteed that the hardware was repaired for free. Still, heated seats rarely break in modern cars from my experience.