app business model

I had not heard about this model before, apparently it has been in use for a while by Sketch on macOS and Framer.

  • the app is freemium forever and offers premium features that can be unlocked via purchase
  • this one-time purchase includes all current premium features as well as new ones released in the twelve following months
  • all features ‘collected’ from that period are available forever, the customer can choose to purchase again when there are enough new features that feel worthwhile; there are no major point release pressures for anyone.

Love how it’s kind of gameified and features are presented like powerups that have a little profile with name/picture/description.

They had to write their own license server to create an integrated experience.

From the customer’s perspective, we see these pros:

  • Not only can customers trial the app for free, they can keep using the base features as long as they like (à la freemium).
  • The latest version of the app is available to everyone, including all bug fixes. Nobody need be ‘stuck’ on an older version.
  • The customer is not locked into a subscription to keep using the app. The features they have already purchased are unlocked forever.
  • There are no major upgrades, forcing customers to pay to keep using the app. Customers can decide whether new features warrant a new purchase, and keep using the latest version even if they decide not to upgrade.
  • When a customer makes a purchase, it is clear what they are purchasing: access to a concrete set of premium features.
  • Agenda can be downloaded from either the Mac App Store, or the Agenda website, and the customer can switch between the two variants while maintaining their existing license. For example, you can purchase via a download from the Agenda web site, and later install via the Mac App Store.

And from the developer’s perspective:

  • As with subscriptions and paid upgrades, a single customer can generate recurring income for the developer.
  • The development team is not forced to disappear for 6 months to develop a major new release. The app is continually evolving, with new features and bug fixes.
  • With no major updates, there are no opportunities for large scale customer disappointment being reflected in a wave of poor reviews and negative feedback. Updates are spread out, as are customer purchases.
  • Customers who do not immediately purchase are not necessarily a lost opportunity. They can continue to use the app for free, and may be tempted to purchase in future by newly introduced features.
  • It is quite easy to incentivize customers to help spread the word. For example, we could introduce bonus time for referrals. If a customer referred someone to the app, resulting in a new purchase, the referrer could receive an extra 3 months of premium features. You can conceive of many variations on this theme.
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