Season 2: Tools for Success
Ep. 64 Fireside Chat: Lifetime deals in Software - Immediate savings versus Long-term Sustainability
Dante Healy [00:00:00]:
Hello everyone. Welcome to another episode of Business Breaks Now. John and myself, we've been out for a while for various reasons, busy with our own side projects, our day jobs, and other things. One other thing actually is, I've had a lot of administration work due to something that came up recently. Just over a month ago, my podcast hosting went out of business. Now that got me thinking about what to talk about for this episode, and the reason I'm touching on this topic and linking it to the podcast host was because it was actually a lifetime deal. Now for those of you who don't know, software lifetime deal is where you pay one payment upfront rather than going on the usual subscription model or freemium model, where you either get a limited service and you run ads or you get to pay for a premium. This one dearly gives you the benefits of having the option to pay for the premium service or even limited service, but pay a lesser amount.
Dante Healy [00:01:14]:
But it's all upfront, you pay one payment and then you can forget about it. Obviously for businesses running on SaaS software, it's better for them to have customers who keep paying regularly on a monthly recurring, because then that guarantees you revenues to cover your operating expenses. And so with that in mind, we decided to discuss lifetime deals in general and think about how does this work, what are the benefits, What are the, disadvantages? And try and take it from both the SaaS founders perspective, as well as the customer. So John, would you like to kick off what thoughts does this topic really trigger with you? And also, what are your experiences with lifetime deals? I am not
John Byrne [00:02:04]:
as, big into the lifetime deals as you are. But mainly because, how do I say this? We don't call them life ideals, lifetime deals, but when you buy a piece of software and put it on your computer, that's what it is. It's a lifetime license, to to use it. I like them. I like having that on my computer. If it doesn't get updated, yes, that means when the operating system gets updated to a a certain level, it may no longer be compatible with your piece of software, but at least all the data is on the computer. I like that. I'm old fashioned in that way.
John Byrne [00:02:39]:
Whereas the the SaaS deals specifically that, you know, we're talking about here. There are SaaS, they're in the clouds. Somebody else's server will have them. And it goes beyond just, you know, the if they stop supporting it, that, it doesn't work with your operating system. Or if they stop supporting it, it disappears eventually because when they said that a piece of software is on your computer, you are responsible for the upkeep of that. When they've got a SaaS product, it's on the server, and they have to continue paying for that server. Which it's a it's a much riskier proposition that I I would suggest to anybody who's doing it, you know, as the rules of time. At least initially, don't trust anything that is of strategic value to you, to a lifetime deal.
John Byrne [00:03:32]:
You know, by all means, use the lifetime deals, but make sure you have everything back up somewhere that you have access to it no matter what happens. And and instead you have a plan b, you know, you you don't have to actually take out a subscription to a more standard thing, but know what is available to you so that in an enormous notice you can get everything back up and running, especially if it's a strategic thing. So, you know, it like in your case, you know, months ago, they they went buzz, but they gave you a month's notice to transfer everything over. Imagine, you know, if you were if you didn't have backups to all those episodes, and you just showed up one morning and they just don't, you no longer had access. The the, you know, so that and that is the risk. I mean, I know from some of the examples that you've gone through that has happened. You haven't been given a month's notice that the things have just gone. I don't think any of the Ifan deals that I have purchased are gone.
John Byrne [00:04:25]:
Having said that, some of them I'm looking at, I don't use them on a large chunk now. Why I don't use some of them is because they're still offering iFan deals, and I've had that for for, you know, nearly 2 years. And then you're kind of thinking, okay, they don't fit to have a a business model designed here to to move on from lifetime deals. However, you wanna make money. So Yeah.
John Byrne [00:04:48]:
I mean, when you say business model, it's probably more of an a growth model. And just for those who aren't technology savvy, and really it's not everyone knows about the Cloud, but for those who aren't familiar with the concept, it's basically paying to use someone else's computer. So it's really hosting over the Internet, someone else is doing the processing and they're incurring the storage and electricity costs of having all your data and processes that will be linked to the tool. Those costs are being borne by the SaaS host, so the service provider. And when you have say a tool like, I don't know, Excel or Microsoft Projects, all that processing is happening inside your own system. So your computer, your electric, when it's a SaaS, it's hosted externally, someone else's computer is effectively being rented, And that's what I would say is the justification for for the monthly subscription because the SaaS companies are hoping that once they reach a certain breakeven point, that the revenues will more than offset their costs, their running costs. And it will be a combination of, obviously, servers, licenses for certain softwares that they may use, and then the staff who have to maintain the software and ideally improve upon it because that's the other thing with the lifetime deal. Some of them may or may not evolve, so they may get to an MVP.
John Byrne [00:06:31]:
The hope is that the growth will come, and then that growth will fund future innovation, which does or doesn't always happen. Now saying that, there have been lifetime deals that have gone on to be amazing unicorns. Couple of ones off the top of my head, apparently Zapier was a lifetime deal in the past. And there have been some very successful content generation tools. If it makes money, it makes sense as they say. But if you don't have a path to profitability, then it brings into question the long term sustainability of the actual tool, which then questions begs the question, is it truly a lifetime deal? It's the lifetime of the product, but if the lifespan is less than a couple of years, then do you actually get an effective return on the upfront cost that you bear as a customer purchasing something you hope will last longer than maybe 12 to 24 months? So, I mean, your thoughts, John, on that? Yeah. I
Dante Healy [00:07:44]:
think that's, you know, from from both sides of the the client, the developers, and the customers. The the business model, it is essential. Like, even as a customer, you you may not really care whether they're making money or not, but if the product is something you want to continue using, you do want to, you know, the the ideal of the the lifetime deal is is that it's just you're almost beta testing. You're paying to beta test product. Giving them some investment money upfront where they can go and they can develop the product faster. Gives them a a little bit of a a networking effect, a community effect early on. But the goal should be that reasonably quickly, you know, we're in a we're in maybe 3 to 6 months. The lifetime deal stops at that stage.
Dante Healy [00:08:36]:
They've developed it enough. They've been able to do it enough that they can then start charging a subscription. And those new subscribers are who's gonna pay for your lifetime deal on an ongoing basis. That you got the deal by putting the money in, taking a little bit of a gamble upfront, giving the feedback on and creating the initial the initial network that that kicked her off. But if, like, with some of the ones that I I've got, you know, 2 years later, they're still selling lifetime bills. Eventually that money is going to run out because everybody who wants it has it. And how do they make money then? You know, that they they either have to make money by by getting you over to a subscription off your lifetime deal. But then what was
John Byrne [00:09:19]:
the point of the lifetime deal? You know, you're you're now on a subscription model, you might as well have just gone for that. Or they go bust because, they haven't they're still selling lifetime deals. Who's going to subscribe to something when you can just buy a lifetime deal? Completely agree. And, when they go bust, even for me, that took me out for over a month just updating the hosting provider, switching RSS feeds, updating the website with new snippets, and I've gone to Spotify because at least hopefully if things go south, I'll I'll end up switching to to them and they won't touch wood. Never say never because businesses go bust whether they have lifetime deals or not, but it it does introduce an extra element of risk there because you've you've effectively leveraged your operations by having people who will benefit from the service on an ongoing basis, but won't be contributing to the ongoing revenue. Because essentially, they've invested their money upfront and again invested. I guess you could consider it an investment where you've got, as you say, the networking effect of the initial community who are providing feedback. But you have to be effective in how you filter that feedback in order to make sure that the upgrades and the new features you introduce to your product are there to benefit the tool as a business, rather than just serve people who are maybe vocal but might not actually contribute to the ongoing business itself.
John Byrne [00:11:03]:
So for example, if they make suggestions that will enhance the marketability of the tool, that's great. If they're just saying, well, I want you to invest 2 weeks of your developers' time to integrate your tool with another tool I have to make my life easier, but it doesn't benefit anyone else, then that's not so great for the tool itself in terms of longevity.
Dante Healy [00:11:27]:
Yeah. They they you're they they found the developer side, they really get to be clear on what our goals are.
John Byrne [00:11:33]:
And that's where you need an effective product manager, I guess. Yeah. Whether it's the founder themselves who has a clear vision of how they want the their their product to evolve, or someone else who has that commercial mindset to think long term and actually filter out the the non valuable features and upgrades versus those which will add value to the future revenue stream.
Dante Healy [00:12:00]:
And also, you know, from the point of view of of going on the the system, you know, set off selling the light fan vehicles. What exactly is it that you're hoping to achieve from? And have your KPIs done so that you can measure is a successful. Is is it market research that you're doing? Is looking to develop a product that you don't know what direction it's going to go? So you're going to let the the area adapters, probably not the best way
John Byrne [00:12:26]:
to deal with though, because the area adapters are are not necessarily going to be representative of the bigger market that you're hoping to get into. It depends if if they're good entrepreneurs. Actually, some of the early adopters tend to be people who have either launched their own their own SaaS tools or have gone on to I'll look at that. Yeah. The problem there is, but they
Dante Healy [00:12:53]:
are completely useless as a market research thing because the the vast majority of the people that you're going to be trying to sell to did not develop their own SaaS tool, and will never be developing their own SaaS tool, have no interest in it. Yeah. So we are there is somebody who developed their own SaaS tool, will be looking at things from a very different point of view to somebody who just wants to buy the product later on, or product later on. So to be careful, you know, with that, that you don't make that. Or or maybe you are, maybe you do have no intentions of selling the product on to end users. Maybe your whole intention is to develop a product that can be integrated into other products, and and shield, sell licensing to those other products. In which case, those developers of their own SaaS tools will be perfect for our your your market.
John Byrne [00:13:38]:
We need to not our upfront before you go selling your your lifetime deals. Yeah. It might be that your end game is ultimately to get to a point where you're b to b, and that the lifetime deal will will probably be mothballed or frozen, so maybe it will remain in place, but it won't be open to new customers or at least in terms of subscriptions, they may be cost prohibitive. So that if they do they do go on, it will be a more expensive monthly recurring revenue, which if you're a business that's ideal because you're you're you're actually growing your revenues. But again, it's finding those right problems to solve, and then upgrading the product, so it has a unique competitive advantage in terms of how it functions,
Dante Healy [00:14:27]:
the user interface, how people can interact with it to solve
John Byrne [00:14:27]:
their specific problem. A lot of the lifetime deals I see, you know, that we're we're we're every product where,
Dante Healy [00:14:39]:
sometimes I think the lifetime deal, when you looked at them, that they don't have that. They just have some product that they decide to try and cash in on. They're not necessarily thinking long term. If that's the case from the consumer point of view or the, the client point of view, that's not a product to buy because if they're not thinking long term, it's
John Byrne [00:14:59]:
not gonna last long term. Because they lack a strategy at the end of the day to, to, to be sustainable and be in it for the long term.
Dante Healy [00:15:09]:
And then I'm not aware of many successful life farm and hails that have come through the marketplaces. They they tend to be like, I do know Von, a colleague who is using a CRM, gold mother, and she got it on a lifetime deal initially because they're starting out with it's not they they don't think they do any lifetime deals now. I can't see any around. It's a subscription model, and it's an expensive one. So if she did really well getting the lifetime bill when she did, and they seem to be reasonably successful now that they are. People are purchasing their their thing. But I do I'm not aware of them going through any marketplaces that was, you you know, your your most the the the most likely successful one seem to be the ones, like, spread by word-of-mouth initially. Yeah.
Dante Healy [00:15:59]:
I'm I'm not aware of you. We know the the the big marketplaces that I want to start advertising too many of them, but I'm not aware of too many huge success stories coming out of them. And that most of them do tend to just fade away eventually.
John Byrne [00:16:16]:
I don't know. A lot of the the more popular softwares I've heard had been on lifetime deals before, but it was only to a very exclusive audience of, should we say, upfront investors. So they were investing in the business, and they got lifetime deals as part of their investment. So That's that's what I mean. You know,
Dante Healy [00:16:37]:
they're that's they're the ones that seem to be successful. I've never I'm not aware of any that went on to, one of the marketplaces that are going for lifetime deals, the likes of, Hidden App Store or somewhere like that. Being we've reached that level of success. There seems to be a minority of them that get that level of success anywhere, but those that are that did get us seem to be they they they did a little more exclusively. It's kind of word-of-mouth that you will find out about them. So Yeah. Pay attention when you hear of a small one that's not on a marketplace that's offering a life span deal. You know, that might be a better, opportunity than than going to the marketplaces and buying because there's so many now.
Dante Healy [00:17:17]:
Everybody is offering life and deals, and you kind of look and you think that they're all competing where you should or how you know, what's, what's gonna make this one work and did and do it
John Byrne [00:17:27]:
or not. Yeah. Yeah. Which one's a better tool? Because you can have two variations. For example, form building or, video generation from AI.
Dante Healy [00:17:38]:
Find this, it won't matter which one is the better. So it'll matter which one, the team behind that has the better business model, has the better, plan, a tool plan, yeah. Which from lifetime deals over to subscription and can do it reasonably quickly. As I said, I don't think I think if somebody is still offering lifetime deals after 6 months, they're not going to succeed. Because after 6 months, they need to be switching over to a subscription, all the way in order to be able to make ongoing revenue to pay the costs of hosting and all the rest of it. Yeah. And this
John Byrne [00:18:12]:
is the problem without unless you get investment money. But as you say, even then, usually if a product is that good and that mature, the investors will have sniffed it out and will be looking to buy into it and invest. And then yeah.
Dante Healy [00:18:30]:
If you're getting invested money, you aren't selling Lifeline.
John Byrne [00:18:32]:
You don't need exactly. Exactly. And and it's funny, there have been some SaaS tools. One SaaS tool, which I won't name names, but it was an AI voice generation tool that I used initially that helped me generate some very realistic sounding AI voices from text. Within a month of the aqua within a month of me buying the tool on a lifetime deal, it was acquired by Venture Capitalist, and they decided that they would just close the the business down and then reopen it as another company. So basically invalidating the commercial contract of the lifetime deal, which was a little bit of a scandal because the platform that had to deal with it had to issue refunds, which again was really weird because the refunds were actually credits. So you had to in order to recover your money, you had to buy some alternative lifetime deal. But, yeah, it happens.
John Byrne [00:19:31]:
And usually, how it's announced is the heavy hot email. It's with a heavy hot that we have decided to blah blah blah. You're not gonna get it anymore, this service or product. And that's the the problem, you know, that that's it again. It is a most of them fail. Of those that succeeds, probably most of them succeed by doing something like what what like you've just said there that they get taken over by another company.
Dante Healy [00:19:58]:
That other company is not honoring lifetime deals sold by them. And it might not even be anything bad about it. I mean, I'm not aware of Apple ever buying somebody who offered a lifetime deal. But when you look at when they purchase a small company, a smaller company and do it, they generally tend to shut that company down and incorporate it into an existing Apple product. And they're not the only ones who do that. They're or rather, you know, that's but that's a large companies will buy good products and incorporate them into their own product. So it's not even that they're doing anything dishonest. It's they're just doing what they do.
Dante Healy [00:20:32]:
And if you have a lifestyle and they have to do the original product, well, it's getting shut down because it's no longer needed. So, you know, it's it's it's the few examples that we've given there, and, you know, I'm sure people listening can probably come up with a couple of more examples, but I'm I'd be fairly certain that you could probably count the number of successful ones that maintained the lifetime deal for the people who initially signed up. You probably count them on one hand, maximum two hands, and you're gonna have fingers left over, I I would think because, so again, when you're buying the lifetime deals, what you really need to be doing is working out how much per month is this product worth to you. So how many months is that going to take? And then taking gamble, will it last that number of months months of those? Happy days, you're making the, you know, a a tear on it. And if it doesn't blast that any months, then write it off as well. Lesson learned. It's, it's a kind of it is a gamble. But as I said at the beginning, less so if you are aware enough to make sure that anything that you're using on the tool, you have a backup on your system that you can access.
Dante Healy [00:21:45]:
And that it is a strategic tool that's needed for running your business, you you know what the, more stable alternatives are, and you I'm not saying get a subscription to them because if you're doing that, you would made a lifetime deal, but you are aware and you keep up to date with them that, you know, what the changes are, how much they are. If there's 2 or 3 alternatives, you keep up to date with them. And, be ready then that if the lifetime deal collapses. Because I know you okay. I I we heard it too. You got a month's notice the last time,
John Byrne [00:22:18]:
but there has been another other product that went cost on you that that and you didn't get any notice. You were just told it's gone. Yeah. Exactly. And has happened to me a couple of times, and you don't have any time to do any form of contingency planning, data migration. I lost the whole year's worth of social media content because of it that I've been posting for a year because there was no database migration in the plan. They hadn't actually canceled the lifetime deal, but what they had done is they switched domains and they were upgrading the platform that they wanted to reduce their hosting costs. So they re platformed, unfortunately, they weren't going to transfer the data, presumably because it would cost a fortune just to do that exercise to clone the data, process it, and then try and map it to the new tool.
John Byrne [00:23:09]:
So they just said, sort it. If you wanna do it, you can do it yourself manually and copy and paste manually all your posts. So for me, for a whole year of posting, some of which was, you know, some of my posts and some of my thought leadership, even though it was evergreen content, I could probably just pull it from LinkedIn, in terms of my feed history, albeit though it it would be a pain to do because all of that is archived anyway, but if I needed it that badly I could do it. But I'm not gonna go back for old content when, you know, things evolve and even who I am as a professional is different from who I was a year ago, even though I haven't changed my kind of content strategy or messaging, but I do need to do an upgrade. But, yeah, I mean for say, if you've got a business that runs entirely on lifetime deals, that's got to be extremely risky for you and your customers. Imagine saying, oh, I can't provide this service or I have to charge x amount more. But then, I guess if you're making profits, you must be it it will hurt, but as long as you can still break even or or make money. The the key thing is, do you have a good quality product or service that you offer your customers? That if you had to switch from a lifetime deal to a subscription based model, you could do that and still cover your costs.
John Byrne [00:24:43]:
So I guess that's the question. Right? But how much time? Yeah. Can you switch? You know, if if you've put everything into into then
Dante Healy [00:24:53]:
life cycle, you know, and they go bust, have you lost everything, or do you have backup somewhere? And is there another product, handy? You know, it's one thing to be able to work your price to to cover the cost of another product, but do you know what other products are available? Do you know what the, you know, have all that as your that needs to be your your your risk management strategy, if you're using lifetime ideas and relying on them for strategic. Is a, have everything backed up on your own computer somewhere on a disk, so that you you can access it quickly if the thing disappears. And b, be aware of what other alternatives are. Even if you've no intentions of using them, but be aware of what they are. So that in an emergency situation, you can switch over and keep your business going even if the lifetime deal has ended. And and to be honest, though, that's probably not a bad thing to be doing regardless of, you know, even if it's not a lifetime deal, to just be aware of. Because like you you said earlier, some companies go bust even if they're not light lifetime deals. But companies even, I mean, Google have are are doing something else now.
Dante Healy [00:26:04]:
They're dropping something else that they provided a lot of services and then suddenly they decide, oh, this is not working anymore. And they just cancel it. I mean, they're not going bust. They're just not providing that product anymore. I know one of them was the Google business that they're having the chats. It did they're on a chat. They've stopped. I'm not sure if they have stopped or if they are stopping, but it's it's going.
Dante Healy [00:26:25]:
So if that was something that you built your business on, some kind of, you know, communication, you're now in trouble because if you're relying on Google. So, even at, it's not a lifetime deal, and and it's a huge company that's providing the service. Still, we'll make sure just as good practice to be aware of what other tools you could use, and you could switch over to and be able to switch over to them at reasonably short notice because, you know, even even companies as big as Google will just drop anything that doesn't suit them. They don't really care about you. They care about them. And if if
John Byrne [00:26:59]:
they're not making the money, if they're not able to sell your data enough of your data through that product, they will drop that product. Well, that's another thing I wasn't even aware of. Google have dropped their podcast platform or directory. And it I only found that out because I was switching RSS feeds. So, yeah. That's that's true. Even big companies, they they discontinue product lines because they don't serve them. They don't serve serve their overall launching strategy, or they can't see how it would integrate.
John Byrne [00:27:33]:
And I think with Google Podcasts, it was probably competing with YouTube, which they own. And now YouTube have launched a podcast service, and so Google don't need to host podcasts anymore because it will be done through YouTube. And they keep all their media, video, audio, and even YouTube is now taking text posts and images similar to other platforms. So anyway, yeah, the strategy can I mean, there's gonna be exposure and what you say about having a backup plan, a plan b, That has to be common across every business and not just the big businesses who have what's called a formal disaster recovery plan, where if you have a software or an enterprise solution that is at high risk of obsolescence, what usually they do and they it's not really a good plan b because usually it's not one that they'd really be willing to seriously consider because it basically means a lot of the time for certain softwares that they have as a b to b, what they'll end up having in the agreement is to purchase the source code and then host and maintain it themselves? Now that can present its own set of challenges because a, forget about the commercial piece of server costs and, you know, hosting costs. You've also got the problem of, do you have the expertise if it's written in a language that is very obscure or or has a very limited group of experts, then you're gonna be paying a fortune for a developer who can do anything meaningful with
Dante Healy [00:29:18]:
it. And you had them and you might not be able to get them. I I did work in a company once that was that that did that. They they had, the 2 pieces of software that they had, speaking to each other via a an old language. I can't remember whether it was COBOL or something like that. You know, it was an old language kinda it was not like that. And they sub they divested part of the company, and the license for one of those pieces of software went with that part of the company. And the well, the licenses for both side out of pieces of software went with that part of the company.
Dante Healy [00:29:49]:
And so we kept talking to each other. And what they were left with was one of those software licenses that they needed, which was a very old piece of software. And they bought a new product to replace the, the other one that in the, ERP, field. But those two products, the new product and the old product didn't speak to each other. They needed COBOL, or possibly was COBOL, but they needed a a specialist in certain language, which hadn't been really used since the eighties. And the the software that they'd license that they had they had since the eighties, actually, I think it was 1992, was the, the copyright, you know, the software. But that's what they've done. They bought the rights, the perpetual rights to the software.
Dante Healy [00:30:33]:
They they still ran on on DOS. It was a DOS, Windows DOS, Win sorry, Windows DOS, Microsoft DOS. Yeah. I was screaming, I need to do it and all that. But they ended up having to they had to completely switch over to SAP because that could do both sides of things. They did need 2 pieces of software, but that's what they ended up having to do in the end against their will because they realized their their disaster recovery plan was you just get somebody to to write it the the piece of code to get the the old system talking to the new system. And you're grand, and then they realized after they couldn't do it, nobody was around. There weren't enough people who could write that language, who who were able to do it.
Dante Healy [00:31:12]:
They couldn't get anybody. So they they then in a major panic, very quick project had to be drawn up to to try and and, get it. And then they had to go and negotiate with the, the company that just sold the licenses field to be able to be allowed to continue using the, the, the software, get the, the new product in. And this is a major international PLC company that did that, you know, that, Yeah. The, but, you know, the artist probably won't be in that kind of thing. It is still, you know, the disaster recovery. It just should be a little bit easier when you're a smaller scale. It shouldn't necessarily, you need to be buying lifetime, you know, to to get an access to it.
Dante Healy [00:31:55]:
But just to have other alternative site you can quickly switch over to and know how know how to get your your backups off the existing system and how to upload them to the new system.
John Byrne [00:32:06]:
Well, this is it. I mean, you've got ERPs and, you know, with ERP migrations, it's a pain to try and get the data out of the systems. That's the biggest pain point is getting the data out before you could even feed it into a new system. Mhmm. So, I think coming back to lifetime deals, what are the benefits clearly for the, the users themselves? They're running their businesses. They keep their costs low. They save 1,000 of dollars per month because they've invested, you know, a few $100 upfront. If it works, if it doesn't work then they have to well in some platforms they give you a 60 day grace period to figure out whether you want it or refund it.
John Byrne [00:32:50]:
But even then that that can be that can have its own problems. And I think the reason this conversation has become more topical is because the current situation economically. In general, we have a credit crunch and when times are hard, this is where businesses have to tighten their belts and keep keep commercially afloat. There's no such thing as, should we say cheap tech money, and this is technology. The technology industry is driven by software. Right? So if your tools have no demand, or not enough demand to cover cost, then you're going to be struggling unless you can secure funding, or new sources of revenues ideally. And this is the problem.
Dante Healy [00:33:37]:
Yeah. As I've said, it's kind of almost like the way you as a consumer, as as the person buying the Life of Amdell, you almost need to think of it, you you know, in in the grounds of, like a venture capitalist would think of it. Venture capitalist expects 9 out of 10 investments to go bust on them, to lose all his money on them. That one that, that is successful will make them more than enough money to make up for the other 9, and they'll be happy to have made profit. And I think that's probably, you know, when, when you are looking at lifestyle deals, you need to kind of think of it in a similar vein. That 9 out of 10 of them will probably not be as good as you are hoping that they'd be, will not last as long
John Byrne [00:34:20]:
as you do. But if
Dante Healy [00:34:20]:
you get that 1 in 10 that, you know, still around 3, 4 years later, and you're still using it and not happen to pay out, and then it's providing a, a, a valuable service to your company. Hey, you you you made, you know, it depends on the software, how much they are. But when you look at some of the platforms, they average out maybe say 50 quid, a goal. So if you buy 10 of them, that's about €500 or €500, or $500, or whatever you want to call it. So
John Byrne [00:34:49]:
if one of them walks out, you've paid 500 for that one that walks out, but you've still got a genuine lifetime deal that of that product that you're using. You will get your money back eventually, but you, you kind of need to be a little bit, savvy so that your, your failure rate isn't as high as 1 in 10 or 9 in 10, sorry, failure rate. Yeah.
Dante Healy [00:35:12]:
And you'd rather not have it 9 in 10. And certainly that the 1 in 10, like, products that walk sale for you is something that's valuable to you. That's not a product that, yeah, it's grand, it's walking, but it has a novelty.
John Byrne [00:35:25]:
Yeah. Exactly. Or I'm not making money from it.
Dante Healy [00:35:28]:
That's not serving me. That's not making me money, and that's not saving me money. So it was kind of a pointless so like the the fear of missing out type of the phone mobile buying and the I know I'm fixing. Yeah. Yeah. That that's don't do that if you're going onto these platforms here. Specifically buy products that, yes, I can see where I need to use this product. It will either make me money or it will save me money.
Dante Healy [00:35:51]:
And if it's a, you know, if all the other purchases I've made go bust and this one works out, I will be happy. And and, dude, we're all looking, you know, any any products that you buy on a lifetime deal, make sure that it's something that, is worthwhile to you if it does succeed. Mhmm. And just have your die your your disaster recovery plan in place for if it doesn't succeed because, chances are you're not getting a month's notice to get out of your
John Byrne [00:36:19]:
doubt. Yeah. And there are great, there are great tools out there for all the failures. There are a lot, almost as many, successes where there are tools that have ended up creating successful business models have successfully moved away from serving up lifetime deals and then having proper recurring revenue streams, and communities that are active on the tool. And eventually, dare I say, for example, there's one tool called Cost Magic. They are moving they have moved away. They're serving podcasters. Every company has started their own podcast that I can think of.
John Byrne [00:36:59]:
And so they have a good a healthy b to b market to attack. Because they solve one specific problem, which is generating show notes from transcripts. So they do that very well very quickly and create insights using AI. So I guess that's just to pull one example. And then if you get one
Dante Healy [00:37:20]:
of those, you you'd be laughing. Yeah. It's, sad though, and I think I I I just have this thing myself 6 months as the core office there. Yeah. That that I didn't didn't if if they go beyond 6 months of still offering LifeSandy Hills, then they don't they either don't have a plan how to raise revenue ongoing, or they're not getting the extraction that they were hoping to get. It's not working, so they have to keep extending. And also as a consumer,
John Byrne [00:37:49]:
as you say 6 months or lifetime deals, that's to evaluate the software that you're you're looking to buy. But you have to look at yourself as a person, because one person might buy the same tool, make money from it, and versus another who buys the tool and just leaves it sitting there just in case. So it becomes shelfware. Exactly. And that's that's see, if that's what you're doing, don't do it.
Dante Healy [00:38:12]:
It's a waste of money. You're buying and even a day just in case. And I have to admit that when when I did buy a few products, a lot of them are just sitting there. I think there's there's like, there might be 3 products that I actually use. One of them I've stopped using because, as I said, 2 years later, they're still offering lifestyle. So there's no point to get that product to, ingrained in my business because I don't see it asking it. How how are they gonna make money if they're selling lifestyle and deals, and they have no recurring revenue beyond Lifespan deals. That that, you know, so that that's that's where my 6 months comes from is, you know, you offer Lifespan deals for 6 months.
Dante Healy [00:38:53]:
And then once that 6 months is up, you need to have built up enough of a tank to be able to sell a subscription now to new people that new people can no longer get the likes and deals. They can only get around subscription. But you've made enough of a reputation for yourself over the last 6 months that new people want the subscription. Now That's the idea. If if they can't do that after 6 months, then you're kinda thinking either they didn't put enough thought into their business model at the beginning, and they don't know how to transfer over, or it's not having the traction that they were hoping for, and they can't transfer over because the demand is not there in which case. So you probably should not be relying on this product for a long term if the demand is not there for them.
John Byrne [00:39:38]:
Mhmm. Mhmm. Exactly. I think, probably that's everything I can think of. The only point I had on my list of notes was really around, there are certain lifetime deals we should expect to be self sustaining, just because they have a different service model. Like, for example, SketchWow is a tool that I've been using to do diagrams, images, etcetera. And that's on a lifetime deal, but it's one where you download the software onto your laptop. And that actually I see as being very much an effective lifetime deal or even Microsoft Project Management.
John Byrne [00:40:18]:
That in theory, the, the desktop version is in essence a lifetime deal because you download you pay once and you download the software. So there's no processing cost, and so it's a one off. Occasionally, you have to download updates, but everything is done on your computer once you've installed the software to your to your device. So So it's almost the old fashioned way of just buying the software. Yeah. Yeah. Exactly. You don't And they also, it's it's
Dante Healy [00:40:50]:
like it's like nowadays everybody's an entrepreneur whereas back, you know, 20, 30 years ago, they were self employed.
John Byrne [00:40:56]:
Yeah. Yeah. Exactly. And they were literally shipping software, men. You were literally loading the software onto a disk, and then you are putting it into a parcel and you were you were sending it. You were shipping it via courier. So and and that's I that's still my okay. Not the disk bit.
John Byrne [00:41:16]:
I you get you can download it,
Dante Healy [00:41:18]:
but that's still my favorite is to download software onto my computer. Mhmm. Because then I have control over it. Now as I said, it does it doesn't guarantee that you really have lifetime because if they stop developing it, and if they stop giving you updates, eventually your operating system is no longer going to be compatible with it. But, you know, I, I still do buy products like that. I've got Microsoft 365, subscription, but I have all Microsoft products on the computer. And if I end if I cancel the subscription, I won't get any updates, but I will still be able to use the products. And I bought a piece of software there the other day, a SimpleMind Pro from from mine, but I've been working again.
Dante Healy [00:41:58]:
It's it's about 3 d app store, and it, it's on my computer or it's not. The other versions, all the other ones are subscription models all hosted in the cloud. This one, my create is hosted is actually hosted in the cloud. It's hosted in, My Cloud, my iCloud account. It's not in somewhere else that somebody else has. It's it's mine, and, I can and I can host that. I can download that onto, back her up onto my own computer, around my own backup disks and that. So it's, you know, that that that is I'm an old fashioned sort of person when it comes to software.
Dante Healy [00:42:29]:
I I think I prefer that my accounting software is cloud based. That would be problematic now if I ever wanted to switch because you can't get the information out of one cloud. It's like it's it's even though it's on the accounting software is exactly the same as the ERBs and that make, you
John Byrne [00:42:43]:
know, it's impossible. That's holding your business to ransom because it's got your financial records. Right? I mean, all you can do is really keep copies of your transaction data and, and your tax returns or whatever filings.
Dante Healy [00:42:58]:
And so I have all of them on, on on hard copy, but that's the only way to put out is on hard copy. And, now I suppose I could have there were PDFs, so I printed them off, put them into folders. I could have as PDFs and pulled them into folders on on the computer. And so I can leave them if I want, but, yeah, there is a way, you know, if I mean, if you're putting a lot of data into some, and it's cloud based, you've lost control about that, and you need to get out for it, you know. Cause even the ones that do offer you a ways download it easily and that, you know, a CSV isn't that. You'll find it's like we've worked on projects and then that's how we get work side of things on projects is the ETLs, you know, the extract, transform, and load. You extract it from a system, transform it, and then load it into the new system. You know, if that was easy to do, you wouldn't need projects, the project managers to do it.
Dante Healy [00:43:50]:
You could do it yourself. So as even when they make they claim to make it easy for you, it's not that easy. So just be aware of that when you're especially with lights on dales, it's just, you know, where lights on dale, the reason it's probably bigger deal for for lights on dale than for the normal stuff is. The normal stuff usually if you're chan if you're making the switch, you control the timing of it. Yeah. Made that decision and you plan it out in advance, and then you can do it. When it's a lighter fan deal situation, chances are that decision has been made for you because you've just been told, oh, we're shutting down the product. Yeah.
Dante Healy [00:44:25]:
But again, you're right.
John Byrne [00:44:26]:
I mean, our mission critical systems and processes, you don't want to run it on a lifetime deal. But if it's something that's a nice to have, like a new marketing tool, that you just wanna experiment and maybe take a punt and see if it works or not, that's relatively low risk. It's just if you if you're running it to sell some service, I don't know, like you're a Fiverr, I don't know, image creator or, I don't know, you do something with marketing and you're running that service on a lifetime deal, then you could be in trouble. But again, chances are that was a bad, like, bad example because can't imagine you'd be making too much money with all the AI generated blurb out there. That's, and that's that's the other problems. Well, that you have,
Dante Healy [00:45:13]:
eventually the competition will catch up with you even if you if you do get in early. So, you know, with that, that, that can work to the advantage of the lifetime deals as well, because it means you're trying to make your success early on. Yeah.
John Byrne [00:45:26]:
And if you've made your success early on, you're not gonna worry too much if the thing goes bust later on because you've made your success and you've transferred all over to an even better product to keep ahead of the game. Exactly. And the only thing you will have if you do decide to stay is some form of cost advantage, but nessa doesn't mean necessarily cost advantage equals performance advantage if people get bored of the same same stuff you're producing, if you can't adapt as well. Mhmm. And if you're gonna adapt, you're gonna have to be working around it. If the lifetime deal can't adjust without you paying them for the development upgrade. Because there will be negotiations going on, maybe your business is so embedded in the future in a lifetime deal, that you have to work closely with them, which isn't a bad thing if you're working to help them. But eventually, you might be thinking, maybe it's cheaper if I just do it all myself or pay someone to set it up for me.
Dante Healy [00:46:29]:
Or or you, you know again again, though, I suppose you've mentioned earlier that just know know when you're you're, what's your break point? What you're we are very keen mind is. Yeah. Because eventually, I mean, that's another way that LifeSign Deals will will make money when they transfer people over to subscription. You know, that new people can't, I guess, subscription. But eventually what they'll probably do is retire. Not so much retire, but stop, the, the new improvements, the new teams, they don't go what, the whatever tier, whatever plan, the lifetime deal was. That's not getting them. It's the subscription plan is only getting them.
Dante Healy [00:47:05]:
So if you want to keep up with the competition, you are going to have to switch over to that subscription plan. And to give up your lifetime deal. So just know, well, at what point is that okay? No. I'm okay with that. I've made me money with with the lifetime deal because, you know, that'll play a big part then as well in, whether the lifetime deal is worth whatever.
John Byrne [00:47:27]:
Yeah. Because you might have a base product, which is great, but maybe the future upgrades and the enhancements are actually a paid for service to lifetime build customers. Yeah. Maybe lesser than the full product, but you've already purchased part of it, and then maybe to get the extras to keep up, you have to start going on a partial subscription model or even a full upgrade.
Dante Healy [00:47:51]:
Yeah. So it's hard to say, you know what I mean? The ones I've seen that have done that, it's a full subscription. You know, you have to switch over or switch plans, and that's full subscription. You're not getting a discount because your lifetime deals for this plan, and you can keep keep on this plan if you want. Or if you want that plan, which has got all the latest and greatest bells and whistles, that's subscription. And you go over fully. And your problem is if you stay on the lifetime data plan, if it's something that is, is necessary for the products you sell or the services you sell, then your competition is is paying the subscription. But they're getting better things, which means they're giving better services to the ultimate clients.
Dante Healy [00:48:31]:
So, you know, whereas if you know what your breakeven behind is, if you know well, if I get to use this for the next 6 months, I'll have built up a bit of an advantage over my competitors. And after 6 months, if I have to switch over to the subscription plan, it's worthwhile. Or after 12 months or whatever, if it's gonna take you 24 months to do it, I probably wouldn't think it's worthwhile. Or it's, like, 12 months or less. It could still be worthwhile to take the lifetime deal, get the 12 months out of it. And then if you have
John Byrne [00:49:00]:
to switch, you can switch. Yeah. Is is it comes back to basic investment appraisal, you'll pay back, your return on investment. A lot of them really are low risk, but again, they're low risk if you get money back from them. With all the FOMO, the people who spend 1,000 of dollars, I could put my hand up to that, to be fair, who haven't necessarily gotten full return on all of the investments. Again, this is this is one of those things that you don't you shouldn't be buying just to collect them because they're not this idea of lifetime. It's not your lifetime. It's the lifetime of the tool.
John Byrne [00:49:38]:
And that lifetime could be could be could go for 10, 20 years in an either world, although the way the industry moves in SaaS, it's a lot faster, or it could be, you know, it could it could die out in a few months. Mhmm. Yeah. So I
Dante Healy [00:49:56]:
suppose, well, at at the end of the day, our advice to anybody I suppose that there's 2 2 potential listeners, the the ones who are thinking of offering a lifetime deal and the ones who are thinking of buying a lifetime deal. Mhmm. My advice to the one singing of offering a lifetime deal is have your business model made up, know exactly why you're offering it. Are you offering it to do market research? Are you offering it to get feedback on the product? Are you offering it to build a community and a networking effect for your product and stick to that. You know, don't don't don't end up on a on a continuous lifetime bill because you won't make money then eventually you'll run out. And if you're purchasing the product, you know, again, why are you purchasing it? How long is it gonna take for you to have all that worked out? What's your return on investment is? What's your, breaking point is? And till you actually need that, you're gonna use it now. If you're thinking, oh, you might use it in 6 months time, forget about it. Don't bother.
Dante Healy [00:50:55]:
Wait for 6 months and see. Yeah. That's the issue you need. Even if that lifetime data is gone, there might be another one available, or you can just pay it to subscription if if they've made
John Byrne [00:51:04]:
a success transition over. They would be my pieces of advice. What would you, Anthony? What would you? I agree with what you said. Don't succumb to FOMO and think about really your your risk on return on investment, and was was was that it all boils down to risk appetite. Or you could just be doing it for your own entertainment as a customer or a purchaser of lifetime deals. But, yeah. For the founders, I mean, for those of you who still run and honor lifetime deals, I think you are you should be commended and definitely carry on as a lifetime deal holder. I mean, I guess I have more more than a sort of like a, should we say, a stake in ideally having lifetime deals continue as long as possible, especially on the tools I've purchased.
John Byrne [00:51:57]:
But, sorry mate, I think think of your initial lifetime deal customers as investors. Treat them well. I think that can only help, but also measure it with commercial commercial acumen because really you can't serve everyone. You have to be very clear in who you're serving. And as you said, John, really it's it it all boils down to cold, hard financials. At the end of the day when you're looking to you're looking to price the lifetime deals or at least limit the number of people you offer them to, because ultimately there there will be people who will benefit, but there will also be people who won't necessarily get the value of that, unless they pay for a subscription service. So I think make sure you you focus on how do you get to month monthly recurring revenue, and ideally enough growth to cover your your overall costs. Especially if you're doing everything from Cloud hosting, which really the only people who who actually make money in terms of software right now are cloud hosting providers, I would say, right now in this current industry.
John Byrne [00:53:16]:
The other thing is for, as you said, don't succumb to FOMO. Also be realistic in why you're why you're purchasing a software. Can you can you get value from it? And can you quickly get value from it? If you're just purchasing something to park later, that's not a good strategy and I would try avoiding markets because really your strategy should be how do you make money for your business and using software to actually do that, that that that can be an enabler but it's not the only thing that will drive your business strategy. Your business strategy is the products and services you bill build and provide. So really it's a marginal issue strategically as a small business owner than than the actual core issue, which is really, how do you serve your customers? Who do you serve? And how do you make money by serving them? So again, don't get distracted by lifetime deals. This is just a diversionary topic because we found it interesting with the commercial implications behind it for businesses who are looking to be digital. So that's that's my my thoughts John. So yeah.
John Byrne [00:54:40]:
So that with that in mind, thank you very much John. It's been an insightful conversation as always. For those of you listening, we will be dropping some links in the show notes if you're interested in exploring the world of lifetime deals with the cautionary caveats that we've provided. So John, once again, thank you very much for your time.
Dante Healy [00:55:03]:
I'll talk to you again soon. Cheers.