don't take my money every month.

This week, I have been thinking a lot about how to build a software business.

So here is what I learned in 1 minute.

See, there are two ways to build a software business:
Charge a flat fee for software.
Take a percentage of revenue.

In the early days of building Nas.io platform, we made a firm decision to go with percentage take rate.

Instead of charging $50/month, we charge 8% of revenue made on the platform.

The concept is simple:
Software should be free.
We should only succeed when you succeed.

This means you won't make money fast.

It’s much faster to make money when you charge for the software. But the issues arise when 90% of your customers are paying you every month and only 10% of them find value.

Everybody wants to try to start a community.
Only few succeed.

Everybody wants to start a Youtube channel.
Only very few succeed.

A few months later, they all churn.
I’ve seen it happen with many platforms.

You can’t build a 50 year business when 90% of your customers are not getting value.

Long term businesses, in my opinion, are 100% aligned with their customers.

The bigger a customer gets on Nas.io, the more revenue we make. So we invest more in that customer.

Incentive alignment is a real thing.

There are many caveats to what I wrote above.
If your software is cloud storage, then maybe you just want to charge flat fee.

But you get the idea.

You and the customer should be one.