A lot of founders are anti-lifetime deals.
They don't think it's a sustainable business model, or their egos are too big to "support a bunch of non-paying users for life."
But here's the thing: lifetime deals (LTD) is not a business model.
Rather it's a funding model.
Your customers pay upfront for your software in its nascent state because they want to invest in you and your product.
They give you cash upfront and ample feedback to get you to product-market fit.
In return, you'll take care of them for the lifetime of your company.
That's it, that's the model.
Hell yeah, it gives you badly-needed liquidity upfront so you can invest in product development.
It's superior to investor funding because:
You have to be pragmatic if you want to live to fight another day.
Get cash upfront whatever way you can, ideally without investors.
And revenue is the best funding source (even LTD revenue) because it validates your offer.
Well you're "on the hook" for the rest of your life supporting a bunch of non-paying users.
But is that such a bad thing?
Don't be ungrateful, these are the people who believed in you and paid upfront for an LTD when your app was total shite.
Here are 4 things to keep in mind:
Maybe it's just me, but I don't see any downside of doing an LTD as a funding model at all.
I've debunked every single criticism levelled against LTD.
And it's untrue that one-time payments don't have repeatability.
Don't forget the VAST majority of businesses in the world rely on one-time payments.
You can use it as a funding model, a business model, or both.
Don't worry about LTD cannibalizing your company valuation and all these other pie-in-the-sky things, survive first.
Then cross that bridge when you get there in the future.
I send email once/week, and they're short (1-min reads).
Topic is "my most salient learning point in entrepreneurship of the week."
https://birdsend.page/forms/9255/Mw7NC0sReJ
You may also keep in touch with me on X: https://twitter.com/therealjayber
I'm also currently running a LTD promotion for my product Zylvie, here:
https://zylvie.com/deals/p/kenmoo
They don't think it's a sustainable business model, or their egos are too big to "support a bunch of non-paying users for life."
But here's the thing: lifetime deals (LTD) is not a business model.
Rather it's a funding model.
LTD is a funding model, not a business model
Your customers pay upfront for your software in its nascent state because they want to invest in you and your product.
They give you cash upfront and ample feedback to get you to product-market fit.
In return, you'll take care of them for the lifetime of your company.
That's it, that's the model.
Is it a good funding model?
Hell yeah, it gives you badly-needed liquidity upfront so you can invest in product development.
It's superior to investor funding because:
- You keep 100% equity (no parasites riding your coattails); and
- Their feedback is actually relevant, since they're your users/customers.
You have to be pragmatic if you want to live to fight another day.
Get cash upfront whatever way you can, ideally without investors.
And revenue is the best funding source (even LTD revenue) because it validates your offer.
What's the downside of LTD?
Well you're "on the hook" for the rest of your life supporting a bunch of non-paying users.
But is that such a bad thing?
Don't be ungrateful, these are the people who believed in you and paid upfront for an LTD when your app was total shite.
Here are 4 things to keep in mind:
- The marginal cost of serving each LTD user is near-zero. Your servers are running anyway, you're paying for hosting regardless.
- Use churn is very high in LTD users. When people aren't paying monthly, there's no urgency to use it. So all the fears about LTD users overloading support are overblown.
- Don't forget LTD users have high net promoter score -- these are the people who will become your best advocates, your biggest affiliates, they write reviews, make videos, and spread the word about you.
- If your product has baked-in viral loop, these LTD users are free marketers for you, similar to freemium users, except they're actually paying for it.
Pour conclure
Maybe it's just me, but I don't see any downside of doing an LTD as a funding model at all.
I've debunked every single criticism levelled against LTD.
And it's untrue that one-time payments don't have repeatability.
Don't forget the VAST majority of businesses in the world rely on one-time payments.
You can use it as a funding model, a business model, or both.
Don't worry about LTD cannibalizing your company valuation and all these other pie-in-the-sky things, survive first.
Then cross that bridge when you get there in the future.
I send email once/week, and they're short (1-min reads).
Topic is "my most salient learning point in entrepreneurship of the week."
https://birdsend.page/forms/9255/Mw7NC0sReJ
You may also keep in touch with me on X: https://twitter.com/therealjayber
I'm also currently running a LTD promotion for my product Zylvie, here:
https://zylvie.com/deals/p/kenmoo