Subscription or one-time payment. Which should a startup choose?

I've never understood the case against subscriptions. One-time payment means the maker has no plans or incentives to build a sustainable business and keep improving the product. If you're trying to build a business, one-time-payment seems patently insane to me.

Here are my 2 cents: One-time payments work well for high-ticket offers. For low-ticket offers, you can provide multiple one-time offers that would encourage users to repurchase from time to time, mimicking recurring revenue. Subscriptions are great to have a viable long-term business, but some offers make more sense as a one-time payment; so depends on what you're selling.

Strange, I was thinking about this today and I read a nice article from Marc Lou about this. I would say for early stages, especially during validation phase (PMF) it would be better to have an one-time payment to your product. That way, you can validate and generate revenue fast. Especially as a solopreneur, giving let's say 7 days of free for your app and then one time payment is more attractive in my opinion. It is better to see your card charged once, than once every month.

Depends on the goal of the product and long term vision. If your system requires an ongoing cost, even if small, subscription is probably the way to go. This allows for RR and give you more flexibility to expand, add new products and more

Some startups use a hybrid model, offering: Subscription + Lifetime Access Option (e.g., pay monthly or one-time for lifetime access). Free with paid add-ons (e.g., freemium model like Canva, where users pay for premium features). If your startup provides ongoing value, subscription is the better long-term strategy. If the product is more of a one-and-done purchase, a one-time payment makes sense.

that's a great question, @nickanisimov. it's hard to believe today but subscriptions were an innovation in tech a couple of decades back. if history is any guide, they're (over?)due for a disruption. one reason - ppl are getting tired of paying the 'equivalent of a cup of coffee a day' many times over. it's great for the companies that have the market but not so much for the consumer esp. when the product doesn't - or doesn't need to - changed all that much another - when done in a smart way, there's an opportunity to disrupt some of the big guys in juicy industries b/c they can't outcompete a very attractive proposition of a one off payment. the choice for any startup pivots on what biz model they're going with and whether they have VC funding. VC love subscriptions and won't be that interested in one off payments. as for the biz model, you've got to factor your pricing model from the off to have a chance of being a sustainable biz if you're going with a one-off payment model.

In my opinion, the choice of model depends entirely on your costs. If the growth of the number of users increases your expenses, then only a subscription. And if not, then you can use a One-time payment model.

There is also a 3rd option of a usage based model, I know this is something being discussed more widely as the 'death of SaaS' and I know Satya Nadella was proposing this is the future based on integrated systems and AI usage, so perhaps another possible option to consider?

I feel like it depends on the operating costs, if your product has a generally low overhead then it could be smart to do a one-time payment but if the overhead costs are quite expensive then a monthly subscription would work better. Personally, my product is quite complex and requires a lot of upkeep, storage, data analysis, plus the constant shipping of new features, so we went with a monthly subscription. Whatever makes more sense in terms of cost in your case!

I think an important factor to consider is the cost structure of the business. If it's a one-time investment, then a one-time payment model makes sense. However, if there are ongoing costs, a subscription-based model is clearly more suitable.

I think it depends on 2 main factors: 1 - How much will your users utilize your product. If it’s daily or weekly, a subscription would be ideal for both the user and the business. For other cases, one-time payments may be better 2 - What is the goal of the product. If it exists just to make some money upfront, a one-time payment may be a good option. If you want to take your startup to the next level, have VC funding, do an exit at some point, subscriptions may be better.

I think subscriptions are making a comeback for good reason. With recurring revenue, you build a more predictable income stream and a closer relationship with your customers. It also gives you the flexibility to continuously update and improve your product. That said, if you’re offering something more static where ongoing support isn’t as critical, a one-time payment could still make sense. But for most startups, subscriptions offer a more sustainable model as it builds even longer and better realtionships with users. @nickanisimov

It's better to start with a subscription model first and then gradually introduce one-time payment options as an additional offering.