How To Start A Subscription Business Your Customers Will Love

The fact that you're here on this page – trying to figure out how to start a subscription business – is a pretty good indicator that you're already sold on this amazing business model.

That means I don't have to sing the praises of recurring revenue. Or tell you how everything – from tequila, to heated seats, and even animal skulls – can now be bought by subscription. Or how over 321 million online shoppers have already signed up for at least one subscription service, with that number growing more each year.

It's honestly kind of a relief. Because I'm getting a little tired of rambling on and on about the wonders of the subscription business model. Over the last 5 years, I've worked thousands of entrepreneurs and business owners who are building recurring revenue businesses of all kinds. I've seen some of these businesses blossom, and others go belly up.

That's why I want to share my thoughts with you today about the right and wrong ways to start a subscription business. In this article, I'll share 2 of the most important insights I've distilled after 5 years in the trenches of the subscription business world.

The Wrong Way To Start A Subscription Business

Let's clear things up right from the start and take a look at the wrong way to start a subscription business.

In my work, I speak with subscription entrepreneurs each week to help them build profitable recurring revenue businesses.

These conversations normally start something like this:

“Hey Matt! I've got this idea for a subscription. Basically, I want to teach people how to brew their own beer at home. What's the best tech stack for this project?”

Earlier in my career, I'd eagerly try and help this person. I'd recommend the best tools for subscription billing, community building, and email marketing.

Their eyes would light up as I detailed all of the power and possibility they'd soon have at their fingertips.

“You can do so many cool things with these tools! Your audience is going to love it…”

We'd wrap up the call, and I'd send this person on their merry way to start building the project of their dreams. All they had to do was piece together a few tools, throw up a sales page, and starting driving some traffic to it. The new thing you know, they'd have a solid base of subscribers that brought in consistent recurring revenue each month.

Except that almost never happened.

When I'd follow up with these folks to check in on their progress, 9 times out of 10 I'd get the same response:

“Hey man… So yeah, I'm still researching ThriveCart. I've heard SamCart is actually better for collecting recurring payments from Europe and Australia. I plan to get a few customers there. Plus, their Zapier integration is a little more robust. Oh also, do you know what WordPress host works best for subscription sites? I'm pretty sure BlueHost is gonna crash when I ramp up my traffic…”

After enough repetitions of this pattern, it dawned on me that this is the wrong way to go about things.

If the first question you ask about starting a subscription business has to do with tools or technology, you're not setting yourself up to succeed.

Unfortunately, I've seen people spend months — and even years — trying to assemble their perfect tech stack. Meanwhile, the energy and enthusiasm they have to bring their project to life starts to wane, until it ultimately becomes another dream that'll never see the light of day.

At the same time, I've spoken with people who've already built extremely successful subscription businesses with nothing more than a private Facebook group, hidden Dropbox folder, and a PayPal address.

What I've discovered from these resourceful entrepreneurs is that when you focus on just one thing when starting your subscription business, the tools and technology don't matter at all.

So, what is this one thing?

Let's take a look at it now.

The Right Way To Start A Subscription Business

Your ability to start a successful subscription business ultimately comes down to this:

Your ability to solve an urgent problem in the lives of your future customers.

And not just any problem will do. What you need to look for is what subscription expert Robbie Kellman Baxter calls a Forever Problem.

What's the difference between a regular ol' problem and a Forever Problem?

Well, a regular problem is something that only needs to be solved once – or has a large gap of time in between when it needs to be solved again. Regular problems aren't ideal for subscription businesses because once your customers solve their problem, they won't have an incentive to continue paying for your product or service.

For example, let's say you sell exercise equipment. And you're thinking about starting a subscription. You realize that kettlebells have risen in popularity, with many customers buying more than one over time. So, you think to yourself:

“Maybe I should sell a kettlebell subscription? Genius! A new kettlebell shipped to your door each month for only $150.”

While this might seem like a good idea at first, it's actually not. The reason it's not is because it only solves a regular problem – not a Forever Problem.

The regular problem it solves in the lives of your customers is owning a set of kettlebells. The reality is that after a few months, your customers would have all the kettlebells they'll ever need. You'd likely see people cancel their subscriptions after a month or two. As absurd as this example might seem, this is how so many aspiring entrepreneurs think at the outset of their journeys.

That said, there is a Forever Problem hidden within these purchases that would be the perfect foundation for a subscription business. Can you see it?

If owning exercise equipment is a regular problem that only needs to be solved once, staying fit is a forever problem that all your customers will have for their entire life.

Once you've identified a Forever Problem like this, you can work on creating the solution – or what Robbie calls your Forever Promise.

When you can solve a Forever Problem – like staying physically fit – with a Forever Promise you have the perfect foundation for a subscription business.

Here's what your Forever Promise could look like for this subscription business:

“In the Kettlebell Mastery Subscription, I'll teach you to stay physically fit and develop your strength with easy-to-use kettlebells. For only $99 per month, you get unlimited, 24/7 access to over 300 training videos, a private community area where you can ask for help from our team of coaches, and site wide discounts on all exercise equipment. Plus, you get a monthly 60-minute 1:1 coaching call with me so you can get personal feedback and recommendations on your training. And if you pay annually – giving you two months FREE – I'll throw in a FREE 35 pound kettlebell (this is the perfect size for beginners).”

For someone who's serious about getting in shape, this would be a pretty attractive offer. And one they’d happily keep paying for month after month, as long as you hold up your end of the bargain.

Final Thoughts On Starting A Subscription Business

Is learning how to start a subscription business really as simple as that? Obviously, it's not. On your journey to recurring revenue, there will be hundreds — if not thousands – of decisions that'll need to be made. Eventually you will need to ask questions about technology and find the right tools for the job.

That said, once you've identified the problem you want to solve in the lives of your future customers, all of these decisions will become a lot easier. You'll know what tools to pick because they'll support the vision and mission you've established. When you've found the “North Star” in your business, you can avoid falling into the trap of analysis paralysis and risk letting your big dreams become pipe dreams.

If you take nothing else away from this article, I hope you'll at least remember this:

As you start your subscription business, it's imperative that you focus on finding your customer's Forever Problem, creating an irresistible Forever Promise, and don't worry about the technology until you've already proven that people are willing to pay for your product or service.

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