Comment by ttcbj

As a small business that started with a one-time/upgrade based pricing policy, and moved to a recurring policy, I don't think it is too late for tailwind to do so for future upgrades/improvements. I am saddened that they laid people off before trying. I understand doing that is a leap of faith/risk, but that is what you need to do.

The key thing they need to recognize is that some percentage of their customers are serious businesses that want them to continue developing/maintaining the software, and that these businesses will be supportive as long as the deal is the same for everyone (you can't ask them to pay out of the goodness of their hearts, as then they feel they will be taken advantage of by people who don't pay).

When we switched to a recurring pricing model, I thought it was going to be a disaster. In fact, I got an angry call from exactly one customer (who then remained a customer despite threatening to leave). I got subtly expressed approval/relief from many more.

The book "How to Sell at Margins Higher than Your Competitors" was helpful to me, and might be helpful here as well. The key is to realize that you want to sell to people who really value your product and will pay for it. You don't want to maximize volume, you want to maximize revenue x margin.

You already have an installed base of people who value your product enough to pay for it once, you just have to create a system that enables them to sustain the technology they value in order to get ongoing support/upgrades/fixes/etc. The people who are going to complain on hacker news about recurring pricing aren't the people you want as customers anyway.

If the majority of your customers don't value it that much, then you are pretty cooked. But you may as well find that out directly. If people really don't want to pay for the software, don't waste time creating it for them.

We made the switch about 20 years ago. Since that time, about 70% of our lifetime revenue has come from recurring payments. Had I not had the courage to make the switch, I would be writing now that the business has been an unsustainable mistake, but that would have been false.