What we got out of it, however, is a ton reviews and engagement from paying users (before that, it took us 2 years to get to ~400 paying users and AppSumo got us to almost 3000 in a few weeks).
Launching on AppSumo is great. The whole experience is fantastic and their team is on point.
I just don't think it's worth it if you're only in it for the cash though. You need to consider the strain on systems, the additional costs and the delay in getting the commission.
Basically, you're opening a new restaurant and "GroupOn" is offering to send you 2,000 diners on opening day. You're going to have to order a ton of food, bring out more tables, hire a bunch of waiters. This opening day, if it's successful, can drain your entire funding for the restaurant. And then you have to wait 60 days + end-of-month to get paid the discounted rate from those diners (minus the platform's commission).
If you survive it, you get to have a successful restaurant with many happy diners talking about it.
It is worth it. But not for the money.
Finally, "just get 2000 users" seems like a bit of a hand wavy exercise. Getting even 5 paying customers is in my opinion, no small feat.
Learning that helped me understand this message and I think it’s a good point.
70-80% commission to AppSumo and up to 40% to affiliates sounds crazy if you want to fund growth from customer revenues. Sure it works if you have venture backing but totally self funded?
Many founders build products and features in vacuum, not knowing whether they are relevant to any kind of customers.
This growth model is not a long-term strategy, but a form of letting people vote with their wallets to build a foundation to further improve from.
Lifetime deals are also only compatible with software products that have negligible costs.
I'm gonna let you know on a secret that's not a secret.
if you bootsrap - you live in the world where you can charge <~$100 a month. the so called 'middle market' doesn't exist.
ideally your market exists within your domain knowledge - i.e you have an edge. not something easily discoverable by anyone. since competition drives profits to 0.
shut up and make money. then make noise when you're at such as stage people can't touch ya e.g the Basecamp guys.
The LTD idea misses one point that could apply to a larger (most?) subset:
Let initial LTD customers be patrons that have insider view and an active role in the product development and roadmap.
Early adopters would love this opportunity, if they buy into your vision. Some might even perceive more value in the product influencer / insider role than the MVP itself, at first.
I've seen that a lot of bootstrapped recommended starting with LTDs and I decided to try this approach. Sure, in the beginning, I got a bit of money, and surely it's easier to convince somebody to pay $50 once (i.e. LTD) compared to $5/month. So right in the first months, I've gotten approximately $1k/month with very little promotion, which is nice.
However, as the user count grew I also started to feel an increase of pressure. The cost of running my app is very low, so cost wasn't the issue, but I felt a bit like a fraud. What would happen if I decided to discontinue the product? Refunding 100 customers would have been painful, but still doable. However, as I kept increasing the user base, so were my concerns about how to handle a worst-case scenario.
Furthermore, offering an LTD for a product that still needs to grow means partially that you are making a promise about the product you want to build. What if you decided in the future you wanted to pivot? Sure, you can disregard your users who bought the LTD thinking they would get a certain product, while you decided to build a different one, but personally I didn't like that idea, and once again this increased my stress level.
So, all in all, I didn't like it too much and decided to switch to a subscription (although fairly low). Nowadays I feel much better with the overall revenue model. A user doesn't like the product? They are free to leave after one month, and nobody has different expectations about that. At the same time, I came to discover some additional benefits compared to an LTD:
- users are more engaged with your product. In a way, with a subscription, they are deciding every month whether your product makes sense for them, and they will be more vocal about what they need and don't, which is very useful feedback as a founder. Plus, churn data can tell you more accurately if you are improving your product or not.
- to my surprise, my conversion rate didn't change (it might even be slightly higher than with LTDs). My guess here is that buying a LTD still involves a bit of trust in the founder/company which, if you don't have a large following on social media, it might be difficult to get upfront. Overall this has been a painful lesson, as I realized that if I started with a subscription right from the beginning, I would have a much greater MRR by now.
- best of all, I see my product growing sustainably now. Every week/month is a little better, and I don't have to worry every month about how to reach a certain target revenue (of course, with LTDs you start from zero every month). Overall, I feel I'm building a product for the long run now and towards being a profitable business (still getting there).
So all in all, I don't know if I would recommend the same approach as the author describes. Sure, I've seen people executing it well and effectively bootstrapping their app in a short time, but my guess is that happens if you have a good base of followers and you can kickstart your marketing channels too. Also, if your product is sustainable as a one-time purchase (e.g. a desktop app, a content piece, etc.) then LTDs are definitely more attractive, but I don't see the point of trying to build a SaaS without having a feedback if your users are really willing to buy a subscription form you.
