1. NFTs vs. traditional subscriptions
As the new year begins, NFTs are gaining worldwide attention.
NFTs are a big part of our business. We provide products and services to members who don’t want to pay for them. And we love it!
In that sense, subscriptions are a huge success.
But one big problem with subscriptions is that they don’t make much money for us. We’re not selling ads or giving away any product in exchange for payment. So how come we make so much money?
There are two reasons why subscriptions have been so successful: first, the consumer knows that they have control; second, they know that they will get something out of it (more value) if they pay their subscription fee on time. Those two factors ensure that consumers will buy NFTs over traditional subscriptions (or non-NFTs) in the long run.
NFTs have more advantages than traditional subscriptions do:
Product quality: NFTs offer a great value proposition because users can choose what they want and expect when they want it and in exchange get something with it. This has made subscription products like Netflix, Spotify or Hulu very successful . On average people pay a monthly fee for these products instead of paying annually or simply stopping listening or watching at their own convenience. And because of this evolution in how people consume media, subscription revenues have been growing exponentially (and revenues from other traditional media sources are declining). NFTs can easily succeed because most users only pay once every month or once every few months; no annual fees needed! Since most users only need to pay for what they want to access on a regular basis and know what is coming next month’s feature will be, there is a strong alignment between user expectations and usage patterns which makes this model very convenient to maintain and extremely profitable! On average people spend 7 minutes per day on the internet on average – take 5 minutes out of your day each time you go online with our service – that means you could save up to 9 hours each month just by not paying into your monthly billing cycle! That’s an unbelievable return on investment!
Customer support – Most paid subscribers can sign up using an email address or phone number – so if something goes wrong during the billing cycle, you can contact Customer Support 24/7 . This makes us much more responsive than others who rely solely on automated systems to help customers troubleshoot billing problems (which
2. The benefits of NFT memberships
The benefits of subscribers include:
• Subscription management: you can manage subscriptions for multiple customers. You can also create a single subscription for all your users. This means that you have all the features of a traditional subscription without the headaches and administration associated with managing them on your own.
• Less payment volatility: you can guarantee that your customers will pay at regular intervals, rather than having them come to you at random intervals and forcing you to sell them off-the-shelf products.
• Better customer service: because your customers are paying on an ongoing basis, they don’t have to worry about what day it is, how long it will take them to pay, or how much money they owe on their account. Also, suppose they run into problems with their payment (e.g., they get an email from their bank saying they owe money). In that case, it’s easy to take care of that right away by cancelling their subscription and refunding them directly — avoiding the customer support issues associated with trying to figure out whether a credit card is still valid or whether an order has been canceled due to a system crash or whatever.
• Better security: if your users pay monthly instead of once a year (or any other interval), it’s harder for hackers to get at their accounts. If your users don’t know when their next payment is coming (which is usually when they forget), then these guys don’t have the opportunity to steal user data from within the system — which makes them more likely to be more careful about what information they give away in exchange for payments compared with people who only receive one-time payments (which we typically see in our industry).
If you’re interested in this topic, I highly recommend our recent post on this topic: Subscriptions: why NFTs are better than traditional subscriptions . I’ve been working with several friends who use NFTs as part of some kind of "subscription management software" and while it’s not quite ready yet, we hope this post will help make that transition possible! The post includes screenshots (below) taken from our app "Subscribers" where we provide a dashboard view into all subscribers’ accounts and displays monthly performance metrics. It also includes some visualizations depicting how many subscribers there are over time as well as some key metrics like churn rates (or percentage of users switching each month)
3. The drawbacks of NFT memberships
Product-centricity is the main reason why many people are thinking about subscribing to a product instead of buying it. The world is becoming more, not less, product-centric, and there seems to be an opportunity to disrupt this trend by creating a membership system that allows users to build their own products by selling their time instead of selling products. There are several factors that make NFTs superior to subscriptions: 1. NFTs will always be cheaper than subscriptions because they do not involve the cost of purchasing a subscription 2. NFTs will always be more flexible because they allow you to scale up or down as your needs change 3. NFTs can be used in any industry because they can integrate with other products 4. NFTs can be tailored for different types of users 5. NFTs can improve user experience (in fact, one could argue that it is the only way to improve user experience)
The drawback of NFT memberships is that they come with a very high price tag which is why some companies appear like dinosaurs when compared with startups (like Dropbox). However, there are plenty of cases where NFT memberships have been over-hyped and under-delivered due to the large cost advantage many companies have enjoyed for so long (think airline miles…). This has led some people to question whether paying so much would actually be worth it.
One reason for this might be we are now living in a world where we are increasingly using technology for almost everything: mail, email, YouTube videos, social media posts and so on. Any product today requires an API or SDK which means that many non-product companies now use them as part of their infrastructure too — something that was unheard of just 10 years ago! If you aren’t already using these services then it’s likely you will find yourself doing it soon enough anyway; but if you do then how do you decide how much value you are going to pay for them? You cannot compare any two products based on one dimension — or two dimensions at all! In fact, in this case such comparisons should not even exist; rather each product should evaluate its own value proposition first before comparing against others’ — hence why even if the same product costs $4 USD per month for the same amount of time in exchange for $0 USD per month (basically just your time), which one will have more value?
4. Why NFTs are better than traditional subscriptions
In this post, I will dig into a topic I personally feel is so important that it requires an entire blog post: why NFTs are better than traditional subscriptions.
I am not going to spend much time discussing why people think NFTs are better than traditional subscriptions. There are lots of arguments that fall into this category ranging from "fnaf is fun" to "Nintendo has lost the market". But what I would like to do, is look at the reasons why people think NFTs are good, and then compare them to the reasons why they think traditional subscriptions are good.
The reason I think that NFTs are more valuable and can be more valuable than traditional subscriptions, is simple: in terms of value per dollar spent, there is no other offering in the world today (other than perhaps pure play games) which can compete with NFTs.
In terms of price per dollar spent, a subscription for Netflix or Hulu or Hulu Plus provides you with many times the value of your monthly subscription for any one game on Steam or Xbox Live (and it is also true for subscriber-only games). This can only be justified if you believe that each month you get access to a far greater number of games (and each game has far greater value) than you do now.
In terms of customer service and quality of service, no other product on Earth currently provides as good an experience as subscription services — though this may not be true in all cases (there may be some exceptions out there). In terms of ease-of-use and simplicity, again there’s no other product available in the world today which compares well with subscription services — though again, this may not be true in all cases (there may still be some exceptions, but even here there may be some exceptions out there). In terms of ability to offer discounts/discount coupons leading up to game releases/anniversary events/etc., right now only NFT products can match what Netflix/Hulu/Hulu Plus/etc have been able to do for years – i.e., offer discounts on top of your paid subscription price for pre-existing games and corresponding event exclusives etc..
If a significant amount of money were dedicated towards making the software ecosystem more customer friendly – say $10 million – new subscription services could easily outdo those already existing today by offering significant improvements (e.g., notifications when your favorite series goes back on air etc.).
5. The future of NFTs
Subscriptions are still the dominant way of buying software, especially at the enterprise level. For most companies that haven’t made any major changes.
In this discussion we will focus on one specific type of subscription: the NFT (which stands for "non-financial"). Unlike a traditional subscription, which is a fixed amount, an NFT is usually perpetual and you can cancel it at any time. This is a significant advantage over a traditional subscription: you can cancel it whenever you want. And also a disadvantage: in addition to having no cancellation fee, there are also no transaction fees for canceling an NFT which can be as much as 100% of its value if cancelled before its expiration date.
There are some benefits to an NFT though:
• The cost is lower than other kinds of subscriptions (usually between $5-10/month)
• You can cancel it at any time
• It gives you flexibility in terms of when and how often you use the application (though more flexibility is better)
• It gives you flexibility in how often your data gets processed (from daily to monthly) and how much processing power it takes up It is worth taking some time to think through what your company’s specific needs are, because it will be one way or another that you will need to meet them. If they change then your application needs to too! But before diving into the details I would like to highlight three points that I find very useful for discussing this topic with different stakeholders (if possible):
- You should start from within your own organization – not from outside sources such as industry associations or academia – and have their input first before discussing with customers or partners. If you don’t have enough expertise on these subjects, then please contact me directly so I can mentor you!
- The biggest risk here isn’t that people aren’t willing to subscribe but rather that they don’t know how they’ll react when they do subscribe. I’ve had many conversations with people who share my values but who still haven’t given me their commitment either because they didn’t think about subscribing first or because they thought about signing up but didn’t want to commit everything upfront. Some people won’t even read the terms ("I’m too busy") so just make sure your messaging makes them feel comfortable before asking them for their money!
- When reviewing terms and conditions, make sure that everyone involved understands them fully so there isn
6. The challenges of NFTs
This is a guest post by Alex Zheng, a co-founder of Bamboo and one of the original members of the Lean Startup movement (where we discuss how you should and shouldn’t start a startup).
When we founded Bamboo and started to look at NFTs as alternatives to traditional subscription models, we were faced with two big challenges:
- We didn’t have a name for the product yet.
- We didn’t have enough data about the value people get from NFTs to make a compelling pitch. In other words: there wasn’t enough information to write an accurate evaluation of NFTs versus traditional subscriptions.
Fortunately, we had some insights into what most people do with their subscriptions, which helped us figure out what kinds of questions we needed to ask to make a case for NFTs in the first place: - What are people getting out of them?
- Are they willing to pay more money?
- Are they willing to give up some convenience or control?
That led us down this path: each time someone asked us whether they should pay more cash, whether they should give up convenience or control, or whether it was worth giving up less money for more convenience, we could tell them yes with confidence based on our conversations with our customers. That eliminated lots of potential objections that could still be made against NFTs — including that they are too expensive (because most people are not paying $1/month), too small (because most people don’t want discounts), too abstract (because most people don’t understand how much money it will take them away from doing something else). The next question was: how do we make this case? How do we make these distinctions clear in a way that makes sense? How do we distill the experience from each type of subscription-based service into something that can be communicated clearly and effectively without resorting to jargon or buzzwords? We did so by focusing on exactly three things:
A user’s understanding and comfort level around new technology.
A user’s understanding and comfort level around financial terms.
An analogy between this new technology being used as a replacement for traditional subscription services.
An analogy between this new technology being used as an upgrade over existing services — especially over current options like Apple Music or Spotify .
In other words, if any part of your customer journey is
7. The potential of NFTs
There is a lot of hype around subscriptions nowadays (and I’m sure there are some "journalists" out there who would like to write about it for their audience), so I feel the need to fisk it. And this is probably the best time to discuss it, because everybody has been talking about it, and nobody has written much about it.
It’s a topic that has been discussed in many places over the last year or two and yet nobody seems to have done much, if anything, new on the topic since then.
I think why is because people do not want to be told how they should be doing things. Nobody wants to be told that they should spend all their time making value propositions for their product and then when someone eventually asks them for a subscription, they have no answer. Nobody likes being told "You should spend your time doing something else".
As opposed to "subscriptions are good for you" or "subscriptions will help you save money" etc. etc.. A few people do talk about things that are more complex and interesting than just telling people what they can do with a subscription system (which is sometimes hard enough when there are lots of different ways of doing something). But these conversations tend to end up in discussions about what makes them work, how they work and why people like them. And those are topics nobody wants to talk about (because we already know all those answers).
So instead of talking about NFTs, somebody who knows how NFTs work will probably say something like: "Don’t try things too hard! Just focus on building value propositions! Then you will eventually get people to subscribe!" Except maybe not quite so long-winded or fancy as that but definitely a lot less advanced than talking about NFTs directly.
If I had to guess why nobody goes into this field very much in general terms at all, I would expect it would be because nobody wants to be told how they should be doing things; everybody wants something new and different (or at least different from what we have now); and everybody prefers being asked simple questions rather than complicated ones (which may or may not be true).