The Once-Off Startup

A couple of weeks ago I first saw Know Your Company, the new product by the 37signals crew. Since this sounded right up our alley at WooThemes, we’ve gotten a demo. We’ll be signing up and have high hopes for the value that it’ll bring.

The thing that intrigued me most about the product was that it veered away from “traditional” recurring, monthly pricing in favour of a $100 fee per employee once-off. Yep, you read that right: you pay $100 (per employee / seat) only once and you get to use the product for as long as you want or need.

At Woo, we’re a team of 31 now, so a $3100 once-off investment (into anything) isn’t something we just shrug off. 37signals explains that this pricing is designed to get your buy-in i.e. if you pay that kind of money for anything, you’re bound to actually use it.


What has intrigued me most about this though is the fact that the pricing model is swimming upstream. So much of what we know about selling anything digital has a core goal of generating recurring revenue (something I’m chasing with PublicBeta too).

In fact that probably compromises 99% of all SaaS business models. What’s more interesting is that 37Signals was one of the pioneers in shaping the SaaS business model.

When I chatted to Ryan Hoover about this, he said:

“The ‘Once-off Startups’ model is the antithesis of the growing freemium trend where the product is given away for free in hopes that a small percentage of users will pay and an even smaller minority will drive the bulk of the revenue.”

So why step away from a successful recipe now?


My friend Ryan coined the phrase E-mail-First Startups a couple of months ago. Beyond it being a totally fascinating post, it almost heralded the age where we’ll probably see various sub-breeds of different types of (online / tech) startups with various, new business models.

Know Your Company got me thinking about the Once-off Startup and the possible characteristics of this sub-breed:


Those are a few of the characteristics “Once-off Startups” might have, if they were to become more popular within the SaaS and startup ecosystems. Whilst it’s most certainly not a new business model, it isn’t one that we - as a startup ecosystem - have explored in great detail.

That’s not what it’s about for me though; I’m just fascinated to see someone try something new.

Hopefully that inspires a few other entrepreneurs and hackers to conceptualise the next wave of SaaS-related business models.

PS. I’m currently building an online learning community for entrepreneurs and hackers, where you’ll be able to discuss topics, ideas and concepts like this in detail. Join me!

(Thanks to my friends Poornima, Ryan, Jason, Jesse, Nate, Brittany & Stefano for helping me write this.)

 
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