
Thoughts on Business Models (from the founder of Sifter) - joshuacc
http://garrettdimon.com/post/10165495142/thoughts-on-business-models
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ssharp
This is an okay list of benefits of a subscription product, but the line "As
long as churn stays low, you’re almost never going to see your income
disappear overnight. With a native app, if people stop buying, you stop seeing
income." left me wanting a bit more.

Keeping churn rates down is critical to success with subscription-based
products, along with keeping customer acquisition _costs_ low, so I'd be much
more interested in hearing about strategies / innovations in those areas.

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garrettdimon
I hear you, but that's way outside of the scope of this post. Every single
bullet point here could almost be a post in and of itself. The logic is pretty
straightforward. With subscription apps, the likelihood of seeing money from
that customer next month is pretty high. With a native app, the likelihood of
seeing money from that customer next month is almost zero.

Keeping churn low has way too many potential variables. The quality of the
product, the benefits or usefulness, the cost, customer support, and dozens of
other things all ultimately play a role. Even the type of product could affect
churn. Is it something that people only need occasionally or something that
they'd use daily?

I honestly couldn't tell you how our churn manages to stay so low. If I had to
guess, I'd say that it's focusing on making a high quality product and taking
extremely good care of customers. We've never had someone tell us that they
were canceling because of the quality of the product or support.

