Curious if any HNers are running successful businesses selling desktop/downloadable software with a one-time payment model - not SaaS, not subscriptions. Something like the old days. How's the market for that? What's your experience with support and updates?
Readit News
Customers in the US and Europe hated the usb, especially during COVID. In random places of Africa, where they greatly valued the single perpetual license, it persists. From my perspective, I don’t see anything positive from being an installed application for this use case - he had to hop through so many security hoops that when he rolled out the web solution IT departments breathed a huge sigh of relief and thanked him.
Over a period of about 2 years he converted almost everyone to saas and 4x’d the annual revenue. That also generated enough fcf to hire more developers to ship more features.
Saas is generally the way to go. Installed apps are common in financial services and industrial applications. I can think of a bunch of other niche examples but I personally would never pursue this model. We put bugs into production from time to time and it is nice to be able to instantly roll out updates.
The business reality is often not understood by the users and that's why every company is moving towards SaaS, it allows the company developing the product to continue to stay in business rather than providing a product then shuttering because it couldn't sell enough.
The former is simply more sustainable than the other, much as some (like the vocal minority) might disagree with this fact.
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That being said, there are many who sell one-time licenses, especially in the indie hacker space on Twitter, such as NomadList and BoltAI. Their model works because they make enough money from their products to retire on, as solo devs, and their products aren't necessarily ones that require constant updates (well, maybe BoltAI as new AI advances come out all the time that need to be implemented, such as RAG, parsing PDFs, storing "memories" like OpenAI, etc, but most advances come through new models, which is just an API call away).
I understand that updating software takes manpower. Same for running servers for sync or online information or similar.
But I might rather pay once for something that works on my machine as it is now. I need no servers or sync. If I need an upgrade later, I’ll buy it.
I do buy some software as a service but for other software if there’s a subscription I just don’t buy.
This is a bold and not necessarily true statement. It really comes down to your target market. A SaaS is a much less disputed cost when it's targeting businesses but you're much more likely to encounter resistance to a subscription when you're targeting individual consumers.
There is plenty of highly successful mainstream modern day software that offers a perpetual license for one time fee. (DAWs come to mind: Bitwig, Reaper, Logic X, Studio One, Cubase, etc.).
Personally, I think a good compromise is the annual subscription with a fallback perpetual license, a.k.a. the Jetbrains model. I've never had an issue with paying a reoccurring subscription fee, but I take great issue with the proposition that the moment I stop paying I lose all access to the software - it's too close to rent seeking.
It's due to a-hole fatigue. These are too often just VMs running an installed solution in a 3rd party cloud, run like garbage and cost way too much. There are just too many vendors in the middle to get any expectation of a good experience. And to top it off, every time I buy SaaS the vendor is bought by some private equity giant before the first payment and the product turns to shit by the second one.
That said, it depends what the software does. If it's a platform for sharing or interacting with the public (e.g. eBay), then a true web app makes a lot of sense to me.
Nitpick: I think you mean “demurrage”: https://www.investopedia.com/terms/d/demurrage.asp
But indeed, web is typically the most flexible option unless you are leveraging something on the OS that would otherwise be cumbersom or impossible via web (not often the case)
Dead Comment
In the 90s, a large driver of recurring revenue for software was that when the OS and hardware landscape changed, you made a new version of the software adapted to that change, and then, if customers wanted to upgrade their OS or hardware (frequently for reasons unrelated to your product), that made them come back to you to pay for the new version of your product. Under the new legal regime, you would be forced to give them the update for free, so if you sell an actual perpetual software license, you have a fixed amount of revenue on one hand, and a potentially unlimited liability to incur additional costs on the other.
Does this include new layers for games, so that customers don't get bored? More seriously, this law is probably targeting big US companies. But smaller companies are suffering the most.
As an open-source project in a niche market, establishing a sustainable development model has been challenging. I set the price at $10, which gives users privileged access to feature requests and effectively makes them stakeholders in the project's future direction. While I acknowledge this might seem high for open-source software, the development costs and ongoing maintenance require significant resources.
So far, I've sold about 60 copies. After platform fees of roughly 40%, the revenue covers only a fraction of the development costs. Some users have criticized this as "money-grabbing," but they may not fully grasp the complexity involved in creating such software from scratch. The development process demands meticulous attention to various aspects, including accessibility features, elegant design implementation, and cross-platform integration.
Maintaining my dedication to the project while seeing modest financial returns has been challenging. There's constant pressure to add value and justify the price tag, which is leading to burnout. Finding the right balance between making the software accessible to users while ensuring sustainable development has proven to be a complex challenge.
The path of independent open-source development, while rewarding in many ways, comes with its own set of unique challenges that aren't always visible to users.
This isn't an easy path to follow.
Source code here: https://github.com/losses/rune
As the software is of the nature that it will require updates indefinitely (as OS updates come and go), and given the fact that the license is specifically for commercial use, I decided to go with a subscription model instead of a one-time payment model to ensure its long-term sustainability.
I am lucky that this specific software is very "sticky" and already has a die-hard fan base. It also helps that people in the Windows ecosystem are used to paying for commercial use software licenses.
This month to date I have made $800 on license sales. It will be interesting to see how the license sales continue to progress (or don't?) throughout the rest of the year.
I have been very clear with the community from the beginning that this is software that I develop first and foremost for myself - new features and bug fixes get prioritized largely according to this.
Additionally, support is not offered as part of the commercial use license and is largely community-driven. Nevertheless, I still spend many hours a week helping out both personal use and commercial use users.
One time payment since it runs whisper locally. Autoupdates through the app store, and I have a lot of folks emailing me positive, negative and improvement feedback.
It is a lot of randomness. Some weeks are low and when it got a small mention in a popular article I saw a sudden inflow of traffic, downloads and purchases.
So far Ive been ok paying the apple tax. Its a little hard going through the hoops to get it through the app store( I kinda understand why they do a lot of it ) but it provides a lot of free discovery and I spend 0 time on payments, refunds, disputes, handling a CDN to distribute binaries etc. Negative reviews without basis are the only thing that bother me, for some reason I seem to take it personally.
I follow the “perpetual license with one year of support/updates” model. So far it’s working great. My customers love it as they’re in control of the software. Some users can run BoltAI entirely offline.
But I’m adding the subscription soon as this model is not sustainable when I’m adding other cloud features such as cloud sync and other collaboration features.
I think the pricing model should reflect the value and cost of the product. If it’s more on the software side (think winzip or other smaller desktop widget where there is no or low operational cost), it should be one time payment. If it’s more on the service side (cloud sync, collaborative features, fast changing niche where you need to update the product constantly…) then it makes more sense to charge a subscription.
But the tricky part here is that potential customers might not see it that way. Many assume it’s just like another desktop app, therefore it has to be one time payment. So in my experience, I’d start with no cloud feature and offer a perpetual license. Then I’ll add a subscription and with other cloud features. Basically 2 different offerings.
[1]: https://boltai.com
Many people have told me to switch to subscription but I just don't think it's the "right" thing to do with a desktop GUI app.
https://prompt.16x.engineer/
The irony is in my day job I am developing a traditional downloadable Windows application which will come with an immediate user base. But although I have considerable discretion over the project, it isn't mine (in an intellectual property sense), and I'm not getting rich off it.