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Nick from FirstHR
Subscription or one-time payment. Which should a startup choose?
There was a lot of talk in 2023 and 2024 about startups using a one-time payment model, but earlier this year, I started to see founders going back to subscriptions. What do you think?
Replies
Best
Rajiv Ayyangar
I've never understood the case against subscriptions. One-time payment means the maker has no plans or incentives to build a sustainable business and keep improving the product. If you're trying to build a business, one-time-payment seems patently insane to me.
Nick from FirstHR
@rajiv_ayyangar I completely agree with you, but a huge number of "Twitter experts" say the subscription model is dead, and judging by the comments, many agree. But again, I don't see how you can grow a company without a subscription. One-time payments are great for selling training courses, and apparently the people who were selling courses moved that model to SaaS, and that's how the rest of us learned about it, I think.
Nick from FirstHR
In my opinion, the choice of model depends entirely on your costs. If the growth of the number of users increases your expenses, then only a subscription. And if not, then you can use a One-time payment model.
Zhiqi Shi
I think an important factor to consider is the cost structure of the business. If it's a one-time investment, then a one-time payment model makes sense. However, if there are ongoing costs, a subscription-based model is clearly more suitable.
Filip Panoski
Here are my 2 cents: One-time payments work well for high-ticket offers. For low-ticket offers, you can provide multiple one-time offers that would encourage users to repurchase from time to time, mimicking recurring revenue. Subscriptions are great to have a viable long-term business, but some offers make more sense as a one-time payment; so depends on what you're selling.
Nick from FirstHR
@filippanoski I agree, everything depends on the business and its costs.
Tasos Valtinos
Launching soon!
Strange, I was thinking about this today and I read a nice article from Marc Lou about this. I would say for early stages, especially during validation phase (PMF) it would be better to have an one-time payment to your product. That way, you can validate and generate revenue fast. Especially as a solopreneur, giving let's say 7 days of free for your app and then one time payment is more attractive in my opinion. It is better to see your card charged once, than once every month.
David Popescu
I think it depends on 2 main factors: 1 - How much will your users utilize your product. If it’s daily or weekly, a subscription would be ideal for both the user and the business. For other cases, one-time payments may be better 2 - What is the goal of the product. If it exists just to make some money upfront, a one-time payment may be a good option. If you want to take your startup to the next level, have VC funding, do an exit at some point, subscriptions may be better.
Grant Oganyan
On average, you can summarize this as such: subscriptions are business friendly, one-time payments are consumer friendly. Afterwards, its up to you to decide your own priorities.
Alex Bradley
There is also a 3rd option of a usage based model, I know this is something being discussed more widely as the 'death of SaaS' and I know Satya Nadella was proposing this is the future based on integrated systems and AI usage, so perhaps another possible option to consider?
Nick from FirstHR
@alex_bradley6 I also believe in this model, but the model is very young, although I saw it in Apollo and Clay.
Tania Bell
that's a great question, @nickanisimov. it's hard to believe today but subscriptions were an innovation in tech a couple of decades back. if history is any guide, they're (over?)due for a disruption. one reason - ppl are getting tired of paying the 'equivalent of a cup of coffee a day' many times over. it's great for the companies that have the market but not so much for the consumer esp. when the product doesn't or doesn't need to be changed all that much another - when done in a smart way, there's an opportunity to disrupt some of the big guys in juicy industries b/c they can't outcompete a very attractive proposition of a one off payment. the choice for any startup pivots on what biz model they're going with and whether they have VC funding. VC love subscriptions and wont' be that interested in one off payments. as for the biz model, you've got to factor your pricing model from the off to have a chance of being a sustainable biz if you're going with a one-off payment model.
Jennifer Nechanicka
Launching soon!
I feel like it depends on the operating costs, if your product has a generally low overhead then it could be smart to do a one-time payment but if the overhead costs are quite expensive then a monthly subscription would work better. Personally, my product is quite complex and requires a lot of upkeep, storage, data analysis, plus the constant shipping of new features, so we went with a monthly subscription. Whatever makes more sense in terms of cost in your case!
ash avale
Overlord,a plugin for after effects uses one time payment model with 1 year worth of feature updates which you can renew if you want the next major update. so there is case to be made for one-time payment services.
Jose Tapizquent
Depends on the goal of the product and long term vision. If your system requires an ongoing cost, even if small, subscription is probably the way to go. This allows for RR and give you more flexibility to expand, add new products and more
Shivam Singh
I think subscriptions are making a comeback for good reason. With recurring revenue, you build a more predictable income stream and a closer relationship with your customers. It also gives you the flexibility to continuously update and improve your product. That said, if you’re offering something more static where ongoing support isn’t as critical, a one-time payment could still make sense. But for most startups, subscriptions offer a more sustainable model as it builds even longer and better realtionships with users. @nickanisimov
Fahad Mehfuz
@nickanisimov Totally agree that the choice depends on costs, but I think user psychology also plays a huge role. Some people hesitate at subscriptions, but they’re fine with occasional one-time payments. A hybrid model—like a low-cost subscription with optional one-time add-ons—could balance revenue stability with user flexibility. Curious if you’ve seen any startups successfully pull this off?
Nick from FirstHR
@fufuman13 Interesting idea, by the way, I really like it. I haven't seen such startups, but I'm sure it can work.
정현 박
It's better to start with a subscription model first and then gradually introduce one-time payment options as an additional offering.
Purnima Sharma
A subscription model works well for businesses that offer ongoing value like software or content.
Suyash Handke
Some startups use a hybrid model, offering: Subscription + Lifetime Access Option (e.g., pay monthly or one-time for lifetime access). Free with paid add-ons (e.g., freemium model like Canva, where users pay for premium features). If your startup provides ongoing value, subscription is the better long-term strategy. If the product is more of a one-and-done purchase, a one-time payment makes sense.