5 reasons why users should pay for your SaaS product
1. The business model ís the message
I stumbled into this phrase in the article “Medium, and The Reason You Can’t Stand the News Anymore.” by Sean Blanda. In this his article Blanda gives his perspective on Medium’s refocus and today’s Journalism.
In short: Medium is changing its focus because its current ad model is not aligned with their original mission: ‘to build a platform that defined a new model for media on the internet’. In fact, making money creates the pressure to focus on quantity. That is unsustainable and unsatisfying for producers, consumers and themselves.
I pursue a sustainable and satisfying business model from the start. For me, that model is monthly subscriptions.
Monthly subscriptions supports what Mbassador stands for. It sends out a strong message that is close to the heart of Mbassador:
Quality over quantity.
The business model is the message. Some even say that ‘business models breed behavior’.
You know what, that actually might be true!
An example… Facebook.
It was fun in the beginning, when you, your friends, and family actually shared what was going on in your life.
Did you notice people using Facebook more and more as a marketing platform for their own messages? Everyone starting to seek attention. People chasing clicks, likes and comments. A messy timeline with unauthentic moments.
Where does that behavior come from?
2. Product validation
Paying customers are one of the best ways to validate a product. There is a huge gap between people who say they will pay for a tool, and those who actually do.
For me having paying customers is a direct way to test these hypotheses:
- Do people sign up?
Do they understand the value of the product, without having used the tool before, and sign up for a paid subscription from the start?
- Do people actually use and value it?
Does the product add enough value over time? Or do people cancel their subscription after a short period?
I’m looking forward to getting to know the early adopters. I want to listen to their ideas, learn from them, and understand their needs.
Launching a paid version creates high expectations. I want to see if my product meets them.
3. Increase user motivation
In this awesome article “5 essential investments every human being should make in themselves”, Srinivas Rao writes the following:
However, it’s worth keeping in mind that when you pay for something, you have more skin in the game. When you have more skin in the game, you’re going to be much more motivated to get a result from your investment.
With Mbassador you keep up a daily journal, write authentic stories and share your precious moments with your friends. Another habit to adopt. Another platform to check out regularly. Another tool to integrate in peoples busy lives.
So, this is going to be a tough cookie!
I need motivated users for that. People who are willing to invest in themselves. To put effort in trying out the product over a longer period of time. To reflect on the value after they have given it a real chance.
In a way, I use my credit card statements for my product reflections as well.
Especially for new products and services. Does this product add value to me? Am I willing to pay for the service? Did I give the product an honest chance or do I need to increase my effort?
4. You get the customers you deserve
This is a hard lesson I’ve learned while being an entrepreneur. Back in 2008 we had to reorganize Concept7. We had a lot of complaints (about our tech solution) and heaps of unpaid invoices. We tried everything to fix the tech, but didn’t succeed. It just wasn’t good enough.
At one point the perfect customer came along. We shared a vision, values and had a really good connection. I mailed them our offer and was instantly hoping they would only go for our design process, not our tech solution. This customer deserved better than our tech. Say what!?
After the reorganization we transformed from an average Internet Company to one of the leading UX-Design Agencies in The Netherlands. Quality was the new standard, the new metric. And wow, did we get the customers we deserved. Awesome projects, long term relationships, and no more unpaid invoices.
It wasn’t easy, but this transformation was one of the best choices we’ve ever made. This was one of the best experiences in my business life.
Back to here and now.
Since the start of Mbassador I always pictured my entrepreneurial friends as the ideal customers. To be able to follow their ambitions, read their authentic stories and support them in their journey. An environment where they can be themselves, create their own magic.
In general, working with entrepreneurial people makes me happy.
I want to help them. Facilitate them with products they love, value and are willing to pay for. I want nothing less than enthusiastic users. Like it’s 2008 all over again!
I am convinced that with a clear vision, a strong message, great values and a quality product I will get the customers I deserve. If other products, such as VSCO, can find tons of paying customers who care about quality, than so can I!
5. Daily focus on sustainability.
All roads lead to Rome! Well, to be honest, most startups aim for the moon. Build a Unicorn as their rocket, disruption as their navigation and VC-money as their fuel. Let’s call this the Silicon Valley way.
My Rome is the Basecamp way. Bootstrapped, profitable and proud.
But even if you know your destination, you still have to choose your own path. My path is called Fundstraping. It is like Bootstrapping, but using funding to build the MVP. In this article “Six Paths to Financing a SaaS Business“ you can find a map of all Funding paths.
In the end my path leads to a sustainable business. I want to chase value, not valuation.
Having a business model that is a direct contribution to this ambition is awesome and a daily reminder of the bigger picture.
Big cheers for every new and every current user.