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One-time fees are not very sustainable. Unless the model included essentially building an endowment the first ten years and then funding the business off of int

by tootie 4y ago

One-time fees are not very sustainable. Unless the model included essentially building an endowment the first ten years and then funding the business off of interest.

nebqr 4y ago
The SA forums have been going since 1999.
pclmulqdq 4y ago
Lots of devices attached to ongoing services today are sold for a one-time fee. For most of their existence, Microsoft and Adobe had very sustainable businesses based on one-time fees. It is a fine model. Software companies today are addicted to "recurring revenue" (thinking that is the only way to get sustainable cash flow), but a lot of people will pay you $20 once who would never pay you $1/month, and there will always be new people using popular products. One-time fees are a perfectly fine model for a business, even if it is unfashionable currently.
- tootie 4y ago
  That was for desktop software. The era of buy it, download it and it's yours forever. Not an ongoing service.
  - fragile_frogs 4y ago
    Yeah, you would have to raise the one-time payment constantly in order to keep up with your own recurring costs, the more users you have the greater your costs will be.
    - pclmulqdq 4y ago
      You can also charge people their net present LTV upfront. For most forums, that's something like $10 worth of ads, which is why several popular forums worked well with a one-time $10 "pro" fee. You don't need recurring revenue from people to get their entire LTV, and you don't need an endowment to make that model sustainable. You need to make them pay you in whatever form maximizes your net present value (NPV). Twitter, Facebook, and Google have used ads to collect revenue from their users in the past. SaaS apps and services today use recurring subscriptions, which is nice because it lets you match up your inflows to your outflows. Old desktop software, which had high recurring costs too, used single payments (although they also charged for updates). Modern desktop software tends to use subscription fees. Companies need to make their revenue models match what customers expect in order to get payment. That means that you should be selling your SaaS as a subscription or a metered API even if you (hypothetically) do not have recurring costs. It also means that Twitter might have to stay with a $0/month fee and collect its revenue in the form of ads and "direct payments for services." For Twitter, "influencers" might pay as much as $1000 for a "verified influencer" label on their profile despite that many of them are upset at $20/month, particularly if you make it annoying for them (so they feel that they are actually spending their money on getting "verified" and the verification will be hard to fake). Maybe you can get $100/year as a "renewal fee" on those labels, too. If you offered the rest of us a $50 "not a bot" green checkmark that takes a few custom photos and an ID, you will probably get plenty of those too. It's all psychology. Fixed fees and recurring fees can have the same NPV. The game is maximizing that NPV.
- stackbutterflow 4y ago
  They were releasing new version every other year. You cannot sell a new version of a website. > and there will always be new people using popular products. If you succeed in being the go-to platform for every new generation you might be able to coast on that. But the last 20 years have shown that each generation gets its own new social network.
dahart 4y ago
Actuarial science might have a thing or two to say about that. All you need to do is make sure the average amount people pay is greater than the average cost for the life of an account. Before the recent explosion in subscription pricing for everything under the sun, we’d been selling software on one-time costs for fifty years. Subscriptions certainly are attractive and easier for businesses, probably easier to sell with freemium models, but they do have downsides like cancellations and not much money up front (may take longer to recoup investments). > Unless the model included essentially building an endowment the first ten years and then funding the business off interest. Ten dollars is surely much greater than the server costs for a single user for a month, or a year. That one-time cost may well be designed to be an endowment of sorts. Plus the avatar changing fees are probably, on average, not one-time fees.
- tootie 4y ago
  I've gotten wildly differing responses from saying that New Twitter should just be a non-profit. Have a mission for public good, disclose financials, earn sufficient revenue to operate and pay employees. Wikipedia does it and their biggest drama is that they get way more donations than they even need. They also seem to manage moderating gobs of content with relatively little public drama.

by tootie 4y ago

One-time fees are not very sustainable. Unless the model included essentially building an endowment the first ten years and then funding the business off of interest.

nebqr 4y ago

The SA forums have been going since 1999.

pclmulqdq 4y ago

Lots of devices attached to ongoing services today are sold for a one-time fee. For most of their existence, Microsoft and Adobe had very sustainable businesses based on one-time fees. It is a fine model. Software companies today are addicted to "recurring revenue" (thinking that is the only way to get sustainable cash flow), but a lot of people will pay you $20 once who would never pay you $1/month, and there will always be new people using popular products. One-time fees are a perfectly fine model for a business, even if it is unfashionable currently.

tootie 4y ago
That was for desktop software. The era of buy it, download it and it's yours forever. Not an ongoing service.
- fragile_frogs 4y ago
  Yeah, you would have to raise the one-time payment constantly in order to keep up with your own recurring costs, the more users you have the greater your costs will be.
  - pclmulqdq 4y ago
    You can also charge people their net present LTV upfront. For most forums, that's something like $10 worth of ads, which is why several popular forums worked well with a one-time $10 "pro" fee. You don't need recurring revenue from people to get their entire LTV, and you don't need an endowment to make that model sustainable. You need to make them pay you in whatever form maximizes your net present value (NPV). Twitter, Facebook, and Google have used ads to collect revenue from their users in the past. SaaS apps and services today use recurring subscriptions, which is nice because it lets you match up your inflows to your outflows. Old desktop software, which had high recurring costs too, used single payments (although they also charged for updates). Modern desktop software tends to use subscription fees. Companies need to make their revenue models match what customers expect in order to get payment. That means that you should be selling your SaaS as a subscription or a metered API even if you (hypothetically) do not have recurring costs. It also means that Twitter might have to stay with a $0/month fee and collect its revenue in the form of ads and "direct payments for services." For Twitter, "influencers" might pay as much as $1000 for a "verified influencer" label on their profile despite that many of them are upset at $20/month, particularly if you make it annoying for them (so they feel that they are actually spending their money on getting "verified" and the verification will be hard to fake). Maybe you can get $100/year as a "renewal fee" on those labels, too. If you offered the rest of us a $50 "not a bot" green checkmark that takes a few custom photos and an ID, you will probably get plenty of those too. It's all psychology. Fixed fees and recurring fees can have the same NPV. The game is maximizing that NPV.
stackbutterflow 4y ago
They were releasing new version every other year. You cannot sell a new version of a website. > and there will always be new people using popular products. If you succeed in being the go-to platform for every new generation you might be able to coast on that. But the last 20 years have shown that each generation gets its own new social network.

dahart 4y ago

Actuarial science might have a thing or two to say about that. All you need to do is make sure the average amount people pay is greater than the average cost for the life of an account. Before the recent explosion in subscription pricing for everything under the sun, we’d been selling software on one-time costs for fifty years. Subscriptions certainly are attractive and easier for businesses, probably easier to sell with freemium models, but they do have downsides like cancellations and not much money up front (may take longer to recoup investments). > Unless the model included essentially building an endowment the first ten years and then funding the business off interest. Ten dollars is surely much greater than the server costs for a single user for a month, or a year. That one-time cost may well be designed to be an endowment of sorts. Plus the avatar changing fees are probably, on average, not one-time fees.

tootie 4y ago
I've gotten wildly differing responses from saying that New Twitter should just be a non-profit. Have a mission for public good, disclose financials, earn sufficient revenue to operate and pay employees. Wikipedia does it and their biggest drama is that they get way more donations than they even need. They also seem to manage moderating gobs of content with relatively little public drama.