Low interest rates made recurring revenue incredibly valuable, fueling the SaaS boom. Now that rates are rising, that math breaks. Basecamp is testing one-time payments instead of subscriptions, a shift that could lower costs for customers while rebuilding trust in the industry.
SAS was really popularized in an environment of very low interest rates. You saw SaaSes popping up, you know, left, right, and center, really after the 2002 recession when interest rates stayed pretty low, and then they totally bombed out after 2008. But the environment that we're in now is one where interest rates are just getting higher again, and in that kind of environment, the future value of revenue streams is going down. As a result, I would seriously consider alternative modes. I know that Basecamp is looking into this with this whole pay once thing. And I don't mean that anyone should be dogmatic about it in a particular way, at least not yet. But one should consider what is the way that you can best redeem the trust with your customers in a way that feels less expensive for them, is more redemptive for you, and that forms the basis of a relationship that will lead to recurring business that is the foundation of real long-term value.
