I don’t have a neat graph of market cap over time for consumer subscriptions, but the market cap of these businesses in aggregate is likely larger than for B2B. Legacy consumer utilities like Verizon ($250B market cap) and Comcast ($236B) have been subscription oriented for years, but internet native companies have built even more value with subscr... See more

Upgrade paths can even exist without a de facto subscription. Both Chewy and Stitch Fix* offer an auto-ship feature, which gives meaningful discounts to the most active customers in exchange for predictable revenue.

What’s most impressive is that Netflix has increased prices many times in the last decade, on the order of ~10% each time, with little evidence of increased churn.

Subscriptions are attractive because they are predictable, but not every product or service is a natural fit for subscription.

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.

Third, a subscription offering should self-select your best customers and give others an aspirational path.

Second, the subscription must tie to a recurring behavior. The causality must flow from the recurring behavior to the subscription, not the other way around.

First, the subscription service must get better the more your customers use it.

Consumables like food are great opportunities for recurring subscriptions. Nearly 30% of Doordash customers opt-in to its Dashpass service because doing so unlocks better economics for those customers, who have a recurring use case for takeout food.