5 ms·

> you can probably offer them a price that works for both of you There is no such price, because there is no way to sustainably develop a product without subsc

by jwr 3mo ago

> you can probably offer them a price that works for both of you There is no such price, because there is no way to sustainably develop a product without subscriptions. You can't go to a local bakery and pay $24 for life to get fresh rolls every day. Every one-time price is a gamble, where somebody is betting on something. It's a way to close your eyes and pretend ongoing costs do not exist.

true_religion 3mo ago
We like to think of physical products as one offs where what you buy tomorrow is the same as what you buy today. But I have run a bakery for 5 years, and you get better day by day, you introduce new techniques, find different flours, optimize bake times for fluffiness, crispiness, and taste. The croissants we make today are much better than what we made during our first month. We improved our product just like how software improves, but we did it without a croissant subscription, but by selling its own version as its own thing day by day. What software companies need to do is sell versions, where the life time of the version usefulness is actually limited. In the physical world, we have wear and tear, or in the case of croissants, decomposition or consumption which limit customers from using the same product forever. Can the same not be found for many software products? To use iOS as an example, the OPs app Castro charges for night mode, but night mode via OS controls didn’t always exist in iOS so a theoretical Castro v1 could have been released without before it, and v2 would include that new feature. Or when inevitably, v1 no longer works on new iOS versions, people would have to upgrade.
- dabluck 3mo ago
  We don't charge for night mode. I don't really think versioning would work very well for us, many have tried, but I do agree Apple should facilitate other business models like this in a better way.
  - true_religion 3mo ago
    On https://castro.fm/ https://castro.fm/ It says Castro plus has advanced features, side loading, night mode, icons and more. If you don’t charge for it, then highlighting it as part of the Plus package is confusing.
- angiolillo 3mo ago
  > What software companies need to do is sell versions, where the life time of the version usefulness is actually limited... Can the same not be found for many software products? Some of the enterprise software I've worked on has an option that functions this way. You pay for a specific version which is supported for a few years. You can keep using it forever but if you want to keep getting security updates or live support then you'll have to buy a newer version that is still in its support window. Having said that, it seems like most businesses seem to prefer subscriptions.
vladms 3mo ago
Depends though what you pay for the one-time price. You can pay an offline version of the application (no extra costs afterwards), or a limited period of SaaS application updates (let's say 3 years). I agree that paying a one time price and expecting continuos updates and new features is not reasonable.
- jbstack 3mo ago
  For the majority of software I use, I don't really care about continuous upgrades and new features, as long as it works with the feature set I signed up for. A great example for me is the Xodo app on Android. It's by far the best PDF editor that I've found on Android, particularly for annotating with a digital pen. Some features are locked. If I want to unlock them, it's $5 a month. I get nothing out of that which isn't already in the app. I'm happy to pay a one-off fee for the work the developers have done up to that point. I'm definitely not happy to add another $5 a month to my pile of subscriptions. For me the boundary is this: (1) If I get something of value every month (e.g. use of a cloud server, or something which obviously needs regular updating like Netflix) -> subscription justified; (2) If I just want to use what I can already see in the app -> very unlikely I'll ever subscribe unless the product is absolutely essential to me and there are no competitors. A good example of the latter is Skritter. I don't care about new functionality, but there literally isn't another app which can do what it does, so I pay the subscription.
  - simiones 3mo ago
    The biggest tension between software and one-off purchases is related to bugfixing, and especially security. It makes sense that you don't expect new features for a product that you paid for once. But, what is the case with bugs? If the product mostly does what it promised to do, but sometimes crashes, do you expect those crashes to be fixed for your version, or not? What it you're using a 10-year old version and a new critical (say, unauthenticated remote execution) vulnerability is found in it? Do you expect to get it resolved as part of the price you originally paid, or would you be ok with being told you have to buy a new version if you want this ?
    - 3mo ago
jbstack 3mo ago
> there is no way to sustainably develop a product without subscriptions This is clearly incorrect given that there are plenty of software developers who offer lifetime purchases. In fact there was a time that subscriptions for software were virtually unheard of. On a lower level, all that matters is the numbers. If your average customer stays subscribed for 24 months, then charging a lifetime fee equal to 24 months is equivalent to a subscription model. At that point it's irrelevant what's "sustainable" since 24 months is the max you can expect to charge on average anyway.
- bluGill 3mo ago
  Software was always a subscription you bought version two then version three... It wasn't obviously or explicitly a subscription but it still was one.
  - jbstack 3mo ago
    That isn't the same thing at all. If I buy version 2 then it's mine and I can continue to use it for as long as I want, if I'm happy with the feature set. I can ignore version 3 or choose to buy it. If I buy it then I now own two products instead of one. Sometimes the older version might even be better (e.g. features I like have been removed or made worse). With a subscription model I'm forced to pay again and again even if I'm perfectly happy with version 2.
    - bluGill 3mo ago
      In theory you are correct but realistically you will upgrade.
      - GrinningFool 3mo ago
        The difference is without subscription, I can be pretty sure the next major version will benefit me. With subscription,the only thing certain is that the seller wants to do as little as possible to keep taking my money. This tends to result on product updates that benefit them.
swiftcoder 3mo ago
> Every one-time price is a gamble, where somebody is betting on something. It's a way to close your eyes and pretend ongoing costs do not exist. The gambling goes both ways. Your $1 subscription price is betting that you can convince each user to keep on paying that subscription forever, their $24 lifetime price is betting that customers are going to churn after a year on average. Your gamble is perhaps slightly safer, in the sense that if subscriptions fall so too do the ongoing costs. But there is a floor to costs (i.e. you need to keep paying your team), so both approaches are pretty dependent on the sales funnel bringing in new subscribers
michaelt 3mo ago
> There is no such price If it’s sustainable at $1/month, and a customer is willing to prepay $1200 for a 100 year subscription, that sounds sustainable to me.
- Uvix 3mo ago
  It’s sustainable at $1/month at current costs, but those costs will go up over time. The subscription price could be raised accordingly but they can’t go back and ask for an inflation adjustment from people who bought it.
  - Grombobulous 3mo ago
    Technically you could invest the money that hasn’t been used to cover the lifetime user’s costs. Even leaving it in a the right checking account, it’ll earn interest.
- jwr 3mo ago
  But that's a gamble! That's exactly my point. Someone is betting on something. How long the customer will stay, how long the software will be maintained and available, etc.
  - michaelt 3mo ago
    Everything in business is a gamble. Maybe tomorrow my competitor will aggressively cut prices. Maybe the product line I've spent money developing won't sell well. Maybe that new machine I've invested in won't be as productive as the marketing materials promised. Maybe bad weather will mean my customers stay home instead of visiting my shop. Maybe a war on the other side of the planet will raise my material costs and empty my customers' wallets. Maybe the artist headlining my music festival won't be allowed to enter the country. Maybe 10 years into its 50 year life my nuclear power plant will be undercut by falling costs for solar. Maybe Google will make the thing my app does a native feature of their OS. Maybe we pushed the envelope too far or didn't test thoroughly enough and we'll be buried in warranty claims. This risk is why investments in businesses pay more than treasury bonds. If you aren't comfortable with that, entrepreneurship might not be right for you - nothing wrong with being an employee and getting the certainty of a monthly salary.
zmgsabst 3mo ago
$1/day forever is around $9125 using the safe drawdown rate of 4% per year. So if you’re a bakery and a customer offers $9000+ for a fresh roll every day forever, you should almost certainly take them up on that offer. A smart baker could probably get that number sub-$5000, but you’ll always come out okay around 25x the yearly cost (in this case, $365). Similarly, if the amortized yearly cost of a customer is $12 (ie, $1 per month), then a $300 forever price is financially indistinguishable from a permanent subscription. (Actually, better: time value of money, they can’t cancel the annuity you buy, etc.) So there always is a price where that is financially viable.
- drdec 3mo ago
  > the safe drawdown rate of 4% per year IIRC this rate is based on some standard retirement length (like 30 years), not forever.
PaulHoule 3mo ago
I remember an article in Byte magazine circa 1982 or so which talked about how the software business sucks because it goes like (1) Raise capital and spend a year developing a product (2) Release the product, make a certain amount of money, then revenue dries up (3) Pay yourself a bit and feed the rest of the money into develop version 2.0 (4) A year later it is struggle to sell version 2.0 because you're not just competing with applications from other people you are competing with your old 1.0, your most satisfied customers might be the least likely to upgrade And that assumes development for 2.0 goes according to plan! As a software developer who gets a paycheck my life is easier working on a subscription based project my life is easier because management is not facing a financial crisis because a project is running a few months late. As a customer though I often like paying ahead and I've been through a few cycles like this with Plex. Like I see the lifetime offering from Plex and I have the money now and it looks like a good deal... Then two years later they come up with something that really alienates me (that FAST service) and I hate being pushed into something I want nothing to deal with. So I go to Jellyfin and it is a godawful mess that I never get working quite right, just watching a movie with family and friends becomes an exercise in humiliation. And I'm thinking... I don't have the option of exit [1] because I can't cancel my Plex pass! If on the other hand I was paying for a monthly subscription they are motivated to care what I think [2] Now funny I had this summer when I was trying to gentle a stray cat [3] in a room in the other house and wound up watching a lot of Tubi, came to the conclusion FAST wasn't so bad, switched back to Plex, got a monthly subscription, and I am highly satisfied. [1] https://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty_Model https://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty_Model [2] I hate to be this way but when I have trouble w/ amazon I write to jeff@amazon.com and point out that it makes no sense to screw me for $20 because I have a say in at least $2M NPV of AWS cloud spending, when you consider a Prime subscription and how much an ordinary person could buy from AMZN in a lifetime, AMZN has a tremendous amount to lose from "exit" [3] https://mastodon.social/@UP8/tagged/bobb https://mastodon.social/@UP8/tagged/bobb
- cindyllm 3mo ago
  [dead]
mrguyorama 3mo ago
When I go to a bakery and buy a roll of bread, some of the money I pay the bakery will be squirreled away for future purchases, improvements to the business, expansions, cover lean times, etc. That margin is called profit and has been the standard way every single business ever has managed ongoing expenses outside of per-transaction costs forever. Despite this "Gamble", businesses continue to function every day. Some fail, but that is a purposely designed part of the market. If you cannot forecast your costs and revenue, you are supposed to go out of business. It's funny that only in the world of Tech, the supposedly magical world where you can do so much with so little and one individual can "Build" something used by millions, that suddenly customers have to bear the burden of the business's inability to forecast costs and profit. What, do you also expect me to tip you when I download? Keep in mind that the vast vast majority of software subscriptions do not let you continue using the product you have paid for when your subscription lapses, even when the product gets no more support!
angiolillo 3mo ago
> There is no such price, because there is no way to sustainably develop a product without subscriptions Such a price clearly exists -- in an extreme case you could charge 50x your annual subscription price and invest it with a 2% yield to get the equivalent of your subscription as interest. More realistically, if you are already considering taking on debt to grow your business it can make financial sense to offer lifetime licenses that are equivalent to several years' worth of subscription revenue to get an influx of up-front liquidity. Of course as your needs change so will your ratio of subscription-to-purchase price and this may result in a purchase price that is too high for your customers to consider, but the number always exists. > Every one-time price is a gamble True, but so are subscription prices! Either way, as the person who sets the prices, you are well-positioned to pick ones that are most likely to be successful.

by jwr 3mo ago

true_religion 3mo ago

We like to think of physical products as one offs where what you buy tomorrow is the same as what you buy today. But I have run a bakery for 5 years, and you get better day by day, you introduce new techniques, find different flours, optimize bake times for fluffiness, crispiness, and taste. The croissants we make today are much better than what we made during our first month. We improved our product just like how software improves, but we did it without a croissant subscription, but by selling its own version as its own thing day by day. What software companies need to do is sell versions, where the life time of the version usefulness is actually limited. In the physical world, we have wear and tear, or in the case of croissants, decomposition or consumption which limit customers from using the same product forever. Can the same not be found for many software products? To use iOS as an example, the OPs app Castro charges for night mode, but night mode via OS controls didn’t always exist in iOS so a theoretical Castro v1 could have been released without before it, and v2 would include that new feature. Or when inevitably, v1 no longer works on new iOS versions, people would have to upgrade.

dabluck 3mo ago
We don't charge for night mode. I don't really think versioning would work very well for us, many have tried, but I do agree Apple should facilitate other business models like this in a better way.
- true_religion 3mo ago
  On https://castro.fm/ https://castro.fm/ It says Castro plus has advanced features, side loading, night mode, icons and more. If you don’t charge for it, then highlighting it as part of the Plus package is confusing.
angiolillo 3mo ago
> What software companies need to do is sell versions, where the life time of the version usefulness is actually limited... Can the same not be found for many software products? Some of the enterprise software I've worked on has an option that functions this way. You pay for a specific version which is supported for a few years. You can keep using it forever but if you want to keep getting security updates or live support then you'll have to buy a newer version that is still in its support window. Having said that, it seems like most businesses seem to prefer subscriptions.

vladms 3mo ago

Depends though what you pay for the one-time price. You can pay an offline version of the application (no extra costs afterwards), or a limited period of SaaS application updates (let's say 3 years). I agree that paying a one time price and expecting continuos updates and new features is not reasonable.

jbstack 3mo ago
For the majority of software I use, I don't really care about continuous upgrades and new features, as long as it works with the feature set I signed up for. A great example for me is the Xodo app on Android. It's by far the best PDF editor that I've found on Android, particularly for annotating with a digital pen. Some features are locked. If I want to unlock them, it's $5 a month. I get nothing out of that which isn't already in the app. I'm happy to pay a one-off fee for the work the developers have done up to that point. I'm definitely not happy to add another $5 a month to my pile of subscriptions. For me the boundary is this: (1) If I get something of value every month (e.g. use of a cloud server, or something which obviously needs regular updating like Netflix) -> subscription justified; (2) If I just want to use what I can already see in the app -> very unlikely I'll ever subscribe unless the product is absolutely essential to me and there are no competitors. A good example of the latter is Skritter. I don't care about new functionality, but there literally isn't another app which can do what it does, so I pay the subscription.
- simiones 3mo ago
  The biggest tension between software and one-off purchases is related to bugfixing, and especially security. It makes sense that you don't expect new features for a product that you paid for once. But, what is the case with bugs? If the product mostly does what it promised to do, but sometimes crashes, do you expect those crashes to be fixed for your version, or not? What it you're using a 10-year old version and a new critical (say, unauthenticated remote execution) vulnerability is found in it? Do you expect to get it resolved as part of the price you originally paid, or would you be ok with being told you have to buy a new version if you want this ?
  - 3mo ago

jbstack 3mo ago

> there is no way to sustainably develop a product without subscriptions This is clearly incorrect given that there are plenty of software developers who offer lifetime purchases. In fact there was a time that subscriptions for software were virtually unheard of. On a lower level, all that matters is the numbers. If your average customer stays subscribed for 24 months, then charging a lifetime fee equal to 24 months is equivalent to a subscription model. At that point it's irrelevant what's "sustainable" since 24 months is the max you can expect to charge on average anyway.

bluGill 3mo ago
Software was always a subscription you bought version two then version three... It wasn't obviously or explicitly a subscription but it still was one.
- jbstack 3mo ago
  That isn't the same thing at all. If I buy version 2 then it's mine and I can continue to use it for as long as I want, if I'm happy with the feature set. I can ignore version 3 or choose to buy it. If I buy it then I now own two products instead of one. Sometimes the older version might even be better (e.g. features I like have been removed or made worse). With a subscription model I'm forced to pay again and again even if I'm perfectly happy with version 2.
  - bluGill 3mo ago
    In theory you are correct but realistically you will upgrade.
    - GrinningFool 3mo ago
      The difference is without subscription, I can be pretty sure the next major version will benefit me. With subscription,the only thing certain is that the seller wants to do as little as possible to keep taking my money. This tends to result on product updates that benefit them.

swiftcoder 3mo ago

> Every one-time price is a gamble, where somebody is betting on something. It's a way to close your eyes and pretend ongoing costs do not exist. The gambling goes both ways. Your $1 subscription price is betting that you can convince each user to keep on paying that subscription forever, their $24 lifetime price is betting that customers are going to churn after a year on average. Your gamble is perhaps slightly safer, in the sense that if subscriptions fall so too do the ongoing costs. But there is a floor to costs (i.e. you need to keep paying your team), so both approaches are pretty dependent on the sales funnel bringing in new subscribers

michaelt 3mo ago

> There is no such price If it’s sustainable at $1/month, and a customer is willing to prepay $1200 for a 100 year subscription, that sounds sustainable to me.

Uvix 3mo ago
It’s sustainable at $1/month at current costs, but those costs will go up over time. The subscription price could be raised accordingly but they can’t go back and ask for an inflation adjustment from people who bought it.
- Grombobulous 3mo ago
  Technically you could invest the money that hasn’t been used to cover the lifetime user’s costs. Even leaving it in a the right checking account, it’ll earn interest.
jwr 3mo ago
But that's a gamble! That's exactly my point. Someone is betting on something. How long the customer will stay, how long the software will be maintained and available, etc.
- michaelt 3mo ago
  Everything in business is a gamble. Maybe tomorrow my competitor will aggressively cut prices. Maybe the product line I've spent money developing won't sell well. Maybe that new machine I've invested in won't be as productive as the marketing materials promised. Maybe bad weather will mean my customers stay home instead of visiting my shop. Maybe a war on the other side of the planet will raise my material costs and empty my customers' wallets. Maybe the artist headlining my music festival won't be allowed to enter the country. Maybe 10 years into its 50 year life my nuclear power plant will be undercut by falling costs for solar. Maybe Google will make the thing my app does a native feature of their OS. Maybe we pushed the envelope too far or didn't test thoroughly enough and we'll be buried in warranty claims. This risk is why investments in businesses pay more than treasury bonds. If you aren't comfortable with that, entrepreneurship might not be right for you - nothing wrong with being an employee and getting the certainty of a monthly salary.

zmgsabst 3mo ago

$1/day forever is around $9125 using the safe drawdown rate of 4% per year. So if you’re a bakery and a customer offers $9000+ for a fresh roll every day forever, you should almost certainly take them up on that offer. A smart baker could probably get that number sub-$5000, but you’ll always come out okay around 25x the yearly cost (in this case, $365). Similarly, if the amortized yearly cost of a customer is $12 (ie, $1 per month), then a $300 forever price is financially indistinguishable from a permanent subscription. (Actually, better: time value of money, they can’t cancel the annuity you buy, etc.) So there always is a price where that is financially viable.

drdec 3mo ago
> the safe drawdown rate of 4% per year IIRC this rate is based on some standard retirement length (like 30 years), not forever.

PaulHoule 3mo ago

I remember an article in Byte magazine circa 1982 or so which talked about how the software business sucks because it goes like (1) Raise capital and spend a year developing a product (2) Release the product, make a certain amount of money, then revenue dries up (3) Pay yourself a bit and feed the rest of the money into develop version 2.0 (4) A year later it is struggle to sell version 2.0 because you're not just competing with applications from other people you are competing with your old 1.0, your most satisfied customers might be the least likely to upgrade And that assumes development for 2.0 goes according to plan! As a software developer who gets a paycheck my life is easier working on a subscription based project my life is easier because management is not facing a financial crisis because a project is running a few months late. As a customer though I often like paying ahead and I've been through a few cycles like this with Plex. Like I see the lifetime offering from Plex and I have the money now and it looks like a good deal... Then two years later they come up with something that really alienates me (that FAST service) and I hate being pushed into something I want nothing to deal with. So I go to Jellyfin and it is a godawful mess that I never get working quite right, just watching a movie with family and friends becomes an exercise in humiliation. And I'm thinking... I don't have the option of exit [1] because I can't cancel my Plex pass! If on the other hand I was paying for a monthly subscription they are motivated to care what I think [2] Now funny I had this summer when I was trying to gentle a stray cat [3] in a room in the other house and wound up watching a lot of Tubi, came to the conclusion FAST wasn't so bad, switched back to Plex, got a monthly subscription, and I am highly satisfied. [1] https://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty_Model https://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty_Model [2] I hate to be this way but when I have trouble w/ amazon I write to jeff@amazon.com and point out that it makes no sense to screw me for $20 because I have a say in at least $2M NPV of AWS cloud spending, when you consider a Prime subscription and how much an ordinary person could buy from AMZN in a lifetime, AMZN has a tremendous amount to lose from "exit" [3] https://mastodon.social/@UP8/tagged/bobb https://mastodon.social/@UP8/tagged/bobb

cindyllm 3mo ago
[dead]

mrguyorama 3mo ago

When I go to a bakery and buy a roll of bread, some of the money I pay the bakery will be squirreled away for future purchases, improvements to the business, expansions, cover lean times, etc. That margin is called profit and has been the standard way every single business ever has managed ongoing expenses outside of per-transaction costs forever. Despite this "Gamble", businesses continue to function every day. Some fail, but that is a purposely designed part of the market. If you cannot forecast your costs and revenue, you are supposed to go out of business. It's funny that only in the world of Tech, the supposedly magical world where you can do so much with so little and one individual can "Build" something used by millions, that suddenly customers have to bear the burden of the business's inability to forecast costs and profit. What, do you also expect me to tip you when I download? Keep in mind that the vast vast majority of software subscriptions do not let you continue using the product you have paid for when your subscription lapses, even when the product gets no more support!

angiolillo 3mo ago

> There is no such price, because there is no way to sustainably develop a product without subscriptions Such a price clearly exists -- in an extreme case you could charge 50x your annual subscription price and invest it with a 2% yield to get the equivalent of your subscription as interest. More realistically, if you are already considering taking on debt to grow your business it can make financial sense to offer lifetime licenses that are equivalent to several years' worth of subscription revenue to get an influx of up-front liquidity. Of course as your needs change so will your ratio of subscription-to-purchase price and this may result in a purchase price that is too high for your customers to consider, but the number always exists. > Every one-time price is a gamble True, but so are subscription prices! Either way, as the person who sets the prices, you are well-positioned to pick ones that are most likely to be successful.