Subscription Goal Quotes

Innovation and disruption are ideas that originated in the arena of business but which have since been applied to arenas whose values and goals are remote from the values and goals of business. People aren’t disk drives. Public schools, colleges and universities, churches, museums, and many hospitals, all of which have been subjected to disruptive innovation, have revenues and expenses and infrastructures, but they aren’t industries in the same way that manufacturers of hard-disk drives or truck engines or drygoods are industries. Journalism isn’t an industry in that sense, either. Doctors have obligations to their patients, teachers to their students, pastors to their congregations, curators to the public, and journalists to their readers--obligations that lie outside the realm of earnings, and are fundamentally different from the obligations that a business executive has to employees, partners, and investors. Historically, institutions like museums, hospitals, schools, and universities have been supported by patronage, donations made by individuals or funding from church or state. The press has generally supported itself by charging subscribers and selling advertising. (Underwriting by corporations and foundations is a funding source of more recent vintage.) Charging for admission, membership, subscriptions and, for some, earning profits are similarities these institutions have with businesses. Still, that doesn’t make them industries, which turn things into commodities and sell them for gain.

we use it to manage our recurring expenses. In other words, we use it to budget. Every year, we determine COGS, G&A, and R&D spends as a percentage of our ARR. Budgeting used to be a total nightmare, with all sorts of politics and loud voices. Now it’s actually pretty simple. All our department heads know that the best way for them to grow their budget is for them to contribute to growing our ARR. How are they using their resources effectively toward that single goal? When ARR grows, your budget grows.

percentages, that’s a Big Win toward a Rich Life. ☐  Fixed costs (50–60%) ☐  Investments (10%) ☐  Savings (5–10%) ☐  Guilt-Free Spending (20–35%) ☐  Reassess current subscriptions (cut if necessary). ☐  Renegotiate cable and internet bills. ☐  Revisit spending goals: Are they accurate? Are you actively saving for them? ☐  If your fixed costs are too high, it may be time to look at a cheaper rent (or AirBnB’ing a room out,

They can even end up pitting coworkers against one another, accidentally promoting behaviors that undermine the progress of the group as a whole. One of my favorite examples comes from the heady days of America Online (AOL). The company would routinely send out CDs in an attempt to get people to sign up for its product. One group within the company, responsible for acquisitions, was given financial incentives for hitting subscription goals. And so all tactics were designed to do just that: sign people up. There were offers of 100 free hours in the first month, which became 250 free hours, then even 700 hours. I remember when the offer got to 1,000 free hours, as long as they were used in the first 45 days (which left 1.7 hours of sleep per night for anyone who could take advantage of the promotion). It worked. Whatever tactics the acquisition group members developed were designed to do one thing and one thing only—maximize their bonus. The problem was there was another group responsible for retention; they had to find ways to get all the people who had canceled their subscriptions to come back. By creating a system in which each group was preoccupied with its own metrics without concern for anyone else’s or even what would serve the company best, the leaders of AOL had effectively incentivized their people to find ways to cost the company more money.

Most car dealers make the majority of their profits from servicing cars. They treat vehicles like a subscription service, expecting people to visit their service centers multiple times a year for many years. This is the main reason dealerships have fought to block Tesla from selling its cars directly to consumers.* “The ultimate goal is to never have to bring your car back in after you buy

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Instead, I argued, the goal of business should be to start with the wants and needs of a particular customer base, then create a service that delivers ongoing value to those customers. The idea was to turn customers into subscribers in order to develop recurring revenue. I called the context for this change the Subscription Economy.

You don’t buy Hyundai’s new hybrid car the Ioniq—you subscribe to it, for $275 a month. It’s a lot like picking a cell phone plan: pick your model online, choose between a twenty-four- or thirty-six-month plan, select your upgrades, then walk into a dealership to pick up your vehicle. No price haggling, no loans, no back-office pitches. “Our goal is to make car ownership as easy as it is to own a mobile device,” says Mike O’Brien, vice president of product planning for Hyundai.

I wrote an article for Fortune advising people not to go to business school. I argued that it was a waste of time, that for the past hundred years, business schools basically taught one idea: The fundamental goal of every business is to create a hit product, and then sell as many units of that product as possible, thereby diluting fixed costs in order to compete on margins. I said that this model was over, that the situation has changed.

One of my favorite examples comes from the heady days of America Online (AOL). The company would routinely send out CDs in an attempt to get people to sign up for its product. One group within the company, responsible for acquisitions, was given financial incentives for hitting subscription goals. And so all tactics were designed to do just that: sign people up. There were offers of 100 free hours in the first month, which became 250 free hours, then even 700 hours. I remember when the offer got to 1,000 free hours, as long as they were used in the first 45 days (which left 1.7 hours of sleep per night for anyone who could take advantage of the promotion). It worked. Whatever tactics the acquisition group members developed were designed to do one thing and one thing only—maximize their bonus. The problem was there was another group responsible for retention; they had to find ways to get all the people who had canceled their subscriptions to come back. By creating a system in which each group was preoccupied with its own metrics without concern for anyone else’s or even what would serve the company best, the leaders of AOL had effectively incentivized their people to find ways to cost the company more money.