Last week I shared with you an interesting trend that I’ve noticed in the productivity industry: more and more productivity apps are using the color purple as their icon. I know, it’s a game changer.
That means instead of paying a one-time fee, you will end up paying every month or year to use your favorite productivity app.
Just look at DayOne (our favorite journal app), 1Password (password manager), TextExpander (faster typing). They all started as one-time purchase apps but have since moved on to a subscription model. This is a trend that’s happening right in front of us and I expect more apps to follow.
The day after I emailed you, Ulysses, a popular writing app, announced that they moved to a subscription model too.
The developer and co-founder of Ulysses shared on a Medium.com post why they’re moving to a subscription model. He says:
“Our users expect a continuously evolving high quality product — and subscription is the only way we can truly deliver on that expectation. We want to make sure the app will be around for years and years to come. We want to heavily invest in its development, and this requires the right setting for our team, our families and our users. Writers want to rely on a professional tool that is constantly evolving, and we want to keep delivering just that.”
It’s a worthwhile read to understand how app companies make money and how most struggle to stick around.
The short version is this: as of now app companies really only make money when they release new versions of the app. It generates a huge spike in sales that will give them enough to eat and then work on the next launch.
This feast-and-famine approach is very common among new businesses. Heck, Asian Efficiency was like that in its initial stages.
The problem for app companies is that they’re being forced to focus on launching something new every couple months. Every launch must have new features or something radical to make it worthwhile for existing users, like you and me, to upgrade. This oftentimes leads to rushing things, lots of bugs, bloated software and over time an inferior product.
This is obviously not sustainable.
Founders of app companies are starting to realize that this model doesn’t work and are slowly moving to subscription models.
But here’s a bigger trend that will force app companies to adapt to the subscription model.
It’s a trend we’ve noticed around early 2015 but we didn’t really talk about it with you until our podcast episode “8 Productivity Prediction for 2017”. Mike and I pretended to be nerdy fortune tellers and we made bold predictions about the future of the productivity industry. So far we’re 5/8 and we still have a couple months left.
One of the predictions came true and it’s this: more people are moving towards a cross-platform solution.
Now that Microsoft is stepping up their game again and Android has become more popular, we’ve noticed among our customers that a lot of them use a combination of Apple, Microsoft and Google products.
One might have an iMac at home, Windows at work and an Android phone.
We started to notice this in early 2015 when we kept getting questions from OmniFocus users “what do I do when I use Windows at work and I have an Android phone?”. I answered a lot of these questions on the blog and they also happen to be one of the most popular posts of 2015 and 2016.
When I look at our private forum in the Dojo and its associated Slack channel (where our members can interact with each other and our team), I see the same thing. The majority of people use a combination of Apple, Microsoft and Google products.
How does this tie back to productivity apps moving towards subscription models?
As an app company, in order to develop a useful app, it has to be cross-platform. Otherwise, you’ll miss out on a large portion of users and users at some point will likely leave you.
The people at 1Password realized this. The people behind TextExpander realized this too now that there’s a windows version of TextExpander. For the longest time Smile Software, the company behind TextExpander and PDFPen, was Mac-only but now they’re slowly moving towards making all of their apps available on Windows too in order to save customers.
(Side note: I’m seriously concerned with what will happen with OmniFocus. I’ve seen a lot of people move away from OmniFocus because there’s no option on Android and Windows (something I’ve told you before in the past). This will continue to happen and all the Mac-only apps right now should be concerned about losing users.)
To create a cross-platform app, you have to invest a lot of time and money into the app. Just imagine all the testing you have to do to make sure it works on an Android phone (there are hundreds of models) and on Windows.
On top of that, you usually need to build a sync service to house the data so all the different platforms can stay in sync (nobody wants to be on the “same wifi” network to sync up – that’s so 2012.)
As you can imagine, it’s expensive to develop a cross-platform app. Where does that money come from?
You guessed it: subscriptions.
It gives app companies predictable cash flow that allows them to create better apps and that are cross-platform.
You, the 2017 consumer, want a cross-platform app. You want to have the option to be able to use your favorite app on whichever product and platform you use.
We’re in this transition period right now where app companies are starting to realize that and that’s why I’m telling you right now – be prepared to pay for subscriptions for your (productivity) apps.
I know we’re not in 2018 yet, but this will be one of my top predictions: you will pay more than $250/year in subscriptions to use your favorite productivity tools.
As I mentioned in last week’s email, that’s not expensive and shouldn’t be a problem. You’ll recoup that cost in the increase in productivity.
If this scares you and you’re thinking of switching apps that still use a one-time purchase model, be prepared to:
- Spend a lot of time doing research for the right app to replace it with
- Spend a lot of time experimenting, trying new workflows and setting up your new apps and integrations
Is that really worth it for an app that will cost $60/year? I don’t think so.
As the co-founder of Ulysses wrote:
“App subscriptions are a bit unpopular at the time of writing, but we think they clearly are the way forward, at least for our kind of app: a complex, multi-platform productivity app.”
You, the consumer, benefit from this trend because you’ll be able to use your favorite apps on all the different products and platforms you use. It’ll just cost a little more.
-Thanh & the Asian Efficiency team
P.S. In a strange way, this subscription trend will force you to be more productive. How? When you know you’re paying $60/year for a tool, you want to maximize the value and actually use it. Nobody wants to waste money paying for something they don’t use. By paying for something (expensive), you value it more and will force yourself to use it. It’s a weird psychological effect but it will benefit you albeit in a weird way.
P.P.S. Anytime you see a free app take off and become really popular, expect it to either die or turn into a subscription. If a free app turns into paid upgrades, I would even then be worried because it’s not sustainable for the business as I outlined earlier. Something to ponder about as you evaluate your current usage of apps.
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