Choosing a Business Model
Consumer Subscriptions
What Are Consumer Subscriptions?
Consumer subscriptions are when companies charge a monthly or yearly fee for consumer software. Examples include Spotify, Calm, and Fitbod.
Subscriptions make a vertical with historically high churn rates much more investable by creating pricing lock-in and recurring revenue.
The Psychology of Subscriptions
Calm used to sell their app for a one-off price of $10. When they switched to charging $5/month (or $60/year) instead, they actually saw a jump in both downloads and paying customers.
Why? Because people love subscriptions, even when it makes no logical sense financially. The brain thinks: "I can cancel this whenever I want" — even though most people end up paying 10–100x the original one-off price over time.
The lesson: people are willing to pay for quality, and the perceived low monthly commitment lowers the barrier to starting.
Key Differences From B2B SaaS
Unlike B2B SaaS, consumer subscription businesses don't really have the ability to land and expand — there's no organisation to grow into, just individual users. Growth comes almost entirely from acquiring new subscribers rather than expanding revenue within existing ones.
This makes customer acquisition cost (CAC) and churn management especially important: you need a steady inflow of new subscribers to offset natural turnover.