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44 Comments

Indie hackers, I don't understand your Lifetime deals

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Hi fellow Indiehackers,

I noticed some of you releasing lifetime deals for your products and services. I respect your decision but. I don't get your business model. What are you gaining from such a customer when I see you losing a lot in the long run.

How do you handle scalability, feature requests etc from such customers?
I mean, you cannot treat them less at a later point of time.

Do you include something in Terms and conditions? or do you sit back and do nothing?

  1. 14

    I haven't done it myself but from what I can see one of the biggest benefits is a large up-front cash injection for your business. Instead of getting revenue over a few months or years, suddenly you have a larger amount you can use to build out larger pieces of your product (by hiring devs, content writers, designers, paying for advertising or licensing etc).

    I really like how roam have done it - it's not lifetime, its 5 years at a large discount. This makes me believe they plan to be around for a long time (more than 5 years) and they called it "Believer" which really hits home: https://roamresearch.com/

    1. -1

      This comment has been voted down. Click to show.

      1. 2

        If you made it free you wouldn't be able to raise cash 🤔

        I think people generally hope that customers would sign up for a lifetime plan instead of yearly so they can offset the "on-going" subscription payments worry as well i.e. customers don't have to think "oh no another thing to sign up to", they just pay once and are done.

        1. 3

          My bad, you are right, free yearly plan doesn't make sense.

  2. 13

    Great to hear assumptions being critically questioned. I think if you’re aware of it, there’s less risk that you’ll end up selling $10 bills for $9, and trying to make up the difference “in scale”. Also, it’s good to feel the (deserved) pain of churn every month, instead of delaying it a year later: you learn and act right now.

  3. 9

    I have lifetime deals for https://pingr.io

    But.

    1. I have limited number. I don't use AppSumo or similar services, which provides a lot of users while keeping the revenue of LTD very low.

    2. My LTD cost equals 10 months of average subscription. So I get quite a decent amount of money, in my opinion. My LTV might be much larger but...

    3. ... LTD offer if for early users which provide a lot of feedback, test the system, etc. So these are early adopters

    So imagine in long term:

    • Get 100 LTD users which gave you some money (thus motivation to work, thus money for re-investment)
    • Get 1000 subscription users which pays you regularly

    Moreover, supporting LTD users after 10 months will still e profitable, since I provide uptime monitoring, 1 monitor might cost me (for example) 0.1$, 20 monitors (LTD limit) = 2$. LTD price is 200$. Thus I'm technically getting revenue for 100 months.

    If we consider example of successful launch of http://simpleops.io/. In short period of time a guy got like 10-20k$. Not bad thought for re-investment. Depends on how much does it cost for him to support his LTD clients...

  4. 7

    If you look at the curve (pg.4) on this visual from Seth Godin's book Purple Cow, it should clear things up about growth of a product/customer acquisition over time (x) and population (y).

    https://www.slideshare.net/MarisLim/purple-cow-10067229

    It shows that the 'Innovators' and 'early adapters' are a small amount of people but they are the right audience, they're willing to pay for your product and talk about it. Word of mouth is better at this early stage than mass marketing because these are people who are seeking out your product and telling others about it. This influences the curve.

    They not only talk about it but their use of your product, consumer insight and feedback (which they are generally very willing to give) allows you to iterate and improve so that you're more likely to succeed and acquire more customers.

    Basically they are an investment. Think of these early stages as paid research, where the researcher is paying you to improve your services!

    Therefore, from this standpoint that lifetime deal is an investment for you and as others have pointed out it's also a cash injection so that you can keep growing and getting those early and late majorities. It's a win-win in the early stages and a small price to pay so you're not really giving them any more value in the long run than they are. I'd say it's a symbiotic relationship, especially in the beginning.

    Hope this long thing makes some sense lol

    1. 3

      The motivation to join the platform is different.

      I believe that deal hunters are less valuable than traditional users because they chose to be on your platform because you were cheap and not because they love what you are doing. People generally advocate those products that they enjoy using.

      1. 2

        Lifetime products cost a lot and in most cases it is nowhere near cheap. Plus, there are 1000 places their money could have gone to, this person has invested in your product because he/she believed or just liked it, otherwise, they would have done something with their money. You should value them just like any of your customers.

      2. 2

        But they still purchase because they value what you're building and see a future for it. Some lifetime deals are not cheap at all and your better off purchasing a month or 3 month membership to try it out but if you see value in it you'd buy a lifetime of course because it's more affordable than paying monthly but still because you want the product.
        Also, I don't know if anyone would just throw money at a product because it's cheap and not because it can solve a problem for them - people don't generally seek out a product for no reason, there must be enough interest in it that compounds with use and makes them talk. I think this value/cost question is two sides of the same coin really.

    2. 1

      Well said.

      There is no escaping the fact there is a trade-off you have to make. I break it down to these three main trade-offs.

      • Investors
      • Sell your time
      • Discount your product

      Each avenue has it's cost. It's up to you to figure out which price is worth it. Your message above makes it clear that the best option is #3 even if it may appear to be counter-intuitive.

  5. 5

    I had a 50% off plan made available to early adopters of Cleaver. I made it available as I wanted to reward beta testers and early adopters. It helped generate some cash quicker sure, but I wouldn't say a lot and mainly is enough to cover infrastructure costs for the foreseeable future.

    I've been asked about doing the one-time-payment-for-life type deal as well as AppSumo type setup. I don't find either of those appealing, not with a SaaS and not when I find providing quality customer support and quality experiences to be highly important.

    I want organic, sustainable growth so I can provide appropriate support, that at this stage, typically benefits all subscribers as it leads to improvements in the system. I want new users to come in and have vastly better experiences than subscribers that subscribed just a week or two before. This helps build raving fans. I fear something like AppSumo would mainly just end up in cheapening everything across the board. Which is not what I'm up for doing.

  6. 4

    Yes you have to treat every user the same. There are actually many benefits with limited LTD'S vs growing through monthly subscription when you are launching. Usually it take 6 months to an year to get first 10 customers for SaaS.
    # Get 30 to 40 early customers, a great win
    # You get cash flow, so you can concentrate more on building the product and than chasing customers
    # Loyal customers who can be the direction you need

    1. 1

      Hey! I have kind of the same question in my mind but thanks to @start123 for putting this question out!

      @1hakr what if we are unable to sustain our business even after getting few initial customers from LTD? Do we have to return the money to our LTD customers?

      1. 1

        If you are shutting shop in 6 months then yes you should.

  7. 4

    That's funny I tweeted the same questions a few days ago.
    The answer I got is:

    • It ensure user stickyness in the first days of your app
    • These users could help to grow the user base with word of mouth/reviews/feedback etc…

    But I'm still pretty curious about it!

    1. 5

      I think a lot of startups fail even before takeoff so, this strategy ensures some runway I assume.

    2. 2

      I've seen that argument but would expect that the word-of-mouth networks and feedback that you get from a $49 lifetime user, are significantly different to a $99 per month customer.

  8. 3

    It's simple cost vs benefit. I did a lifetime deal for https://storycreatorapp.com and I don't feel bad about it at all.

    I saw three options and each one had it's own trade off.

    • Freelance to pay the bills -- this would have taken time to find a client, would have required taking a step back and practicing complete humility. It's not a bad option but it is a distraction from growing the main product. The trade off is selling my time.

    • Find an investor -- this option is the worst. It would have taken all my time and attention just to play games with skeptical money men who generally don't provide a lot of value. This would have hurt the product plus there is still a chicken and egg problem. If I don't have users no one wants to invest. Not taking my chances here. The trade off is selling a portion of my company and my soul.

    • Lifetime deal -- this option to me is the best. It brings enough cash so I can pay the bills and stay alive for a few months. It also gives me early feedback -- here I learned how to scale my system, I learned where the bugs were, etc. Also now there is no churn for the first year. The trade off here is yes the LTV of 100 customers is low.

    If you factor all the costs vs benefits of each option then you can see that lifetime deals are actually smart, it's highly circumstantial.

    To me anything that can keep me focused on customers and product is a winning choice. Everything else is a distraction.

    If you're wanting to join the family. I still have a few lifetime deals available at https://storycreatorapp.com

    1. 2

      Hey there :) hehe

      1. 2

        Just read your post. You make good points. Interesting thread haha, good to see you. Were you satisfied with the launch results?

        1. 1

          Sure, it's not that great as yours (you have superb unique product!), but I'm okay with small steps :)

  9. 3

    Must admit I've always found them crazy, unless you're a two-sided marketplace which needs accelerated growth on one side (like Zapier).

    With a LTD aggregator, like AppSumo, you take 25% of the revenue but foot 100% of the ongoing costs.

    So yes, you can acquire 1000's of 'customers'. Though the reality is as soon as they pay their $49 (of which you receive $12) they're a liability for the business. You now have someone who believes, as they've paid, that they're a deserving customer, yet who is essentially just a cost for the business.

  10. 3

    Personally I think this is just another form of developers chronically under-pricing their products and being afraid to charge more.

    It's the same as when devs charge "$5 a month" (you can't run a business off pricing like this), it's just being served up a different way.

    Charge a fair monthly price. More than $25 a month at least. If people don't subscribe, get feedback and improve the product. If people churn, learn why. You will grow slowly but build a more resilient product in the long run.

    Harsh words, but when I see people doing lifetime deals, 90% of the time I write them off as short term opportunists who aren't that serious about their business, and I'm probably not alone in that regard. Some food for thought: you may actually be turning potential customers off with this kind of pricing.

    In a small minority of cases it may make sense to use LTD as a marketing tool, especially if your product is more like a one-time purchase product or an info-product. But for SaaS products I don't think it ever makes sense.

    1. -1

      This comment has been voted down. Click to show.

      1. 4

        Very few indiehackers will ever reach the level of scale where $5 per customer can actually create a sustainable business.

        1. 2

          I completely agree but this statement you made

          you can't run a business off pricing like this

          Is still wrong.

          It's not outwit the realms of possibility to get 1000 paying customers. At $5 that's $5000 a month income. Not a bad little lifestyle business for many people.

          Cheers for the downvote 🤣

          1. 4

            I actually didn't downvote you, it seems someone else disagrees with you, as unbelievable as that may be.

            Good luck on your journey to 1000 customers 👍🏻

            1. -1

              This comment has been voted down. Click to show.

  11. 2

    I've had a lot of people ask me if I had plans for creating lifetime deals for Pory.io, but I just couldn't figure out the benefits other than getting about a years worth of subscription secured. The unknowns were too much for me to agree to it (feature requests, customer support, ongoing costs) and especially how we're releasing new features all the time.

    Interested in hearing what other IH have to say :)

  12. 2

    I've never really gotten to a point where I charged people for my products/services, but I imagine getting an early user base that doesn't mind paying for an alpha/beta product is going to be great in that they will also most likely provide feedback. Really important to take the product forward.

    1. 1

      Aren' they a liability after a while. I mean no money is coming from their end yet you need to serve all their requests.

      1. 1

        If you price your deal to at least cover the costs for each customer for the first year. Then you can think of it as a seed round but instead of paying investors, you're paying those early pioneers back.

        The cost of 100 free users a year from now is far less expensive than 10% of your entire company.

        Let's say in one year you hit $1M ARR. Your investors would get paid $100k.

        Alternatively, those 100 LT customers cost $24k.

        Either way, you are paying back the initial investment in multiples. I'd rather pay my customers than a greedy investor.

        Just my 2 cents.

      2. 1

        I guess it depends on the type of project, if eventually the feedback received helps move the product forward, you can offset the lifetime users with the current ones.

        Again, purely hypothetical, not sure if this is actually the case.

        1. 1

          I don't know anyone who has succeeded with this strategy? and what if the startup folds in 3 months. It sucks to be a customer if you have paid a lifetime deal in such cases.

  13. 1

    I see people launching with lifetime deals all the time.

    IMO you should only be able to do that after a year of trading.

  14. 1

    You focus a lot on customers being a liability after a while, if you sell them a lifetime deal. That may be so, but optimally things even out, some customers will always require more than others.

    On the other end you might have customers that don't require anything from you ever and use very little resources.

    You also have people that subscribe and then stop using it and cancel after a couple of months. If you would have sold them a lifetime deal you would have gotten more money than if they were a monthly subscriber.

    Almost all of the lifetime deals I've seen are limited to a number of sales, usually less than 50. I think getting 50 sales is early on is great validation and gives you a good cash flow to scale things. I don't think it will be such a burden if you end up reaching the scale that is required to sustain your business.

    As proof, Plex has been selling lifetime deals for years and are doing great

  15. 1

    I'm asking myself the same question.
    Would any of you recommend a platform to share lifetime deal?

  16. 1

    I will respond with why I priced Better Sheets as a LTD. Reading through the other comments it's a lot of pontification on why others priced a SaaS as an LTD and assumptions are made. So I will speak about my decisions only.

    TL;DR

    • In an unstable world, give your customers stability in price.
    • It's not SaaS.
    • I wanted it to be cheap to give HUGE value.
    • More customers ask more questions from which I can make more videos.

    The Long Explanation

    1. Better Sheets is not SaaS. Every new customer does not add more cost to run it. Yes I have more support to give new customers if they ask questions. This ends up being a good thing.

    2. Yes I have an appsumo deal. Yes it's cheap. It's purposefully so. I want someone to buy it, love it and talk about the ROI, the crazy Value. These are all real things people have in fact said now that they've seen the videos. And this has produced a wide variety of customers from around the world. A $200+ a year SaaS has a few percentage points of the world as their market. At $19, It's affordable for nearly every person in the world who already uses google sheets (making socio-economic assumptions here that they either work and/or own a computer). I've also attempted to translate the videos and offer it for cheaper in other languages.

    3. Every customer question is an opportunity to make a new video, and thus I don't get more of that question. Or if I do, I can point them to an existing video. I had 8 total videos when I launched. Now I have made over 200. Early customers at the same LTD price got huge value because they got their individual questions answered. Later customers get huge value because they have access to tons of videos. I honestly didn't know what others didn't know. The AMA policy I have produced a ton of questions. And a cheap initial price means that people will actually become paying users.

    4. This is the most important reason.

    In an unstable world, give your customers stability in price.

    I launched on April 2nd, 2020. In the midst of a global pandemic.

    Life is rocky. People are scared for their cash flow. They penny pinch. They tighten their purse strings.

    First thing they do is the math. Your $5 a month SaaS is now $60 a year, in their head. There is much less work to do to figure out the total cost of a LTD. I even say: I'll never charge you again.

    Also when they penny pinch, they cancel as many Subscriptions as possible. This is different than "Subscription Fatigue". This is serious cost cutting. Every single thing they are paying for gets scrutinized. So if you have a SaaS, you'll have seen a huge churn early this year.

    And those who do invest in new products will invest in products that make them more money or give them more time (make them faster). Why I made Better Sheets in the first place.

    I wanted to make something that made new projects better. And I wanted to give stability in the pricing, because the world is unstable right now. At any other point in history I would have priced it at $15 per month and never thought otherwise.

    1. 1

      Thanks, Andrew for sharing your experience. I see certain niche products can have immense benefits from a lifetime deal and, I agree that it is practically not applicable for SAAS and other servicing industries.

      I wonder if SAAS founders have thought this through entirely. Imagine if they have to backtrack on their promise because they can no longer afford to support such customers. It damages their reputation and can lead to negative word-of -mouth.

  17. 1

    I’m happy to do a lifetime deal when I can, because I know it helps the developer in the short term. I need to see the value in the product, and plan on using it within a few months. I absolutely will be using these things and giving critical feedback and being squeaky. This will improve the product for others and also give more confidence. So a fair trade, and mutually beneficial.

  18. 1

    I haven't done lifetime deals myself, but I think it is a good idea for a certain kind of product - one that does not consume too much of your bandwidth.

    With a lifetime deal, you secure the first few customers that helps you make your business viable. Let's say you get 100 customers at $99 lifetime. That's $10,000 you got right off the bat. You can now use the money to advertise a $30/month product - something that you may be constrained to do otherwise.

    This will not work for something like say a streaming service because it consumes a lot of your bandwidth and if the user potentially shares it with others, you are going to spend a lot of money serving him for a lifetime.

    But if it's a to-do app, even if the user has a thousand to-dos in their list, you spend like a few cents on serving their requirements. So a lifetime deal makes sense.

  19. 3

    This comment was deleted a month ago.

    1. 1

      lol, either lifetime deals keep increasing on evey purchase or someone is struggling to make sales.

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