Subscribed Quotes

“If you’re just managing expectations, instead of creating new opportunities, you’re not doing it right.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“And when you finally discover your customers, it changes everything about your company. It affects every role. With a subscription model, suddenly your development team is spinning up new services based on usage data, as opposed in response to the loudest voices in the room.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“IoT is about to change the world. But in order to be truly successful at it, we’re going to have to rediscover the people who are buying the things that we make.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“connectivity turns products into services, which allows businesses to build around outcomes, not assets.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“subscriptions are the only business model that is entirely based on the happiness of your customers. Think about it—when your customers are happy, then they’re using more of your service, and telling their friends, and you’re growing.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“you used to be able to do fine just by deploying SAP better than the next guy. That’s no longer the case. Today, IT is where you compete. It’s where you spin up new services, new experiences. It’s where you set up test beds and experiments. It’s where you iterate and scale. It’s where you find the freedom to grow.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“we use it to manage our recurring expenses. In other words, we use it to budget. Every year, we determine COGS, G&A, and R&D spends as a percentage of our ARR. Budgeting used to be a total nightmare, with all sorts of politics and loud voices. Now it’s actually pretty simple. All our department heads know that the best way for them to grow their budget is for them to contribute to growing our ARR. How are they using their resources effectively toward that single goal? When ARR grows, your budget grows.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Here’s the key takeaway—it is perfectly rational for subscription businesses to spend all their profits on growth, as long as their bucket doesn’t leak. Remember, as long as you are growing your ARR faster than your recurring expenses, you can step on the gas. As Ben Thompson of Stratechery notes, “You’re not so much selling a product as you are creating annuities with a lifetime value that far exceeds whatever you paid to acquire them.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“In the old world, you could grow by doing three things: sell more units, increase the price of those units, or decrease the cost required to make those units. In today’s world, you have three new imperatives: acquire more customers, increase the value of those customers, and hold on to those customers longer.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“I think everyone would agree that brands are still very important, but today you communicate your brand through experiences, not ads. The best sales pitch for Netflix is binge-watching a great Netflix show. The same principle applies to buying glasses from Warby Parker. Or conducting a Google search. Or looking up a prospect on Salesforce.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“The Manifesto for Agile Software Development was put together by a group of developers at a ski resort in Utah in 2001. It contains four simple but powerful value comparisons: individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation, and responding to change over following a plan. You can apply these principles to any kind of subscription service. Innovation doesn’t happen in a vacuum. It’s the result of iterating a concept over a period of time. Big “boom or bust” product launches can actually be a recipe for burnout: they result in unhealthy peaks and troughs of productivity and inspiration. The idea is to create an environment that supports sustainable development—the team should be able to maintain a constant pace of innovation indefinitely. That’s the only way to stay responsive, to stay agile.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Gmail marked the end of seasonal boom-and-bust product cycles and the birth of the never-ending product.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“If there’s one thing I’ve learned from working with all these large manufacturing companies, it’s that this shift can truly drive growth. What happened to the technology sector is going to happen to the manufacturing sector—I’m sure of it. Why? Because IoT allows you to rediscover your customers. It lets you learn what they really want. In fact, I would argue that the only true competitive advantage is your relationship with and knowledge of your customers. Think about it—what’s the first thing your competitor does when you put out a new product? It buys that product on the open market and sends it to the R&D lab, which then proceeds to dismantle it, benchmark it, and reverse-engineer it in a thousand different ways. Your competitors can’t do that with the collective intelligence of your customer base. That’s something that you, and only you, can own. It’s an incredibly powerful advantage.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Everything we make will have predictive maintenance, improved efficiency, better safety, better usability. And everything will be made to order. We won’t be cranking out millions of identical widgets and stacking them up in pallets in overseas factories in order to be shipped around the world anymore. We’ll be customizing objects much closer to home. As Olivier Scalabre points out, we’ll be replacing the classic “East to West” trade flows with regional trade flows—East for East, West for West. “When you think about it, the old model was pretty much insane,” Scalabre says. “Piling up stock. Making products travel around the world. The new model—producing right next to the consumer market—will be much better for our environment. In mature economies, productivity will be back home, creating more employment, more productivity, and more growth.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“in IoT, there’s no such thing as a straightforward B-to-B or B-to-C market approach. You can have many different kinds of customers. The physical device is just an enabler. Your value lies in your IP, the usage data from your customer base, and your ability to trade information across multiple markets.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Essentially, GE operates its own social network for heavy industrial machinery. It’s sort of like all these power grids and oil refineries and MRI machines have their own Instagram accounts, but instead of pictures of beaches or food, they’re sharing fuel consumption, hydraulic pressure, usage hours, decay rates. “First there was the consumer internet, and then the enterprise internet,” as Barzdukas said, “and now we’re moving into the third generation: the industrial internet. It’s not just about having our phones connected or our enterprise applications connected and operating on subscriptions models. Now it’s the big machines.” So far GE has built more than 600,000 of these digital twins. And just as social networks changed our world, this third-generation industrial internet is going to transform manufacturing.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Jon Slade, chief commercial officer of Financial Times, told Digiday, “We dialed up our marketing on a real-time basis. We were looking at buying patterns, opportunities in social, and spending our marketing budgets in pretty aggressive ways in an attempt to try and dominate a story. We then made sure that didn’t conflict with the efforts of our audience engagement team, so there was constant dialogue between audience engagement and editorial, and between marketing and acquisition.” There is at least as much innovation and creativity happening in FT’s acquisition efforts as there is in its exceptional journalism. FT also has a simple but brilliant formula for gauging reader engagement. Borrowing from the retail sector, they score every one of their readers on the multiple of three factors: recency (when did they last visit?), frequency (how often do they visit?), and volume (how many articles have they read?). Low scores indicate churn risks that their promotions group can approach with discount offers.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“The core of The Wall Street Journal is not its physical newspaper, but rather its journalists, its brand, its culture, its reach, its values. Its real value (and requisite expense) is in its content, not its format. That is something that people will pay for. If you start with the premise that you have loyal customers who identify with your brand, and you see this as a chance to engage them more deeply with a rich digital experience, then your new model becomes less reliant on the whims of advertising and more supported by stable, recurring subscription revenue.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Jessica Lessin of The Information says: “I still believe it’s much safer to build a business that doesn’t need any advertising to survive. Doing so forces you to focus 100% on your value to your readers. It’s the only way to make sure that what the news publishers deliver to readers in the future is smarter, more informed and more relevant than in the past.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Eventually, the current airline industry strategy of shameless fee charging is going to collapse under its own weight. It’s the depressing result of a product mindset that prioritizes add-ons and revenue extraction and devalues customers. What could a flying experience look like in the future? Well, to start with, it might also include cars and trains. Maybe United sends you a cobranded Uber car with a monitor that includes all your hotel and flight details, a drop-down menu to preselect all your entertainment and dining options, and light rail information for your destination city. Maybe that car’s arrival time at your house is synchronized to your flight’s actual departure time. Maybe you can start binge-watching Narcos in the car and pick it up on the plane where you left off. Maybe when you arrive at the airport, a service like Clear can speed you through security lines with a swipe of your boarding pass and a thumb scan, because all your standard ID information has already been paired with your biometric details. Maybe all these services could be wrapped up in a flat annual frequent-flier membership plan.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Subscriptions also don’t offer the option to buy when they conclude, which I view as a huge positive—that means that it’s in the carmaker’s interest, not yours, to keep its vehicles in great shape.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“in the technology industry we would call The Life of Pablo a minimum viable product. That may sound like a pejorative term, but a minimum viable product is actually incredibly important. Only after it gets something out in the market can a business gather customer feedback and use this data to iterate and improve in a continuous deployment cycle. The MVP is a defining principle of cloud software development, and Kanye applied it to his music-writing process.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“For five years, NPGMC (named after Prince’s backing band, the New Power Generation) offered a monthly or annual membership that not only let fans get new releases, but also provided access to prime concert seats and passes for events like sound checks and after parties. We had Sam Jennings, his digital producer, on our Subscribed podcast, and he detailed just how committed Prince was to creating a sense of value around his service: “They were getting about three or four new songs every month, live versions, remixes, all kinds of things. Plus an audio show. We called it an audio show but it was basically a podcast! It was essentially an hour-long radio program that Prince put together in his studio that we provided as a download. The idea was to create an ongoing experience for them, so that they want to be a part of it. They get the music, they get the downloads, but they’re also investing in a larger experience, which is the community of subscribers themselves. The question was how do we make them feel more like members, and less like customers?”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“about $50 to $60 million on a new season of GLOW or Godless. So how does Netflix justify its spending on a TV show or movie that it doesn’t “sell”? Again, let’s return to that portfolio effect. Regardless of whether a show is successful or not, investing in sharp new content helps Netflix to both (a) attract new subscribers and (b) extend the lifetime of its current subscribers. Those shows don’t go away! Together, they’re increasing the overall value of the portfolio. They are instrumental in driving down customer acquisition costs (as more subscribers sign up) and increasing subscriber lifetime value (as more subscribers stick around for longer). Netflix knows exactly how long it takes for a subscriber to flip from unprofitable to profitable. Spending tons of money on new shows means Netflix is happy to take a hit on the books in the short term in order to increase their profitability in the long run.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Warby Parker is averaging $3,000 per square foot of retail space (slightly under Tiffany’s number) by knowing that 85 percent of their foot traffic has already done extensive browsing online. They don’t try to clutter every inch of their retail space with stuff to buy.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“The bottom line is that there is no ‘retail apocalypse.’ That’s based on an obsolete dichotomy between ‘online’ and ‘physical’ retail. The real division is between data-driven, app-centric, flexible and omnichannel retailing on the one hand, and old and stale retailing on the other.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Instead of thinking about reseller margins and unit sales, Mooney is thinking about subscriber bases and engagement rates. It’s not about owning a guitar, it’s about being a guitar player and a music lover for life.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Forrester Research thinks we’re at the beginning of a new twenty-year business cycle it calls “The Age of the Customer.” Forrester sees a broad, systemic shift in capital models pivoting toward serving a newly empowered generation of customers who have the ability to price, critique, and purchase anytime, anywhere. Here’s how Forrester describes the new customer mindset: “The expectation that any desired information or service is available, on any appropriate device, in context, at your moment of need.” Customers have new expectations (and yes, those expectations have certainly been driven by millennials, but at this point, almost everyone shares them). They want the ride, not the car. The milk, not the cow. The new Kanye music, not the new Kanye record.”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Freed from a blockbuster mindset,”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It

“Second, and perhaps more important, what are other people out there doing?”
― Tien Tzuo, Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It