Semi-rhetorical question: why do customers accept something like this delivered in SaaS form? It seems so antithetical to customer obsession when this is the exact type of problem that lends itself well to a locally running application.
Why not deliver this as a desktop application that users download and pay for one-time? There’s absolutely no need for an ongoing subscription to a backend service here. Outside of rent-seeking.
All fair points, a mix of which some focus on customer benefit and others on benefit to the business. Perhaps the motivation behind my question was wondering whether there’s an opportunity to eat SaaS margins with products that compete by changing the distribution, and whether there’s any market data to support that hypothesis.
1, 4, and 6 align with the customer. 4 could be alleviated even with a local application a la Sublime Text. I concede 6 is marginally easier to manage, but then again represents a con from the customer perspective in that the software they’re using could disappear at any time since they don’t own it.
JetBrains model seems to represent the best compromise to the customer here: subscription fee for constant updates and support, cancel anytime and keep your current version with no updates or support.
2, 3, 5 benefit the business, not the customer. In fact 3 is probably the most beneficial to the business in that cost of support and maintenance isn’t aligned, they’re decoupled! Hence the 70-80% margins this company is touting.
5 is brutal as csallen said, but then again there are counterpoints to this in that people will certainly pay and not pirate for the right experience: iTunes, Kindle, etc. even when the pirated versions are readily available.
A subscription as opposed to an upfront one time payment allows them to pay on a timescale that more accurately reflects the value they are receiving. This is generally a good thing.
Renting is often exactly what businesses want to do. They have better uses for their money than pre-purchasing all of their future expenses. They rent office space, lease cars, pay salaries fortnightly instead of at the start of the year, pay for their inventory not only as they receive it rather than in advance, but often on terms of credit. Software doesn't have a reason to be an exception to this. If I can pay $X now or $X spread over a number of years, I'm going to pick the latter.
The payment terms of a product are effectively part of the product itself. I'm in sales and I've won and lost deals against comparatively priced competitors on the basis that my/their pricing schedule better matched what the prospect wanted.
I took renting to mean just ongoing payments by the way. If you meant rent seeking as in the concept in economics then 1. this isn't it and 2. using IP law to prop up the value of locally installable software would be a closer example of it than doing so by keeping some of the code under your own control is.
With this specific product, I would argue that being OS and desktop independent is actually a feature. I can imagine that a significant amount of the users might even upload the videos to their social media profiles from their phone.
The choice is between maintaining 2 mobile apps + a desktop app that is compatible with macOS and Windows and maintaining a single webapp.
It looks to me like the video isn't "trapped" in their app - in fact it's intended to be uploaded elsewhere? So once you've used it, you only need to continue paying if you're continuing to use it.
That's the opposite of rent-seeking, that's .. charging money for a service.
The one time purchase could have been, let's say, $20, but if I want to use it a couple of times, paying $5 per month might be a better deal. And you're always getting the latest version
One-time fee means that you pay more money upfront. Plus you have to install it, which is both a security issue and unnecessary hassle if you don't like it and need to uninstall it. If you change your machine you need to reinstall the app. If you need it from more than one location (home, office) you need to pay for more licenses. Support is way more complicated for desktop apps. And then next year they release a new version of the app, and you need to pay for the upgrade, so it's pretty much the same dynamics as annual subscription.
To me the easiest answer is that they are leveraging FFMPEG which is GPL. If they had embedded it in a mobile or desktop application they would have had to release it as open source.
The main point people make about differentiating your digital product is to not compete on price. A lower price means less money for advertising and marketing, so a losing proposition.
What you're proposing with the one-time upfront fee model is to compete on price, so smart entrepreneurs steer clear of that model.
I like SaaS but one time has the advantage of being able to use more money on growth. So if you have your acquisition dialed in it can be advantageous to offer a larger annual or lifetime model.
I made something like this once for a podcast. FFMPEG is a godsend. Essentially I took a video (could just be the logo image made into a video) and looped it to the length of the audio track. Essentially it just called ffmpeg with the right parameters. The process only took a few moments and gave me a video I could upload to YouTube.
Back then I was really surprised that I couldn't find a service like this. Had I found one I probably would've used it.
Maybe your takeaway is right but there's also a huge piece that wasn't captured in your one-liner
"We lost about 2 years of our time and $30k of my savings (which was most of it). "
"Getting those first 10/100+ customers was really hard. We relied primarily on direct outreach via cold email and social media messaging to obtain those first customers. Taking the time to reach out directly to customers for a $7/month plan was painful"
that's because all of that goes without saying (since I assume that the typical hn reader already knows about 1. pivots being costly 2. the early adopter grind). those points aren't key features of their succuss either because every startup experiences those pains.
Sure! Previously, podcasters and musicians didn't have a very engaging way to share audio on social media. We built Wavve so creators can easily convert audio files into a branded video with an animated waveform. Here's our Twitter and Instagram accounts with some examples of what's possible:
I did not catch what the animation was. I thought it maybe was some sort of power point swipes between images from the studio or something.
That sounds tacky but I remember watching a clip from a Bill Burr podcast where he talked about super rich middle easterners bringing their gold Ferrari’s to London. It had a slide show super imposed with pictures of such cars in London and it Really helped bring the story to life.
Probably possible, but what would be the advantage? I know for instance using something like Google Speech to Text API is a lot more accurate than Web Speech API.
The advantage is reduced server costs + more efficient use of computing resources in general. I personally am always happy to offload processing to the client side wherever possible.
With wavve, I instantly see how the shared clip will look like. I can even scroll down to the social media links and see a lot of examples directly in instagram / twitter / facebook.
If you wouldn't mind me asking, what's your revenue? Follow-up question: what most likely makes for the difference in revenues between 0work and Wavve?
They're enabling a lot of people to do something they couldn't do otherwise. And they've convinced those people to give them money to do it for them. The most core form of a specialised business.
Readit News
Why not deliver this as a desktop application that users download and pay for one-time? There’s absolutely no need for an ongoing subscription to a backend service here. Outside of rent-seeking.
1. It still provides more value than the monthly subscription.
2. People have shown a greater willingness to pay for ongoing features and support in a SAAS model than in other formats.
3. It better aligns with the costs of support and maintenance that the provider needs to provide.
4. It's less risky for the consumer to get started.
5. There's no piracy or people decompiling your app and putting it out under their own name.
6. No updates to fiddle with and works across machines.
Not all answers above directly apply to the podcast->video service here but these are the general reasons.
1, 4, and 6 align with the customer. 4 could be alleviated even with a local application a la Sublime Text. I concede 6 is marginally easier to manage, but then again represents a con from the customer perspective in that the software they’re using could disappear at any time since they don’t own it.
JetBrains model seems to represent the best compromise to the customer here: subscription fee for constant updates and support, cancel anytime and keep your current version with no updates or support.
2, 3, 5 benefit the business, not the customer. In fact 3 is probably the most beneficial to the business in that cost of support and maintenance isn’t aligned, they’re decoupled! Hence the 70-80% margins this company is touting.
5 is brutal as csallen said, but then again there are counterpoints to this in that people will certainly pay and not pirate for the right experience: iTunes, Kindle, etc. even when the pirated versions are readily available.
I appreciate your response.
Renting is often exactly what businesses want to do. They have better uses for their money than pre-purchasing all of their future expenses. They rent office space, lease cars, pay salaries fortnightly instead of at the start of the year, pay for their inventory not only as they receive it rather than in advance, but often on terms of credit. Software doesn't have a reason to be an exception to this. If I can pay $X now or $X spread over a number of years, I'm going to pick the latter.
The payment terms of a product are effectively part of the product itself. I'm in sales and I've won and lost deals against comparatively priced competitors on the basis that my/their pricing schedule better matched what the prospect wanted.
I took renting to mean just ongoing payments by the way. If you meant rent seeking as in the concept in economics then 1. this isn't it and 2. using IP law to prop up the value of locally installable software would be a closer example of it than doing so by keeping some of the code under your own control is.
The choice is between maintaining 2 mobile apps + a desktop app that is compatible with macOS and Windows and maintaining a single webapp.
That's the opposite of rent-seeking, that's .. charging money for a service.
I'm happy to do a free trial, and have it instantly accessible on all my devices that have a browser and etc.
Because when given the option, sellers usually choose more money than less money.
Anyone is welcome to create a competing product and take their margins.
The one time purchase could have been, let's say, $20, but if I want to use it a couple of times, paying $5 per month might be a better deal. And you're always getting the latest version
Your second (main?) point: "no need" / "rent-seeking" is addressed well by michaelbuckbee, particularly point #5.
Also maybe there could be automation with this service that saves time?
What you're proposing with the one-time upfront fee model is to compete on price, so smart entrepreneurs steer clear of that model.
Back then I was really surprised that I couldn't find a service like this. Had I found one I probably would've used it.
"We lost about 2 years of our time and $30k of my savings (which was most of it). "
"Getting those first 10/100+ customers was really hard. We relied primarily on direct outreach via cold email and social media messaging to obtain those first customers. Taking the time to reach out directly to customers for a $7/month plan was painful"
https://www.instagram.com/getwavve
https://twitter.com/wavve
That sounds tacky but I remember watching a clip from a Bill Burr podcast where he talked about super rich middle easterners bringing their gold Ferrari’s to London. It had a slide show super imposed with pictures of such cars in London and it Really helped bring the story to life.
You can capture video and download it from canvas: https://developers.google.com/web/updates/2016/10/capture-st...
And it looks possible to add separate audio to it: https://stackoverflow.com/questions/39302814/mediastream-cap....
You could also recreate the waveforms and add to the canvas: https://developer.mozilla.org/en-US/docs/Web/API/Web_Audio_A...,
Not widely supported, but you could try to add speech recognition too https://developer.mozilla.org/en-US/docs/Web/API/Web_Speech_...
With wavve, I instantly see how the shared clip will look like. I can even scroll down to the social media links and see a lot of examples directly in instagram / twitter / facebook.
Or maybe it's a good thing because it means a stupid simple idea can make you a millionaire