Episode 845 | Lifetime Deals Revisited, Building is Not the Hard Part, and Confirming an Idea is Worth Paying For (Rob Solo)

0:00Welcome back to another episode of Startups for the Rest of Us. I'm your host, Rob Walling. And in this episode, I'm going to walk through a few listener questions and a few listener comments. We got a couple really helpful and insightful comments about lifetime pricing, selling a one-time deal. That was a few episodes back and we heard from none other than Davis Baer, who I had mentioned in that episode. Andy gave me more info on X Twitter. Actually, you can go read that thread if you are interested. We will link it up as well as someone else weighed in and then there are a handful of other listener questions that I'm going to be attacking today.

0:41Before we dive into today's episode, if you're a founder doing more than a million in ARR, you've probably hit a decision that really matters. A pricing change, a key hire, whether to raise funding or not. And realize there's almost no one you can actually talk it through with. Your team's too close to it, your friends don't get it, and so much of the advice online is for people 10 steps behind you. That's exactly why we started Tiny Summit. It's a small group of founders, all past a million in ARR, together for two and a half days, built around roundtables and the kind of conversations you can't have anywhere else.

1:14It's December 5th through the 7th at one of the top resorts in Cancun. At your stage, getting one of those big decisions right pays for the trip many times over. Most of the folks in the room are part of SAS Institute, our year-round community for founders past a million. Tiny Summit is where that community comes together in person. And if you join SAS Institute before the event, your ticket's on us. Get all the details and your ticket at tinyseed.com slash tinysummit.

1:58Let's move on to my first topic, which is a very thoughtful tweet from Davis Baer, who's the co-founder of Uform. And I had mentioned him a couple episodes ago about doing lifetime deals because we had a question about lifetime deals. And it's like one-time payments or lifetime deals, however we want to call them. And I am bearish on them in general. I wouldn't do them. But I called Davis and Uform out as a success story. essence that had done it. So Davis responded to me and said, in regards to the one-time payments, I would say overall it was a success for us, but I think it only works in certain circumstances.

2:35And I like that he did this because this is something I called out in the episode that I'm almost viewing the criteria more like freemium because it kind of is freemium. You get one payment, you do get some money, but then they're freemium from then on. And I was guessing, conjecturing, educated guessing, as we call it in the business, that that would be the case. And so returning back to Davis' tweet, some things that worked in our favor. I already had a decent following on X. I had a large email list from our other product called 1UP. I had a successful track record and 1UP's revenue meant we basically had infinite runway.

3:10Keep that in mind. Infinite runway to keep Uform alive forever, which helped with trust. On the flip side, most lifetime deals I see are people's first product. So it takes a lot of trust from a customer in someone who has not proven that they will stick with it long term. I think it made us$30 ,000 in the first few months and helped us get a foothold in the early going and to be honest, provided some validation. We also had and still have a free plan and there isn't really any additional cost or support burden that a pro plan user causes that a free plan user wouldn't also cause. So I'm going to assume that pro plan is the lifetime deal.

3:47We had both a lifetime deal and a monthly plan running simultaneously for a while but then eventually dropped the lifetime deal once we hit 5k of MRR. The upfront cash was nice, but recurring revenue was definitely the healthier business model. Would I do it again the same way? Yes. Is it easily replicable? No. In fact, we saw many Uform copycats come and try to do the same with lifetime deals and basically all of them are now shut down. So I appreciate Davis taking the time to write in, to put it on X and allow me to add more context to the, you know, the counter example. That's the thing is I often get questions that it's like, is this possible?

4:27Yes. Is it probable or should you do it? Probably not. You know, is often my answer with a lot of things, right? With freemium, with trying to build a standalone SaaS if you're not a developer, with not wanting to validate because XYZ reason, not wanting to stair-step because you want to jump to standalone SaaS even though you haven't ever launched a product. There's different things, right? And usually it's, well, you can do what you want, but in your shoes, I wouldn't. In my shoes, maybe I would because I have more of a track record. I have resources, I have experience, I have a network and an audience and all that stuff.

4:58So really appreciate Davis weighing in on this one. My next email, which he sent to questions at startupsfortherestofus.com is from Hussein from Scrollbook. That's at scrollbook.io. And he writes, Hey Rob, I'm a solo founder. I spent two years building Scrollbook, a visual learning platform for nonfiction, 252 titles as five-minute visual scrolls, free forever, and chapter-by-chapter breakdowns with infographics and professional audio. Plus, BookBuddy, an AI reading coach grounded in the licensed library, launched it April 17th of this year, 2026. The reason I'm writing is instead of charging a subscription, we priced it at$199 lifetime.

5:49And the first thousand got in for just$99 lifetime. Wow. We priced it this way in a category, which is book summaries and consumer AI, that is almost entirely subscription. I'd love your read on whether lifetime pricing survives this cycle for bootstrap consumer AI apps, or whether it's a founder mistake I'll be undoing in 12 months. Happy to send comp lifetime access if you or anyone on your team wants to check it out.

6:38Time price at this point, a thousand people for a hundred bucks and then 200 lifetime. I think similar to what Davis said, do you have what he has, which is a social following and a need to not have revenue now? If everyone else has subscription, why are they subscription? It's because subscription is the best business model in the world. And so why are you breaking that? If you go back and listen to the episode, it was what, four or five episodes ago. It was someone wanting to do more validation before committing to recurring support in a sense and keeping the product updated. But it sounds like for you potentially this could be to get more cash up front.

7:22If that's the reason, I'm intrigued by this. I wouldn't do$1 ,000 at$99. I might do$100 or$50. I can imagine doing it, because what are you going to charge for this monthly? $5 maybe,$50 a year,$5,$6. a month. So if you can instead get that$100 or$200 lifetime up front and you need the cash, I could be convinced and get those early users. I think the big thing for me is their virality. I still come back to me feeling like lifetime deals are like free plans. And free plans really only work well, they're only worth it usually if you have some type of virality, like built-in virality, not like, oh, there's a share button here.

8:06It's like for every person that signs up, 0.2, 0.4, 0.5, full 1.0 number of people also sign up, are also like pulled into it, like Slack, right? You sign up for Slack, you don't sit there on your own. You're always going to invite at least one person. And usually the viral coefficient is what this is called. Usually it's above one. For every person who signs up, you're going to invite three, four, five people, 10 people, 100 people. I don't see that here, but I haven't dug into BookBuddy and ScrollBook. I also wonder, why did you build two different products? Yeah, I guess this all sounds like B2C.

8:42And the only reason I could possibly see doing a lifetime deal here is to get more cash up front. Otherwise, you're selling a, basically, it's like a one-time sale. It's like you're selling a towel on Amazon, right? And you're shipping them a thing and that's it. That's fine, but you always need to be finding more and more and more customers in order to keep the business alive. I've done that. All of my stuff before SaaS up until 2008, 2009 were one-time products. And even.NET Invoice, which sold for$300 a pop, it was just a grind trying to find new people every month. And the only way we did it was through SEO.

9:19Ads worked for a while until they didn't. And I did some content marketing. I did partnerships that drove. So I would do these partnerships and it's like, oh, we'd have this amazing month,$5 ,000 in sales. And this was like a nights and weekends thing for me back in 2005, 6, 7. That was a chunk of money for me. And then the revenue would go back to the 2000, I think it was between two and three grand usually every month. All of that, such a big chunk of that was SEO. It was Google Organic. Or over time it was as we sold more and we had annual renewals. So we did charge$80 or$100 of annual renewal so people could get up-to-date features and all that.

9:59So all that said, if you don't have a flywheel of traffic and you're selling one time, I think this is not a good business. And if you're selling B2C and not B2B, I think this is probably not a good business. So I appreciate your question and I'd certainly wish you the best of luck, but those are my thoughts for now. My next email is one that I'm going to keep anonymous. and this is one if you want to receive a weekly email from me, a weekly essay, although last two weeks I haven't sent an essay because I've been finishing the book, but I am going to get back on that train. Go to robwalling.com slash subscribe and I have new and innovative thoughts that sometimes appear on the podcast but most of the time don't, in-depth thoughts, essays, all that kind of stuff that I'm sending out.

10:46So someone responded to that and it was in an email that I had sent about if you share your business idea should you worry about someone stealing it? And I wrote this long-form essay about it and even address in the age of AI. But if someone can build it in a weekend are you still confident that I shouldn't share my business idea? And I addressed that in the essay as well. And basically say, look it's like marketing distribution all that is the hard part. And he wrote back and he said, I got to see all of this firsthand this week. A friend of mine is an executive at a large tech company and his contacts there inspired several good ideas for internal products.

11:28He built a couple of them with Claude, but then nothing. And I asked him why he didn't work with the stakeholders to start iterating and improving the products. He said he couldn't convince any of them to take the app seriously. Now I see what you mean from secondhand experience. Building is not and generally has never been the hardest part. and I say that in terms of just marketing and finding people but in this case it's like intrapreneurship where you're doing it internally. He built the products and people still internally weren't willing to give him the time of day around it. So that's a lesson for us whether we are trying to market or convince folks internally.

12:03Certainly AI makes building products easier but there's still all the other stuff around building that so many people forget is hard. Another email response I received, I'm going to keep it anonymous, is someone writing in saying, everywhere we turn, discounts and startup programs will not support bootstrappers. We secured our first enterprise account, so an enterprise deal for$250 ,000, yet companies like Google, who have Google Cloud Provider GCP, and many others will only help if you are VC-backed. It seems crazy that you have to give up your kidney just to get a little help. Have you run into a similar thing?

12:41My answer is yes. And especially when I was bootstrapping and I've seen other bootstrappers run into this. The challenges with these startup programs is they want companies that ultimately have a lot of money to spend and it is giving away the razor to sell the blades type thing or giving the first piece of candy is free and they want you to start using GCP but they want to know that you have money to use it down the line. And they want some type of, what's the easy filtering mechanism? because if they just said anyone can do it and you can bootstrap, they're going to get hundreds or thousands of applicants and have to sort through them and that's expensive and costly and time-consuming.

13:19But if some venture capitalist has invested in them, then that's at least, it says something, it says you have some funding and it says someone has looked through your business and made sure it's somewhat legitimate, right? So yeah, I have seen it and it's unfortunate. It's interesting, you don't actually need to be VC-backed because TinySeed, through our accelerator, has a ton of these startup discount programs. And we are technically a fund, but it's not like you have to raise millions of dollars. I mean, our checks are in the$120 ,000 to$300 ,000 range. And so you don't have to raise that much to get them.

13:58But yes, this is the case. I've never seen exceptions to this. If you are out there listening, and you know of exceptions, or you have a list of all the ones that are maybe bootstrapper friendly, feel free to write into the show. You can hit questions at startupsfortherestofus.com or you can head to the website startupsfortherestofus.com, click ask a question in the top nav and submit audio, video, or text. It's a bummer to be a bootstrapper when it's not fair. And as a bootstrapper, you probably need the GC more than the funded companies do. But alas, that is the, I'll say it's a form of, I guess, It's unintentional discrimination, I think.

14:38I don't think they specifically want to discriminate against bootstrappers. I just think it makes their job a lot simpler in terms of filtering. My next question is from Johannes.

14:53Hi, Rob. Johannes here from Sweden. I have a question around signing custom agreements with customers. We have a product that we sell to large size and also enterprise customers. And from now and then, we get requests from the customer to sign custom agreements. It can be just a basic NDA. It can be a special license agreement, or it can be some kind of purchasing agreement. And my question is how careful we should be about signing those agreements and how much we should have those agreements gone through and reviewed by a lawyer. So my question is from an acquisition standpoint. when an acquisition is done, how much do the M &A firm or the buyer go through these agreements?

15:40And how much should we care about them? Because my point of view here is that we should try to be careful about not having a lot of agreements signed and really review the different terms there so we don't end up with a pile of agreements with hard terms like huge liability clause and similar things. So that's my question. What's happening with those kind of agreements during a due diligence of a company in like one to two million ARR range when it's getting purchased? And what can we do now to really prepare for not having any trouble with that further on? Johannes is a frequent attendee of MicroConf.

16:24We met several times in person, and I believe he's also written into the podcast in the past. He's a long-time listener, so thanks for writing in. This is a really good question and I've never answered it on the show. So I really appreciated him writing in. And for the record, he is the founder of SQL Spreads, sqlspreads.com. Use SQL Spreads Excel add-in to update data in SQL Server. And yes, I do realize I just said SQL and then SQL and then I went back and forth. So you can hit me up on X if you're annoyed by the fact that I flip-flopped there. So I think you answered your own question, Johannes.

17:03It's basically, yes, you should be aware of anything that you sign. These days, look, not legal advice, definitely not a lawyer. But these days, I do like that Claude and ChatGPT, they're not the worst at giving some legal advice. Now, there's a ton of liability. Have you heard about the, there was a case where someone, they were asking ChetGPT, I think, legal questions and saying like, well, if I did this, you know, what would the outcome be? And then when it got subpoenaed, he said, well, I was treating it like my attorney. So there's client attorney privilege, right? Confidentiality. And the judge said no.

17:44And so it was admitted as evidence and it was evidence against him because he was saying things in that transcript to ChatGPT that really were damning evidence. So you have to be careful with all this. Once again, I say this is not legal advice. But yeah, I think taking a first pass with AI is a thing. I think, man, by the time you're doing one to two million ARR, I do think that you need that contract's attorney who is not outrageously expensive. that you can have review definitely the more onerous contracts. In a perfect world, if you're going to cover your ass, yes, a lawyer reviews everything that you sign.

18:20Is that realistic for a bootstrapper? I would say not. Did I have a lawyer review everything that I signed or had my employees sign? No, I did not. Did I go to rocketlawyer.com years ago and download templates for employment agreements and IP agreements and basically skim through them and use them as is? I did. Did those pass the muster when we got acquired? Yes, they did. So it's that thing of I would from day one have$10 million of insurance and be an LLC and cover my ass on everything and dot every I and cross every T in a perfect world. And as a bootstrapper, you have to make trade-offs. You really do.

19:02And so this comes down to risk tolerance. If you're signing an NDA, do you need an attorney to review that? In a perfect world, yeah. Have I had an attorney review every NDA I've ever signed? No, I have not. I have read through them and these days I would also use AI to kind of give me a sanity check. But to get to the meat of your question, which is about during an acquisition, if you're being purchased for millions or tens of millions of dollars, 100 % they're going to go through everything you've ever signed and they're going to look at it. the thing that they are looking out for is like you said, it's these big liability clauses.

19:39Because if they buy you and then there's unkept liability for some contract that you've signed, that's a real problem. As I'm thinking through this, I think this would be a good question for me to ping over to Ainar and see if he's seen, because he's been involved in many, many deals and big deals as well, right? seven, eight figures. And I'm curious if there's ever been a contract that has really caused issues. Because I remember mine were not the cleanest, but everyone signed something. And I had signed a deal with a couple big Fortune 500 slash 1000 companies and I did my best to review them.

20:18I was aware of uncapped liability and that kind of stuff. But Johannes, I do think that you're thinking about it the right way. and the fact that you are even cognizant of it, I think is a step in the right direction. I'd also be interested in either going to Google or Claude or GPT and saying, what are some clauses? What are the top five clauses I should be on the lookout for that could kill an M &A deal later on? And getting that kind of list. Because the only one that I can think of would be a big liability swing. The other ones are where you've licensed out your IP or you've given away any type of IP rights.

20:59It's that kind of stuff that really gets at the value of what you are selling. Because what are you selling? Well, you're selling your code, your customer base, your marketing, your brand. It's those types of things. So anything that degrades those would be of concern. But I like the way you're thinking about it and I think as with everything it's a balance and you kind of have to balance the risk tolerance of it. And look, if you're doing 10, 20 million in revenue you probably want to afford an attorney to review everything. And when you're scraping by and doing a couple hundred grand in ARR and you're trying to get to that seven-figure point, that's where you may have to make a few compromises as you move forward.

21:40And for my last question of the day, this one comes from a conversation on X. Jason Cohen, he is a smart pair on X, said once you build your product, you'll need to find 50 people to try to sell it to, whether in sales assisted or self-serve. Why would you first build the product and then only later find out what to build? Because you're scared, not because it's wise. And he links to, we'll obviously link this up in the show notes, but he links to an essay called The Code Is Your Enemy. And it's an essay I think he wrote a while back. But then Mike Taylor, hammer underscore MT, chimed in. How do you know it's a problem worth solving though?

22:20way more problems exist than profitable scalable solutions for the vast majority of problems in the world the right solution is a service business or a charity which isn't the type of business most tech people want to build I also wonder how many successful businesses actually start with this kind of scientific customer first approach every single example I can think of built an idea first and then launched it sometimes pivoted after launch my theory is you can't get real feedback from people until you give them a real product genuinely curious though because lots of smart people I respect believe in the lean startup slash customer development approach.

22:52And then Johannes Radig wrote in and said, can we have a podcast episode on this Rob Walling? And then asked about Laura Roeder and how she validated Edgar slash Paperbell. All right, so here's my take on it. I know a lot of folks who have done either pre-sales or customer development conversations around this, like before building something. and I think the interesting thing is that the draw is to not do that and so there are obviously more examples of people who just launched something but I think even a lot of those people who just launched something a lot of those folks are launching something that either they paid for at their day job they used to pay for themselves they are truly scratching an itch like drip was built out of a problem that I was having on the prior SaaS app Hittail and so I knew there was at least one customer for it And that's not a great way to go.

23:46And that's why I then went and got 11 yeses. I was trying to get 10 and I got 11 yeses of people who would try it. There was at least some validation. I was building something. Jason Cohen got 40 yeses, I think, before doing WP Engine. A lot of things happen that way. Like Ruben Gomez was signed well. You would say, well, did he do a bunch of customer validation and conversations? And it's like, kind of. He actually went and put up, it was either a landing page or a website, started doing SEO, started getting some traffic and had a bunch of conversations with folks that were customers of BidSketch, which is his other SaaS app, right?

24:17That's proposal software. And so he was having these invisible conversations, invisible to us on the internet. We could say, well, you know, he just launched SignWell because he thought it would work and he didn't do any validation. He did a ton of f***ing validation. He did SEO, he did SEO keyword research to figure out, you know, what he could rank for and how much traffic he could potentially drive. He was having conversations with past employees of other electronic signature services. is he was doing market research out the wazoo. And it wasn't just, I don't mean going to Google and going to Reddit.

24:48I mean, it was conversations, validation in the truest sense of the word. I've actually just gotten out of doing a bunch of kind of research and thinking on this topic and interviewing folks who did validation, like Jordan Gall with Rosie. So heyrosie.com is that domain name. And you could say, well, I didn't see Jordan go out and get a bunch of purchase commitments, but you know what Jordan did do? And the reason I know is I just interviewed him about this and then included it in SaaS Launchpad, the book that I mentioned earlier. And I tell the story of how even a third-time founder with an exit under his belt went and did validation.

25:24And it isn't the exact copy of what Jason Cohen says. Did he go to LinkedIn and ask people to talk to him for 45 minutes and ask if they would buy it and that kind of stuff? No, I don't believe he did. But he did take several different ideas and he did research for demand, competitive research. He had a bunch of conversations and I know he did this because he talked to me and then he talked to Ruben about it and then he talked to some folks. He's a Tiny Seed mentor and he was talking to some folks at Tiny Seed and he had a bunch of conversations and gathered information and looked at the market and I do believe he actually had some potential customer conversations.

26:00I honestly didn't get so deep into that But he did a real solid assessment of the market, the space, and not just stuff you can find on the internet. This is the issue, is I see a lot of builders who they just want to IndiHack, right? They just want to kind of make a thing. And you say, oh, we'll go do research and validate it. And they want to spend 20 minutes going to Reddit and being like, oh, see, someone has a problem, I want to build it. Or I have the problem, therefore I'm going to build it because even if no one else uses it, at least I have it for myself. and that's a dumb way to go about it.

26:35It doesn't mean it's not going to work but I've heard that a lot and seen people build a lot of things that basically have a customer count of one and it's you. For you to take a few hours maybe build a landing page maybe have some conversations do the customer competitor research all these things. Again I'm knee deep in this or I was last week writing this out making sure I stand behind it for SaaS Launchpad because SaaS Launchpad is about all the early days it's about coming up with ideas There's a chapter called How to Find Startup Ideas. And then it's about how to validate. And I talk about the 220-200 framework I've talked about on the podcast.

27:09And then I talk about how to build a launch list and how to launch, find early customers, try to scrape and clot a product market fit, talk about the five stages of bootstrappers, bootstrap SaaS, product market fit, all that stuff. So all that said, yeah, most of the successful entrepreneurs I know when they go back to do it again, they do some type of validation. That's actually the biggest signal. For me, it's not, oh, there's several people who just launched or there's a lot of people who just launched, like a lot of tiny seed companies when we fund them, I will ask them how they validated.

27:43Many of them just built a bunch of things. Some people, it was their sixth or seventh thing they launched, but they killed a year or two doing that. What I've noticed is that I believe, mostly without exception, every second or third time entrepreneur that I've seen that's doing it does some validation, has some conversations does that research and digs in and there's specific questions you can ask like from the mom test and how do you find cold and warm folks to talk to and there's all these different types of approaches this is where you build your network often not your audience because audience is not the best way to do it but in any case, those are my thoughts I didn't do a whole episode on it, Johannes, but I am a believer.

28:27When we did Drip, I did some validation. I had customer conversations, I got 11 verbal yeses. I definitely did market research about how much demand there was. If I were to start another SaaS app today, you bet your ass I'd be doing all of this stuff that Jason Cohen talks about, that I talk about, that Ruben did, that Jordan Gall did, that there's a lot of folks. And I think that's telling, right? There's no one right answer and there's no one right way to do these things. But I do think there's kind of directions. There's like, I think being directionally correct, there's no map but there's a compass that can kind of tell you like, yeah, most of us have done this.

29:08Most of the successful people have gone in that direction. And I do want to weigh in, there was kind of an interesting later piece of that thread where Jason Cohen said, no one said you should find a problem before the idea. In fact, I've explicitly said the opposite. I said talk to customers before you build the idea. Tons of examples of that. Superhuman is a nice one. So he's not saying that you can just talk to customers to come up with ideas. It's more about vetting your idea. I often say validation, not coming up with a new idea. And Mike Taylor came back and said, yeah, I'm specifically talking about came up with the idea talking to potential customers before you have a product.

29:45and Jason says, my advice has always been to have an idea then make theories about what would have to be true for this to really work then test that by talking to customers. And that's what I'm saying as well, that's why I talk about validation. And in the chapter, how to find startup ideas, it's either seven or eight different approaches or kind of thought processes for how to come up with ideas. is it's like, look at a problem you're experiencing at a day job. Look at something that you pay for at your day job. Is there a problem that a spouse or a friend or a coworker is experiencing at their job?

30:26You know, there's all these things where, first you're looking for a problem. That's what I ask people these days. Hey, I want to tell you my startup idea. I say, first, tell me what problem it solves and for whom, right? And if you're not starting there, it's not B2B SaaS because you need to be solving some type of problem that some business has and will hopefully pay for. And that's the hopefully pay for part and hopefully you can reach them at a scale for a cost that is reasonable enough that you can charge enough that you can make it a viable business. Each of those things you validate as much as you can separately and together through conversations and research and talking to smart people in your network.

31:07And then with all of that, you don't get to 100 % validation. You don't get to where it's like, oh, the 100 % this will work. There's no way. Maybe you go from zero to a hunch, which is 10%, to doing validation and vetting, do you get the 30%, 40%, 50 % certainty that it'll work? Yeah, it's probably somewhere in there. And that's probably about as good as you're going to get without building something, without kind of diving in deep to this. So thanks, Johannes, for referring this over to me on XTwitter. And obviously, if you're out there in the wild and you see a conversation and you feel like you'd like to hear my take or the take of me plus a guest in a future episode, I'm at Rob Walling on Twitter.

31:49And you can follow me there. And of course, at Mention Me if you want to call something to my attention. Starting to run a little low on questions. You can head to startwiththerestofus.com, click ask a question in the top nav. Audio and video questions, of course, go to the top of the stack. Thank you so much for joining me. this week and every week. It's great to be in your earbuds. And this is literally one of the highlights of my week is when I get to sit down and record an episode of this show. And that's why I've been doing it every week for 16 years since 2010. Thanks for listening this week and every week.

32:27This is Rob Walling signing off from episode 845.

32:38Thank you.