Is AppSumo a waste of money?
You're giving a "lifetime access" to people and give 50%+ of the earnings to app sumo. Is this worth at all?
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You're giving a "lifetime access" to people and give 50%+ of the earnings to app sumo. Is this worth at all?
Pros and Cons:
First the positives,
✅ - You get customers for your SaaS/product with minimal effort from your part, since AppSumo has a huge list of subscribers and audience of probably over 1M eyeballs
✅ - You make a nice chunk of money if you're doing a successful product launch, which
even if it means you're giving up 70% of your revenue, it could mean 6 figures earnings.
Example:
✅ The people actively using your product might actually only be <10% over a year, meaning that you have 90% people paying for something that they might only be using once or twice a year. This means that 90% of these people will not bother you via customer support or ask for product updates.
✅ You get - in case you sold 1000 LTD deals - 1000 email addresses and eyeballs on your product. The more you sell the bigger your audience. Crosssells and upselling can become quite fruitful in here.
✅ Word of mouth from successful users that might bring in new sales opportunities
✅ Did I mention you're getting a lot of money for a little effort in marketing and sales?
However, here are the cons:
❌ You give up %70ish of your revenue
❌If your product isn't intuitive but your marketing is - you're gonna have X thousands new users in your customer support inbox/channels
❌ You're giving up %70% of your revenue!!!!!!!! yess I said it again it's a super bad thing IMHO
❌ Some users might be asking for LTD outside of your LTD timeframe because they feel like they've missed out and thus you'll get a bunch of extra noise
❌It might really hurt you psychologically: AppSumo makes it feel simple to launch a product and you might feel like you're suffering from imposter sydrome, that you've not talked enough to your customers, aren't good at sales or marketing, that your product isn't ready. The truth is - these are probably all partially true. However, you also need to be proud of your progress and not focus on the negatives!!!!!!
❌Cost of infrastructure might become suddenly more expensive if your product gets used a lot by your LTD buyers
❌LTD buyers can ask for a refund for ~90days so you don't truly see a payout until 90 days later the end of the LTD offer expired.
Source: Me - assisted a friend launch his product on AppSumo
5K LTD customers in a short time frame sounds like a pain.
$148K for it (at $99), doesn't sound good to me either. It wouldn't be sufficient to expand the team to be able to support the growth, handle requests or tickets. Living the hell for 90 days.
Looking at the pros, if I consider AppSumo at some point. I'd go with a side project under the same brand. Explicitly simple and less demanding, just to grab those eyes and emails. Funnel them into the main product.
To answer the topic, AppSumo is not a waste of money. At least not yours. It's a simplified way of finding investment for advertisement. If there is enough budget to reach similar audience, it's possible to risk your own without giving up on 50%-70% of the revenue.
You can prepare for this working with AppSumo they will let you know what's the expectation since they've run thousands of these deals
I bet they are good at it. For experienced entrepreneurs those numbers could be a piece of cake.
Unfortunate for me, there is nothing much anyone can do to prepare me for 50 new customers overnight. I'm being pessimistic about them being demanding and even talking about this imaginary scenario making me nervous.
As someone selling a product vs a service, with AppSumo the refund rates are a lot higher than on other platforms, many try to game the system by purchasing a license and refunding it (even though the AppSumo terms say digital downloads can't be refunded).
Thanks for the detailed response. We have been thinking about making the leap too. I have been on the fence, but I think we will be moving forward.
You will end up with customers who are spoiled and think that it's their right to have all the features packed into a plan for lifetime.
You will end up with customers in which 30-40% just bought your product as Fomo. But another 20-30% will be hardcore users which will make you regret for launching lifetime deal.
I understand you can also launch on the appsumo marketplace, with a 30% commission. Not featured, not as many eyeballs but maybe a compromise.
Have you read this:
https://www.indiehackers.com/post/how-we-made-42-000-in-1-month-from-our-appsumo-launch-b9e0f652c1
IMO, it depends on the Products. But YES lifetime deal is not a sustainable business model this is also true. You should try at a small scale first to collect some users and feedback and make a strong userbase and then focus on MRR. Try on ProductHunt, Indiehackers, Different Facebook and Reddit communities, Twitter, and Forums First. If you are not getting users then go to Appsumo.
One more thing about Appsumo- yes some brands are unicorns now, which were launched on it but they are a few.
Just My Suggestion, Best Wishes 🤩
Why is it not sustainable?
Software used to be lifetime licenses.
Yes, they used to be but they were offline tools and they always asked for money to upgrade to the new version, and they still do. Lifetime Deal Model is not sustainable for a long time. If you only depend on Lifetime users then you can not get money regularly and ur service will not handle the pressure of users, you need money to run your service that's why you need MRR or ARR for it.
But I have exceptions also like pCloud and Thrivecart they always run LTD but I think they have MRR users also but not all Saas can do this. 🙂
The biggest problems that apps have these days is that they just don't solve problems people care about. It's such a big thing, that many companies will pay you to test and give feedback for their apps.
AppSumo feels like the way to get users, validate your product, iron out any kinks, and learn your bottlenecks. Imo, its the perfect way to complete the feedback loop. With all it's cons, this is worth it to me.
If you have a 40% refund rate, your idea needs iteration.
If you have thousands of support requests, your product needs improving.
If you only make like 12 sales, your marketing needs improving.
Hey,
I can share our honest review of our AppSumo launch and how we lost 30% of our potential sales:
https://mysignature.io/blog/appsumo-launch/
For me, it's not something I'd consider for a simple reason: it doesn't contribute to my MRR. That's the only metric I track and care about. If an initiative doesn't help increase it, then I'm not interested.
Short answer - don't bother.
Hi Molly, please check out the update on my current AppSumo deal here:
https://www.indiehackers.com/post/10-months-later-review-of-my-appsumo-deal-sales-it-is-worth-it-91ffc9ca44
It depends. I see a few successful companies put on AppSumo for market validation and use that feedback to raise VC money.
I gotta say even it takes around 30% of your revenue, appsumo is still an excellent platform to get your SaaS promoted.
I have launched my AdTargeting (https://adtargeting.io/) on it, it leads to at least 5% growth of users per month. Although the LTD price is quite lower than it is on our website, it improves our awareness, exposure, traffic, email subscriber, and affiliate members, which is hard to get on regular marketing methods. Besides, your loyal users will appeal to a large number of potential leads.
After all, it depends on your budget, if you are so tied, maybe appsumo is not the good choice for you. But if you are in the emergent need of more traffic and leads, it might be the right place.
Sounds like a scam
If you are an international tool and seeking more exposure in the US, AppSumo is a good option.
We launched on AppSumo twice and got around 3000 new users from the U.S. The coolest thing is that 90% of that audience are very competent people who really test your product and offer good ideas.
Planning to launch again.
Pro-you get some money and a bunch of publicity and you give up ZERO percent of equity to a VC. Long term that is the biggest benefit for a startup to launch on sumo to raise funds.
Am I wrong in thinking that they only take 30% of revenue?
https://appsumo.com/sell/marketplace/gettingpaid/
Seems much more lenient than the 50-70% that people have mentioned.
I primarily buy Saas products on Appsumo. It's a perfect fit for a boutique company that really doesn't need 75% of the features / users / data / ect. that a monthly Saas provides.
In short, know your buyer and scale / upsell your product specifically for Appsumo customers.
Comparing to freemium it's better.
It has its pros and cons. The obvious - it drove us a lot of traffic and buzz over the product. Also, many users are experienced and know what they are looking for, you can really learn a lot from them if you are open to conversation.
On the downside, most of them want your product for free. They do not value you or your offer. They just negotiate and have a problem that it is not 100% for free.
If you are focused on quick profit and sales, I recommend it. If you want to build a brand and long-term relationship with clients - there are better options.
Personally, after one campaign, I would choose to sell for a certain number of years but increase the number of features that my offer gives. I think that both the company and the users would benefit from it.