From: acquiredfm
Launching a subscription-based online business, especially in its early stages, presents numerous hurdles, ranging from market skepticism and technical issues to personal financial strain and audience perception.
Initial Skepticism and Product Failures
The concept of subscriptions as a viable model on the internet was met with significant doubt, particularly from individuals in tech and VCs [00:00:04]. Many believed it “wouldn’t work” [00:00:06].
The initial product launch faced immediate and significant challenges:
- Failed Subscriber Goals The business failed to meet its one-day, one-week, and one-month subscriber goals “pretty significantly” [00:00:14].
- Technical Glitches A security certificate error prevented any purchases for the first 24 hours [00:00:26].
- Artificial Deadlines Self-imposed, ego-driven deadlines, such as a pre-scheduled announcement post from Kara Swisher, added unnecessary pressure [00:00:35].
- Poor Product Experience The product itself was described as “super confusing” and “janky,” failing to provide a good experience for either non-paying or paying customers [00:00:50]. The core issue was a misalignment between the business model and the product [00:01:13].
Post-Launch Struggles and Adaptations
Following the disastrous launch, radical adaptations were necessary:
- Immediate Overhaul The entire website was “torn out” over a weekend, reverting to the old design [00:01:18].
- Shift to Email Subscribers were informed that the format was “all wrong,” and content would be delivered via email, rather than primarily through the website [00:01:25]. This “accidental email hack” proved crucial for long-term viability [00:01:58] [00:07:56].
- Continued Financial Strain The founder had given up a six-figure job, incurred business school debt, and faced severe financial stress, leading to stopping credit card payments to preserve cash [00:02:17]. The thought of having to “go teach English again” to pay bills arose [00:02:51].
- Operational Errors Early errors included double charging subscribers, necessitating numerous refunds and significant customer support efforts [00:02:58].
- Workload Management The founder was simultaneously writing seven articles a week, producing and editing a podcast, and managing all other business operations [00:02:43]. The initial offering also included multiple subscription levels, including a high-tier option for direct chats, which proved overwhelming [00:04:21]. Trying to incorporate sponsored posts added to the burden [00:04:31].
Overcoming Psychological and Market Barriers
A significant challenge was the psychological barrier of potential subscribers:
- Perceived Instability Many potential subscribers believed the business would fail and go out of business, fearing they would lose their money [00:06:47].
- Building Trust Once the business demonstrated it was an “ongoing entity” and reached a milestone of 1,000 subscribers, new sign-ups significantly increased, as people felt their money would be “safe” [00:06:52]. This established trust was a key factor in growth [00:07:15].
Scaling and Feedback Challenges
Even with initial success, the business faced scaling and feedback mechanisms challenges:
- Growth Rate While initial growth was slow and steady after the initial struggles, the “exponential growth” often associated with word-of-mouth businesses was limited by networks being “exhausted” [00:05:46]. Growth was more linear over time [00:06:03].
- Feedback Mechanisms
- External Noise: Relying on social media platforms like Twitter for feedback proved problematic, as it disproportionately amplified the voices of a small, vocal minority [00:13:06].
- Subscriber Numbers as True Feedback: The most valuable feedback mechanism for a subscription business is the “subscriber number” itself, which indicates broad approval from a large, often silent, audience [00:13:28].
- Pandering vs. Independence A potential downside of the subscription model is the worry of “pandering to your audience” to prevent cancellations [00:14:16]. However, once an audience size is large enough, the business gains the independence to dismiss rude or disrespectful subscribers without significant financial impact [00:14:27].
- Content Delivery Evolution While email became crucial, the long-term vision remained a “website first” publication [00:01:47]. The aim was to make content accessible in various ways (website, email, podcast, SMS, RSS), aligning with the strategy of “differentiation” and “consistency” [00:08:14] [00:09:34]. Email, while powerful, is seen as a “tactic,” not the overall “strategy” [00:09:31].