Recurring payment models are a beautiful thing for businesses. While this form of subscription commerce has always been prevalent with software and service providers, there are some stepping outside the boundaries of this comfortable spot and exploring a new way of making money while still attempting to wow users.
Subscriptions are appealing to businesses because of the relatively consistent, steady amount of cash flowing into the business every payment period (usually on a monthly basis). This consistency also brings in benefits like bank loans (due to their value of stability), and appropriate staffing and recruiting (due to predictable forecasts).
Canadian company Logic Software is gaining momentum with its new service, dedicated to serving the clients that are somewhere between an entry-level product management software like 37 Signals’ Basecamp, and more advanced products like their own Easy Projects.
Instead of simply charging users a monthly fee for usage, Logic is taking a different approach: it plans to generate revenue with their new product through affiliate sales. This is reminiscent of a service like Wave Accounting, which also generates money through targeted advertisements.
This is an interesting transition. Their new free product, called Birdview Projects, is targeting small busines project managers who need a relatively straightforward tool to make projects happen and keep track of progress.
That’s where the free comes in—it removes friction and takes payment out as a potential obstacle that could keep a user from trying it out. “Even though a lot of these companies are small (five to 10 people), their workflow can be quite sophisticated. That’s why tools like Excel or Basecamp just don’t cut it for them anymore,” says marketing manager Ozgur Nazilli. “They need to be able to easily scale, collaborate, and scope out projects.”
Naturally, Birdview Projects’ free-ness also plays into Logic’s hope that users will eventually move on up to Easy Projects. With Birdview Projects being free, Logic ensures that Birdview Projects does not take a chunk out of Easy Projects; instead, it diversifies its own streams of revenue by getting corporations to pay for data with Birdview Projects, while still getting subscription payments from users via Easy Projects.
Birdview Projects will be completely free for users, and will only generate revenue when users deem an offer valuable enough to purchase. While this is a path less travelled, it’s an interesting move for project management software that is looking to capitalize on big data and employ a new method of making money.
While it is currently funded by Logic, the team is currently seeking funding to expand Birdview Projects. (On a similar note, project management service Wrike raised $1 million not too long ago.) Instead of simply introducing a new product to a different type of buyer, Logic is a good example of how an established company can still be innovative and experimental. While this business model is not exactly new, I haven’t seen many adopt it in favour of something safer.