Or why you should have a "Believer" plan
Recurring revenue. Two words synonym to predictable revenue and known for bringing smiles and high-fives to VCs and founders.
Every single tech company I know has a recurring revenue business model. Even the big ones are trying moving to a SaaS model by becoming Cloud-first/ready or whatever bullshit (come on it is 2020 already).
But maybe there is a new business model. The Believer model.
I found out about Roam a couple weeks ago - a company that created a ton of buzz with their #roamcult and having a “Believers” plan. This is not an advertisement of the product and I am not an investor at Roam. But I am a believer.
The premise is simple:
Instead of paying $15 per month or $165 per year, how about you pay $500 for five years? One of the pros is of course the 40% discount but what about the cons?
1/ Will the company still existing in five years? This is a brand new startup after all.
2/ Having access to brand new features before anyone else is cool but is it that cool?
This is a very interesting business model and definitely could spark a new trend.
There are some products that are epic. People love them. They just love them. They are irrationally obsessed with them. These are the believers.
Believers are the people that if you had a heavy metal band, they will travel 5 hours to see you performing a pre-recorded show in a drive-in. These people have a deep connection with your product and they get the maximum value out of it. It might even be part of their identity.
But how can you identify your believers and how to give them incentives them?
Every time I built a Startup, there were some users that were a pain in the ass. Non-stop questions and criticism on a daily basis. My team has asked me giving them a refund and be done with it. But
You never let your believers get away.
People that engage like crazy with your product/brand and are vocal, are your believers. Or your haters.
Believers and haters are separated by a thin line called constructive feedback. Learn how to recognize the difference.
The only way to find your believers is by talking non-stop to your users.
Sending an email every month doesn’t cut it. Keep them in the loop with webinars, twitch broadcasts, previews of new features, asking for feedback etc. The believers are the people that log in the most and engage the most.
An epic idea is something that Roam did with their “cult”. They gave the opportunity to their believers participate in the financial round.
For all of your struggling to raise money, consider this:
A Startup is giving the opportunity to its users to participate in the round. Not only the product is awesome, not only there are customers using it, there are users that love it so much that want to be with you for the long run. People knock on your door to give you money.
Pretty good scenario for fund raising in my book.
No. It is more about the money. It’s always been.
A product is the sum of the value it provides and the emotional connection that has with its users.
Thinking that you can just add one plan in your pricing page and people will flock and turn into believers is naive. Oh sorry, it is not naive. It is actually stupid.
Building a fan base/cult/believer requires that the company is transparent and let’s everyone (that wants to) participate in the decision making. In my opinion there hasn’t been enough innovation in pricing models and more experiments should be done.
Who knows. Maybe you can try creating your own cult and find new ways to make people connect with your company.
Photo by Alice Donovan Rouse on Unsplash
- Sat 11 July 2020
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