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On the Subscription Company

#business #start-ups

Modern day technology companies try to do too much. It’s a combination of a variety of factors, but, two notable ones are the entrepreneur’s enthusiasm for world domination (which is admirable) and the incentive structure created by the implicit return objective of capital injection.

Entrepreneurs are some of the most passionate souls on the planet and deserve a day of recognition each year for the world they have built for humanity. Their enthusiasm to cross the chasm of the unknown to deliver an deflationary economic solution is inspiring and rightfully deserves high praise from our culture. However, from time to time, it is delightful to imagine a return to a structure of business that delivers products with less social functionality, artificial growth incentives or deceptive simplicities. What I mean by this is: embracing a philosophy of products that are simple, do little but do them well without an underlying motivation to juice a KPI or metric that eventually ties back to extracting as much return as possible from an underlying user. These metrics, when taken to extremes, dehumanize and disrespect an organization’s underlying customers. I’m sure I will be wrong about this, but I think business at its best is about serving people not increasing numbers. Of course numbers are measurement for objectives, but I’m afraid that what gets measured really does get managed at times, and at times that can mean losing really meaningful individuals who love your product or business.

The Mainstream Conjecture: The degree to which a product or company attempts to collectively please everyone is proportional to the loss of passionate engagement from its customers.

In the ideal, software stays the same for a long time with incremental upgrades as needed because it is performing its job as it was meant to. It is curious to me that, the more proximal a product is to the axis of free and entertainment driven the more often it tries to change. What I am suggesting in this is to consider leaving your software product alone. Stop tweaking it to death. Stop adding one more feature. Stop changing it from under your user’s feet. Stop re-packaging it up with a new bundle of offerings; and stop re-designing the thing to death. While it sparks enthusiasm in some, it is exhausting for others.

German software companies shine in this regard scoring highly on what I will call the “leave it alone” axis of software value. Examples such as Things3, a cross Apple ecosystem TODO app, Ableton Live, a full suite of digital audio workstations tools, and Native Instruments, a hardware and software VST provider, represent a small selection of software products that are thoughtfully designed, built, launched, and perhaps most importantly: left alone for a while to do what they are meant to do.

This idea of “leave it alone” software might sound petty, but just try to image a world with it. Imagine if your TODO app were not trying to position itself as world changing and instead was just holding a list of things you didn’t want to forget. Your note taking app were not trying to feature ransom you into purchasing a $1.99 subscription service to write in a format that you’d like, but rather, was invisible to you enabling the capture of inspired ideas or concepts on the go. The online file storage provider you entrust your documents with is fully dedicating their attention on the security, integrity and privacy of the files provided, instead of an ecosystem “value add” to keep you “locked in”. Alas, this is not the current state we live in, and that’s okay but perhaps it is time to reconsider how we think about software products (and perhaps it is not!).

This is not meant to imply I think all software should be free. No, I think software programmers, designers and product managers are sensitive crafts workers who earnestly put their creativity and heart into the products they build. Furthermore, like any crafts person who puts their time towards making something beautiful for the world, they deserve the dignity of asking a wage from it. Moreover, the entrepreneurs who builds the capital structure to support the deliverance of these beautiful works are in full right to ask for a form of compensation as well. But, the modern day software as a service business model feels like a net cultural negative for the present day technology user.

Undeniably the flexibility gained for organizations and customers of canceling on the fly, low capital expenditure into technology, and the alluring free trial before purchase are seemingly positive. Yet, in the end what it means is that no one owns anything anymore. The idea of lease on an apartment is simply extended to all facets of modern life. You don’t own your music library, you lease it. You don’t own your e-mail platform, you lease it. You don’t own your notes or photos, you lease them, or at least the tools to view them. There are more business models that subscription based revenue!

Perhaps I am one of a few who is disturbed by the complexity, coupling and fragility this creates in critical business infrastructure to stable and expected accounts receivable, and derivatives created thereof. That may just make me an individual who is out of the loop or maybe one who is forgotten by the history - and hey that is okay! That just means I am wrong.

But, if I was not the only one out there who frequently feels exhausted by yet another tiered recurring product pricing model for access, if I was not the only who would prefer to pay $49.99 for a complete full license to the software product to do with what I’d like, instead of yet another $3.99 per month credit charge, if I was not the only one who preferred a product designed with simplicity and balance in mind rather than complexity, overwhelming size and recurring monetization - could this represent an opportunity to serve the collective?

What if we could build an organization we wished to see in the world and aspire to abide by these principles to the best of our ability? Should we fail because the market has determined our capital structure to deliver products is obsolete, then we fail: nature is amoral to some and markets are natural forces. But, at least we tried right? We may as well see if a world like that could exist even if it doesn’t work. Let us call this type of organization A Subscription Company, if only for the irony and fun of it. For that is what life and business should be: good fun, good service, and good work for people we care about.