If you have Lifetime Deals (LTD) but the SaaS shuts down, where does that leave you?

I guess the "lifetime" is not a period of a founder’s life but a lifespan of your saas.

It's the lifespan of the business however I still believe the users must be honored even after you go out of business.

The most viable solution can be offering:

1. Standalone version of the product for LTD users that doesn't need access to servers etc.

The good example can be turning your app into a native app. Give LTD users for free and keep it on sale with the note that it's not getting updated.

2. Turning your product into open source product and give users option to spin up their own local or remote servers to be able to keep using it. And who knows, maybe it turns out OSS model might be the beginning of a new chapter for your product :)

This is what I found on the AppSumo website for their Lifetime deal terms:

"Lifetime - These are subscriptions where you pay once and you don’t have to pay again for access to the product. This is not for the lifetime of the customer, but the lifetime of the product. In SaaS, although an overwhelming 90% of startups fail, AppSumo SaaS Select tools have a track record of less than 5% becoming a bad investment. Not even the S&P 500 can beat this. But, like any investment in early stage startups, there is a risk it may not work out. Our goal is to ensure you at least get savings to justify the purchase within a few months."

Source link: https://help.appsumo.com/article/698-purchase-protection-policy

So it seems if the product fails the customers do lose their money and that is expected and clear from the terms.

That being said of course as a founder if my product fails I would try to at least help the customers in following ways:

• Give me a long enough notice period
• Help them successfully export all their data
• If possible try to make the code open-source and document self hosting if some customers want it.
• Partner up with other competitors in the same industry and help them migrate to them, (maybe reach out the competitors and offer them your existing clients and try to get a deal for your customers)

I've always wondered why "one-time purchases" aren't referred to as a buy-in for early adopters. Call it for what it is...as a solo founder, I could benefit from a cash infusion in the near term. I'm willing to offer you a good financial deal that helps me and gives you access to something you want/need. I'm giving up longer-term revenue, you're taking some risk in exchange for a lower price.

I would try my best to refund - not worth the reputational damage especially if you have your name attached to it

Hi @rmondo, one way to assuage your concern is to have a pledge of a minimum time that your service will be up.
For most SaaS, it's not that hard : basically just pay up your domain name and hosting 2 years in advance (or even 5) and you can fulfill most of the service or at least keep user data up.
Or you could either open source your code, or do it like AmpleNote - one company that has a pledge that if they go under, they will release source code.

Almost all of the websites I've run have been online more than 10 years each, so I'm less concerned about that. As long as you plan what your "exit" looks like, it's fine.

Sébastien

I don't think any reasonable person thinks they can use the service until the age of 100.

Nevertheless, clearly communicating “lifetime” is about the business/company, not the person buying it, might be a good thing to add.

It's worth nothing that as a new business, it's unlikely you are able to sell products at $100+. It's takes some time to build trust before you can ask a significant amount of money (maybe longer than you are able to keep the project around).

A general thought with LTDs...
Often some of the big ongoing costs outside the actual software can be email/text/hosting requirements
I'm happy to bring my own Twilio account to an LTD if that helps a new software founder get their project up and funded.

Broadly, a LTD offer in the early days of the software is made at less than the price of an annual subscription. The buyer is making a bet that the software will be usable for much longer than a year. A year's usage should be considered as breakeven. If the SaaS shuts down before a year, then the buyer's bet has not paid off. And anything over two years of usage should be considered great value.
Is this a fair proposition?

This is something that appsumo is quite scared about, I think, and they do their best to make sure they don't run into a company with the plan to just shut down after the LTD is done.

I think one should buy LTD keeping in mind about usage. From a business perspective if it's a tool that migrating from it will be difficult in future then I'd avoid such LTD. For e.g I can buy LTD for an invoicing tool but will never go for a CRM tool.

LTDs are probably a price structure best suited for products that blur the line between "SaaS" and "Info" products. If you can't make effective use of what you bought after purchase if the business isn't around, I don't think that's a fair scenario to introduce LTD's into.

Good Use of LTDs Example:

• TailwindUI (https://tailwindui.com/): templates and components you can download and use forever, but also get access to any updates or future components that become available.

Historically when you purchased software, you downloaded a licensed copy and could run it forever. LTD's made a lot of sense and often included any future updates. If the business shut down, you'd still have access to what you paid for.

When SaaS really hit the scene and moved the software access to central servers, today's subscription models made a lot more sense.

Of course it is the lifetime of the business and not for the buyer.

But I wonder what would happen if there is an instance where a particular application is privatized and made to be sort of an in-house application. Some acquirers might compensate the users, though I know some would just sweep that under the rugs. Chasing after them could be costlier and simply not worth the pain. So, there is that risk. From a buyer's view, there is also the risk that you may have misjudged a product's future which could go out of business sooner than you could recoup the investment.

In the past month, I came across a video where Neil Patel was being interviewed. And according to him, most of the monthly subscribers do not stay for a long time- If I remember correctly he said less than a year. So, offering an LTD for the equivalent of a year's revenue could mean that you are quickly getting year's worth of income for the price/expense of the future. This would work really well if dealing with applications that are not resource intensive and not operating on thin margins.

From the founder's perspective, there is need to really do the math and make sure that if the users stick around, they will not be driving the business parking with their usability.

LTD is for the lifetime of the product. Any doubt, check the terms of any platforms you sell LTDS e.g. Appsumo's terms and conditions confirm this

Lifetime might be the wrong word. I personally know it's a gamble that I'm buying access to a product I may need for a bulk discount, but just like a Kickstarter or any other type of crowd funding it's a gamble on whether or not the tool will be around for long.

Personally, if a service looks good enough to me, spending ~$200-500 or so now and never having to worry about billing is easier than subscribing for 5 years at $30-100/mo ($1800 - $6000).

I've always wondered if "Early Adopter 2 year" sale would be better than "Lifetime", but I think "Lifetime" works the same as crowd funding.

A good question, I was wondering about it myself.
Can users sue if a Saas defaults on the promise? If yes it is risky marketing.

Zool once offered a LTD for 500GB of personal backup storage. Then they 'pivoted' to business users. https://www.reddit.com/r/DataHoarder/comments/j2jskb/zoolz_lifetime_plan_getting_discontinued/

I think there is a balance of why someone buys this (to support the business) and the understanding that the revenue will go towards supporting a product they love. I do think the understanding has to be that the LTD is to the life of the business and tool operating, not eternity :)

Your question is valid and If I am a founder of a product who offers LTDs, I will mention some terms and conditions for that deal such as full refund if something goes wrong in a certain period of time or partial refund.

Its all about being honest with the customer. I know it might impact sales but I would chose to go for making less rather than damaging my reputation as a founder.

As lot of people already mentioned about what "Lifetime" means i won't repeat that again. As a SaaS founder myself i recently went for LTD for my product and looks like a good deal but as a buyer that's indeed a good question to brainstorm on. The worst part of buying a LTD!

As others mentioned, a lifetime deal is of the lifetime of the product, not the user. (and trust me this is a huge misconception)

This is a good question that I think hints at its worse drawback.

LTD increases the potential for frustration because the more customers pay, the more entitled they feel that their expectations should be met, and the more upset they will be if not (because they have paid for it).

Consider a much less dramatic example: you simply don't release updates as fast / meaningful as customer think (whatever is what they think, reasonable or not).

A recurring customer would just say "this is going anywhere, I'm cancelling" and not feel too terrible about it.
But an LTD customer is stuck with their investment, and will be more angry at you.

IMO LTD is a matter of trust more than anything else, and gaining customers trust (upfront) is very hard.

Just my 2c!

As some others have mentioned, it should be fine since the LTD only apply to an existing product. You're not really getting charged if your product goes down.

As you said lifetime here doesn't mean your lifetime, but lifetime of the company. I think this should be communicated clearly, because expectations can be different.

I'm not a founder, but as a buyer of SaaS subscriptions, I buy the option that looks like is the most valuable and often that is a LTD, I actually don't consider the company going bust. You're right, you could end up paying more vs a monthly or annual plan if they do go bust but I think the chances are low overall that it's probably not worth worrying about.

I'm a founder too, and also considered the same quandary. I don't think many founders consider this though as it's all about being profitable - it's rare for someone to consider what happens if it all goes wrong. Harsh but true. I actually don't offer LTDs for this very reason, and a few other reasons too. As a SaaS user, I also don't subscribe to LTDs because tech moves so fast the chances of the LTD actually being the money-saving option is negligible.

Hey @rmondo,

GitScrum (https://site.gitscrum.com/pricing) has been offering Lifetime Deals (LTD) since 2018, and I am the founder of the company. When we first started selling LTD, one common concern among potential buyers was the possibility of the company going bankrupt.

However, I am happy to report that we have many satisfied customers who purchased our LTD in 2018 and have been enjoying all of our updates for almost five years now. In my opinion, buying our LTD is a great deal for anyone looking for a reliable and long-term project management solution.

All the comments are informative, but it's important to remember that Limited Time Deals (LTD) is a business model that companies use to drive sales and increase revenue. It's important to consider this context when evaluating the validity of the deal.

At Gitscrum, we are dedicated to maintaining the longevity of our software and its continued success. We release updates consistently on a daily basis and we are very proud to know that many of our users have been using our software for over 4 years and have purchased our LTD.

We're even heavily integrating ChatGPT, a new feature. Is there a big prejudice regarding LTD's?