Today, eBay may be looking to subscription to amp up its ecommerce reach. Plus, Pipe, a B2B SaaS financial platform, raises $6 million. What’s all the buzz over? And finally, David Cancel drops the mistakes he says will tank even the best business idea.
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Shoppers, subscribers, sellers—rejoice
Apparently, there are murmurs in eBay land.
We know and love eBay as the classic ecommerce platform that’s nailed it in that space since the 90s. But, of course, they must keep up with the times. And a subscription offering may just be the way to do so.
Just this week, a seller said eBay sent a survey asking specifically about the issue, which we read in a report by Ecommerce Bytes. And this could mean good news across the board for those sellers who have apparently long requested that eBay look into the matter.
"This has been an ongoing subject on the boards," the seller writes on an eBay discussion board thread. "Maybe eBay is actually listening?"
The survey asked directly if the seller would use a store level between Premium and Anchor. It also included questions about the possibility of a monthly flat payment to increase the number of "free" listings that would be month to month with no contract or yearly obligation.
And we’re thinking—this type of move only makes sense for the retail mogul. For years, our friend Tien Tzuo over at Zuora has claimed that virtually every company will go subscription. And we are currently witnessing it, from transportation to entertainment, dining to retail. You’re hard pressed to find an industry that hasn’t dabbled in this model.
If you’re interested in more on that, we encourage you to pick up Tien’s book, Subscribed—all about the subscription revolution. We’ll have a full breakdown of that in our next episode, so check back if you’re intrigued (but too busy to read the whole thing).
For now, we’ll have our eyes on eBay to catch their next move. Needless to say, we encourage the subscription embracement.
What's down the Pipe?
Whenever a company like this completes such an impressive round, our ears are undoubtedly perked. And with Pipe, we see three young serial entrepreneurs create a solution for “the canonical cash flow issue in SaaS startups.” Pipe is, namely, a financing platform that provides non-dilutive financing to SaaS companies in the form of an instant cash advance—because until now, the solution for SaaS cash has primarily been found in dilutive equity rounds.
And we’ve seen too often, the tradeoff between cash flow and growth—many initial products see high costs that result in slow revenue growth because of these costs.
“In this stage of the company, founders lack the flexibility to offer their customers appealing monthly payment plans. Sometimes, founders have to discount the total value of a yearly subscription to get customers to pay in full at the time of purchase,” the folks at Forbes write.
We’ve seen it time and time again. But it doesn’t have to be this way. There are critical outlets with which you can offset these issues and grow with the success of your product.
Linked below, resources to help you out if you’re in this boat:
- Hard lessons from our first six months bootstrapping in SaaS.
- Choosing the right SaaS metrics for different stages of your company.
- We studied 6,452 SaaS companies. The findings will make you grow.
Lesson from the most important company out of Silicon Valley
In it, he points to General Magic, the documentary about “the most important company to come out of Silicon Valley.” In 1990, General Magic set out to make a pocket-sized computer, he writes. “The company was set to be huge, but instead became one of Silicon Valley's biggest failures. There were a lot of things that went wrong—but here are the three major mistakes that resonated most to me,” he says.
Here they are:
Ignoring shifts in the market
When you're establishing a company, you need to look at what's happening in the market and create a product that aligns around that shift. And in doing so, it’s not just about the product-market fit, but the timing. We can attest. We’ve done a lot of research on this, linked accordingly if you're interested in reading on.
Losing focus on the customer, or not even knowing who they are
By putting a constant feedback loop in your process, you can build faster and better products. Historically, we’ve seen people are miserably bad at collecting feedback from current and potential customers through surveys, because they’re sending really crappy ones. But there are concrete ways you can improve these—like by incentivizing enough and largely, and creating a community feeling. We sent five million SaaS customer development surveys to do a little test with this. Here are the lessons we learned from it.
Skipping the critical step of seeking market feedback
“When we founded Drift, we didn't have a product. We had a few ideas and were beginning to lay the groundwork for a sales and marketing platform. We also had some customers testing what we were building... But we knew that we weren't going to launch the product for at least a year. While most companies call this stealth mode, we made the conscious decision to start marketing immediately."
Why? Because their team wanted to build an audience prior, so when they were ready to launch, people already knew—and trusted—them. When they were set to sell, the audience was ready to listen. "We didn't need to then spend all of our time building trust, we could instead focus on getting our first paying customers."
This goes to show that ideas are powerful, but you can't just create a business on a good idea. It requires a steadfast combination of ideas: customer-centricity, killer teams, market fit, timing, testing, and learning.
That’s it for your final February episode of Recur Now. Check back here for more, and don’t hesitate to reach out to me at email@example.com, if you have news to spread, or input on any topic we hit.
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