How to Build a Successful Consumer Subscription Business

It’s much easier to build a subscription business that draws on an existing recurring consumer behavior, instead of trying to create a new recurring behavior. As a result, some categories of consumer spend just lend themselves more naturally to a subscription business than others.

This is what I call the "Hub and Spoke" model — leverage a core subscription userbase and then upsell additional offerings to gain a larger share of wallet from your core customers. Until recently, this option seemed out of reach for most Consumer SaaS companies struggling to simply generate enough demand to support a single product at scale.

On the other hand, the idea of increased productivity is a harder sell in the home. Generally speaking, consumers prefer subscriptions when there’s a clear cost savings for the “all-you-can-eat buffet” vs. a la carte purchases.

In short, subscriptions are not a panacea. Price changes do not solve product/market fit on their own. But, if your product gets better with more usage, addresses a naturally recurring behavior, and has a potential “upgrade tier” of users, a subscription model could be very successful.

The second most consistent pattern across these companies was an inseparable alignment between the product roadmap and the growth engine. Surviving in B2C is all about finding an efficient (aka cheap) growth channel.