I’ve noticed an alarming trend going on in the productivity industry.
Every day I see in readers’ emails, people on our private forum (part of the Dojo) and on social media that people are abandoning productivity apps.
More and more productivity apps are becoming a subscription where you have to pay every month or year to use the app.
Digital pitchforks are being raised and people are upset that their favorite apps such as DayOne, TextExpander, 1Password and many others are now subscriptions.
I used to be like that too. I remember a couple years ago when Adobe first introduced their subscription model for all their apps like Photoshop and DreamWeaver. Many people, including myself, were furious. Everyone threatened to abandon Photoshop and go elsewhere.
As the consumer, I hated it. HATED IT.
A few years later, I’ve come to my senses.
Now I get it.
In fact, I actually like it that more productivity apps are becoming a subscription.
Let me explain why.
There are only two reasons businesses stop existing: the owner gives up or it ran out of cash.
There’s a reason why most businesses don’t make it past the 5-year mark (luckily we did!). A lot of time it’s related to the owner giving up.
The founder was passionate about an idea, started the business and over the years was struggling to make ends meet. At some point, as every entrepreneur can relate, you wonder “what’s the point of working so hard and all this stress when I can barely pay my bills?”
When the owner gives up, the business usually dies. Not surprisingly, usually it’s related to not making enough money.
Which brings me to the second reason businesses stop existing: they run of out cash. When you don’t have cash, you can’t pay your people, vendors and your bills. That’s when you have to raise the white flag and call it quits.
Running a business is not easy. It’s one of the hardest things you can experience. Don’t let the glorification of entrepreneurship we see nowadays cloud your judgment. It’s brutal and stressful if you don’t know what you’re doing.
I know that all too well. There have been a couple moments where AE was close to being shutdown. Being in that position sucks. I can be the most productive person in the world and extremely passionate about my craft, but if I can’t figure out a way to monetize it…it ends there.
Most people who start a business usually have no idea how to make money with it. They start with a passion and hope to turn it into a business. I know because that’s how Asian Efficiency got started. It was a passion project that turned into a business two years later. I never intended to make it a business but it just fell in my lap as people kept asking me to teach them how to be extremely efficient (and wanting to pay me).
But I honestly had no idea how to run a business. We’ve had a lot of failures and setbacks. A bunch were revealed on a recent podcast but there are many more.
As AE has grown significantly in revenue and my financial literacy has improved, I understand why more apps are now subscriptions and why you should start embracing it.
As the CEO of AE, one of my main responsibilities is to never run out of cash. As soon as cash is in jeopardy, things go south and eventually we have to stop what we’re doing.
It’s seriously one of my biggest fears and what keeps me up at night. I’m responsible for the wellbeing of the employees, their significant other, their kids, their futures. And most of all – you. The reader. The customer.
I always remind myself to never run out of cash.
When one of my productivity apps becomes a subscription, I give a virtual nod to the founder. I approve that move because as a fellow entrepreneur I understand why it’s done. It’s to improve the cash flow of the business.
Most developers who start an app do it because they’re solving a problem for themselves. They didn’t intend to make it a business. Sure, making mortgage money with would be nice, but beyond that it’s about the passion behind the app.
Then when an app starts to take off, the founder might decide to make it a “real business”. He starts hiring developers and other people. Oh snap, developers aren’t cheap and payroll goes through the roof. Now there’s pressure to sell more apps and create more apps to attract new customers.
The competition is catching on. They see that he’s making money and now they want a piece of the pie. He sees his market share decreasing and the unpredictable cash flow is driving his stress levels to new record highs.
When your revenue over a time frame looks like a rollercoaster and is unpredictable, you can’t really make smart business decisions. A lot of decisions are based on hope and calculations that are prone to be wrong.
That’s why a lot of productivity apps stop existing. The founder either gave up and/or they ran out of cash.
But…when you have a subscription business model you can predict your future cash. This allows for better business decisions and a sustainable business.
I’ve seen this myself with AE. As soon as we introduced subscriptions, we would have more predictable revenue which in turn allowed us to be more strategic about how and what we do.
If you’ve never run a business, this might be hard to grasp. You still might not like that apps are becoming a subscription but I’m here to tell you that it’s a good thing and that you should embrace it.
Subscription models will make it more likely that your favorite app will stick around and improve in functionality.
“But Thanh, what if I have 5 apps that I all pay $50/year for?”
Okay, you want to play the math game with me? Be careful what you ask for. I’m Asian and I can’t lose at this game.
Let’s get specific for apps I personally use that I pay for:
- Evernote (premium) – $70/year
- 1Password – $36/year
- TextExpander – $40/year
- Adobe Photoshop – $120/year
- Spotify – $120/year
Add that all up and that’s $386/year. That might look like a lot, but let’s get realistic here.
These are apps I use every day. The daily cost for me is $386 / 365 = $1.06 per day. In other words, for a dollar a day I get to use my favorite tools that I enjoy and make me more productive.
Can you afford to spend a dollar a day to be Asian Efficient? To achieve your goals faster? To not worry about your privacy, whether the app will be around or if they will ever fix bugs in a timely manner?
I would argue you’re hurting yourself by not paying for apps.
By paying for your tools you’re not only buying the tool itself, but also peace of mind knowing that:
- The app will likely be around for the long-term
- Bugs are getting addressed and fixed
- Customer support is there for you when you need it
- Your privacy is being taken seriously
It’s one of many reasons I rarely recommend free apps anymore. I’ve been bitten too many times in the past where apps stopped being developed or got shutdown. Or even worse, my information was being sold to third parties.
A couple years ago people called me crazy for paying $80 for OmniFocus. Well…OmniFocus is still around and is considered one of the best task managers out there that’s under active development.
(As an interesting side note: The Omni Group, the company behind OmniFocus, has an interesting pricing and business model. They don’t have subscriptions but charge high prices for their apps. This allows them to pay their developers. At the same time you have to expect to upgrade your app every other year or so. In a way, it’s a subscription but much less predictable. I wouldn’t be surprised if they eventually turn their apps into a subscription.)
I know subscriptions can add up. One interesting side-benefit is that when you pay for subscriptions it forces you to evaluate whether you actually like the app or not. If you like it, keep using it. If you don’t like it, stop paying for it.
This has made me less of an app hoarder because I hate wasting money on something every month that I don’t use.
Personally, I would pay up to $1,000/year for all my productivity apps that I use. I know that’s a lot of money but I also understand my leverage. The more productive I am, the happier I am and the more money I make.
(And if you’ve ever used other people’s computers without your favorite tools you know how slow and frustrating it can be to get things done. It’s not worth dealing with that stress. That’s one of the many reasons I’m willing to pay for apps. In Marie Kondo language, they bring me joy.)
I do want to give you one useful resource to save money on app subscriptions. A couple weeks ago Mike on the team posted this on the private Dojo forum where you can get a bunch of productivity apps that are subscriptions but only pay a small monthly fee.
For just $9.99/month you can use a lot of subscription apps such as iStat Menus, Ulysses, Marked, and many more.
It’s called SetApp. We recommend it. For now, Mac only.