You need to do lifetime deals if you're just starting out.
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.
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:
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You keep 100% equity (no parasites riding your coattails); and
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Their feedback is actually relevant, since they're your users/customers.
Indies who are stubborn about LTD don't get very far in their bootstrapping.
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:
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The marginal cost of serving each LTD user is near-zero. Your servers are running anyway, you're paying for hosting regardless.
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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.
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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.
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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.
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I'm also currently running a LTD promotion for my product Zylvie, here:
Interesting. I was skeptical about LTD and my fears were exactly as described. Now I probably will change my mind, thanks for the post. What are recommended places except AppSumo? Is it possible to launch a beta product?
Yes, launching a beta product using LTD is probably the best way to gain initial traction and knock your "first 10 customers" milestone out of the park.
The main fear with LTD is providing support to unpaying customers' lifetime.
Yes, they kick-started my business, but still, there's a concern if I could provide value to them for an unlimited time.
But yes the way you treat them is good.
LTD is not for every kind of product.
But if your product has a front-facing element, LTD definitely beats freemium.
Especially if there's significant cost that would accumulate for over-using your service, in that case you would need to implement a fair-use policy, and I find that a lot of people dislike it.
LTD doesn't mean all features with no limits whatsoever.
Most LTD plans/tiers have limitations precisely for this reason.
You make a great case Jay!
But I don't look at it as a funding model. From my perspective, it can be a great marketing channel.
In my opinion, every SaaS product needs that core base of users. Going the LTD route is the fastest way of establishing that critical base.
Yes, no easier way to get your first 100 active users.
You made a good case for lifetime deals. They might be worse considering. I always have been against because, for web based projects, they feel like a bad loan. One where you'd pay interests for the rest of your life, in exchange for some quick money right now.
I understand the bad loan analogy, but what if I told you, in practice, 80% of users will use-churn (meaning not use your product at all after a month or 2)?
And the remaining 20% who continue to use your product for life will wax lyrical about your product to anyone who would listen and actively promote you on social media, because they got themselves such an unbelievable good deal?
Yes that’s a good point. If in practice it is like that, it seems like a really good deal!
Well I can tell you having done 2 LTDs for 2 products, it is like that.
Thanks! Very good to know. I had ruled out LTD for the next product I am working on. After reading your post, it's no longer ruled out! (It's actually in the backlog)
After saying no to LTD for some time I am now looking for opportunities to pursue this, and I agree with the revenue that it brings in.
Let us know how it goes!
Very helpful. Was wondering if I should make a free trial or Ltd for my idea
Just do both.
But market them on different platforms.
Thanks for your sharing. I'm wondering if there has been any comparison of the conversion rates between LTD and subscription?
An interesting perspective on LTD.
I am doing lifetime deals for all my apps.
The cool thing is that I purposely build apps that do not require server to function, for example, games that works offline, desktop productivity tool that works offline. In this way, I am not incurring any server cost regardless of how many customers I have.
Interesting perspective! But relying solely on LTD is it worth it for the long term growth?
Bro
Perhaps doing a LTD during alpha launch is a good way to provide value back to your early users while you work with them to deliver better?
Yes, these days users have so many other options to choose from.
Why do they have to stick with you and give you their time and money?
Only if you give them an offer that they couldn't refuse.
And then maaaybe they'll give you their time and feedback and build you up to PMF.
Hey I totally agree with the LTD stuff but have a few points to add
LTD isn't for all products. Yes, if your product has a non-zero marginal cost, you can't just swallow the cost of external APIs, as they're bound to abuse it.
LTD users are notoriously against monthly plans. They deem it as a huge violation of trust to spring upon them a monthly plan after years of an LTD -- they see it as a bait-and-switch. You can try, but the majority of them will not bite.
Yes, correct. LTD isn't about the revenue, but the ancillary benefits of word-of-mouth marketing and positive buzz around your product.
Thanks for writing. It would be good to cover using appsumo to promote vs not
Yes, that would be interesting. Earlier this year I launched www.omus.ltd which lists 'self hosted' deals directly from the makers, without expensive middlemen like Appsumo. But it was far from being viral, very few people thought "look what a great idea, "fair" lifetime deals you won't find elsewhere", and even SaaS and makers did not promote their deals on omus.
(If anybody with better marketing skills is interested in taking over, let me know.)
My take is that using Appsumo select brings you massive visibility, and the price for that if 70% commission.
And the other conclusion is that very few ltd buyers do care if the maker pays 70% or not. All they want is a good deal.
You'll need to build a large mailing list and a dialed-in paid ad campaign to compete with AppSumo.
Founders aren't going to lit on a platform with low visibility, even if it's 0% commission.
I've done both.
AppSumo you give up a lot more of a cut (50%), but the constant flow of traffic month after month after month cannot be underestimated.
Self-promo I've also done it before.
I promoted on myself in 2 places before, 1. FB private group and 2. my email list.
While I kept most/all of my profits, it's harder to keep a constant traffic flow.
They're more like one-off events, turbo boosts to your revenue.
Low hanging fruits.
There you go.
Be smart, be pragmatic, never rigid, never stubborn.
Be like water.
Thanks for your insight, Jay, I always take it to heart.
Do you have a particular strategy for LTDs when your product is still young? Do you offer LTDs exclusively at launch with no subscription model and switch to subs later? AppSumo deal? Offer LTDs to your mailing list, but keep your pricing page as a subscription product?
There are so many ways to go about this and pricing is tricky. What's worked for you?
No, always offer LTDs side-by-side with monthly plans.
As your LTD sales grow, your MRR grows as well -- I can't explain why, but maybe it's because of the word-of-mouth marketing and buzz.
I never mention anything about lifetime deals on my site itself.
If you don't have a responsive audience (like a newsletter list with >50% open rate), I'll say go with the AppSumo route so you have an idea of what it's like first.
You can always do it on your own once you're comfortable.
That valuable post currently I'm learning mern stack and looking for ideas so what do you recommend
I think it's valuable for a short term, of course.
And if you do great, those people will be your ambassadors.
It's not a bad idea long-term, so long as you ascertain your LTV, and set LTD > LTV.
If the LTD > LTV it's a win/win
I agree.
LTDs are easier to sell and a good way to kickstart your product.
After that you can always transition into subscriptions if it really makes sense!
You can also do both at the same time.
The LTD market and the SaaS market actually don't intersect that much at all.
Most LTD buyers never pay monthly for anything.
If you have to beg people to use your product and give them a lifetime membership so they don’t leave then you don’t have much of a product
Like I said, LTD is not a business model, but a funding model.
No shit, nobody launches with a product that already immediately has PMF.
But to get to PMF, you need to extend your runway by any means necessary, including selling lifetime plans in the initial stage.
Do you even bootstrap!?
Post your app on App sumo.
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