4 reasons why subscription startups are gaining traction
Venture capitalists have steadily increased the amount of startup financing they're pouring into companies that deliver products straight to customers. The subscription model is an area poised for even more growth.
There's truly a service for just about anything and there are four reasons why startups are following a subscription model:
1. They can attract customers
The internet allows subscription services to attract new customers with ease. Strong marketing efforts that include social media utilization also go a long way toward building a customer base.
According to Inc.com, social media is helpful because it means startups don't have to focus as much on marketing costs. For example, a video from Dollar Shave Club went viral when the company first launched in 2011. They experienced immediate success and were later acquired by Unilever for $1 billion in 2016.
What's the lesson? Subscription services can focus on making an appealing product or service while building a strong brand online where their potential customers are congregating.
2. Startups can scale with ease
Startups face a delicate task of increasing revenue without increasing incremental costs. Inc.com stated in order to increase revenue, subscription startups have to retain customers on a fixed monthly interval. This recurring revenue helps increase the startup's value because investors see fixed income as reliable.
With more confidence, a startup is able to then set more realistic and reliable expectations for the future.
3. Customers like simplicity
Most subscription services follow a "set it and forget it mindset" so customers don't have to reorder every month. Subscribers want items to arrive at their door hassle free.
According to Entrepreneur, customers also enjoy a subscription model because they know exactly what they're getting and for how much. These details allow them to stay on budget because for many people, subscriptions provide valuable items at a reasonable cost.
4. Global growth
Startups can reach a global audience by implementing a subscription model. If a business is successful in the U.S., a company can consider overseas expansion. Inc.com said this type of growth is attainable for subscription services.
Startups must be on the lookout for the next big trend, and right now, subscription services are it. Consumers increasingly prefer to subscribe to products, and startups would be wise to take advantage of this mindset.
Content presented by Bridge Bank, offering flexible, customized solutions for entrepreneurs.
Recent NewsBridge Bank Hires Abby Walls as Vice President, Relationship Manager for Corporate Banking in Southern CaliforniaBridge Bank Accelerates into 2017 with $4 Million Financing to BuyerQuestBridge Bank Reaffirms Commitment to Banking Technology and Innovation Companies
Recent InsightsHow startups can help senior citizensThings to know about 'decacorns'Can startups succeed away from Silicon Valley?
Don't miss the #Fintech boat, US administration to focus on industry comptitiveness according to @Nasdaq: bit.ly/2mVvnyZ - about 1 month 7 days ago@Fortune discusses how the VC funding gender gap is actually getting worse: for.tn/2nzP4sW - about 1 month 1 week agoWhat will determine the future of #fintech? According to @TheNextWeb, it’s #AI. Read more: bit.ly/2moerie - about 1 month 1 week agoAccording to @TheEconomist, private equity deals are heating up. Find out why here:econ.st/2m1sSZw - about 1 month 2 weeks agoJoin leading dealmakers for a live webcast on financing emerging growth companies w/ debt ft. Mike Lederman on 3/16 bit.ly/2m3JFKl - about 1 month 3 weeks agoBe sure to check out @Entrepreneur’s list of the top 12 #fintech companies to watch: bit.ly/2lQ4jA0 - about 1 month 3 weeks agoAn Indiana Senate panel has approved the advancement of a bill intended to reduce solar power incentives.bit.ly/2le7QFP - about 1 month 3 weeks agoWhat are the advantages of Regulation A+ venture capital? @Forbes has the answers here: bit.ly/2mctMoK - about 1 month 4 weeks agoAccording to @Nasdaq, renewable resrouces are among the top global trend creating invesment value this year: bit.ly/2kCVhCI - about 2 months 4 days agoCleantech venture capital is on the rise thanks to newfound market confidence. So what does its future look like? bit.ly/2lXvCFQ - about 2 months 5 days agoCEO Dan Myers discusses Bridge Bank growth and our approach to the current market, read more from TechFlash Editor,… twitter.com/i/web/status/8… - about 2 months 6 days agoCheck out the #cleantech startups that VCs have their eye on for 2017: bit.ly/2jYooot - about 2 months 1 week agoWhat does the future of clean energy look like under the Trump administration? @mercnews has the answers: bayareane.ws/2kAyNWF - about 2 months 2 weeks agoThe startup industry is headed internationally as more startups apply for funding. Read more on @Forbes bit.ly/2kALikZ - about 2 months 2 weeks agoAccording to @Bloomberg, #LifeSciences isn’t just thriving, it’s paving the way for new innovation. Read more: bit.ly/2kpAZOy - about 2 months 2 weeks agoClient @BuyerQuest demonstrates continued growth and innovation as they secure $4 million in financing bit.ly/2kazipW - about 2 months 3 weeks agoThe biotech era is not over yet. @TheStreet tells us how the sector will rebound with 3 key factors. bit.ly/2jfHhhK - about 2 months 3 weeks agoSilicon Valley, want to know what to expect under Trump’s administration? @Recode has the answers and more. bit.ly/2j5Oi9q - about 2 months 4 weeks ago@AppDynamics prepares to be the first #IPO of 2017...but it comes with a catch. @CNBC explains: cnb.cx/2iTzaHc - about 3 months 3 days agoGrowing difficulty in raising Series A and B funding could mean a rocky road for 2017: bit.ly/2iSbYwS - about 3 months 1 week ago2016 was a great year for #VentureCapital investing, even with the number of #startups falling by 12%. Read more: bit.ly/2j6ZlhI - about 3 months 1 week ago@TheStreet shares 17 thoughts on #biotech stocks as we head into 2017. Read more: bit.ly/2hYgsCN - about 3 months 2 weeks ago@TheStreet shares 17 thoughts on #biotech stocks as we head into 2017. Read more bit.ly/2hYgsCN - about 3 months 2 weeks agoStart the week off with "10 Tech Investing Quotes From the World's Best Venture Capitalists." @MotleyFoolTech bit.ly/2iJXY8j - about 3 months 2 weeks agoBridge Bank expands East Coast Presence with a new office near Research Triangle Park: bit.ly/2hbqvRi - about 4 months 2 weeks agoSouth meet West! We’re excited to announce our newest location in North Carolina: bit.ly/2hbqvRi - about 4 months 2 weeks agoBridge Bank expands with new clients, new teams, and a new office! bit.ly/2hbqvRi - about 4 months 3 weeks agoWhat lessons might a YouTube star have to share about entrepreneurial success? bit.ly/2gNugMz - about 4 months 3 weeks agoWe're prepared to provide flexible and creative solutions for renewable energy generation facilities: bit.ly/2ddvQpw - about 4 months 3 weeks agoStartups are surviving longer and SMB owners are seeing great success: bit.ly/2g2FNrq - about 4 months 3 weeks agoYour #startup is nothing without customers. Start measuring #NPS: bit.ly/2fWttc7 - about 4 months 3 weeks agoTelling your company's story can help secure critical funding: bit.ly/2fMZHKf - about 4 months 4 weeks agoSBA reinstated the 504 refinancing program. What does the program mean for your business? bit.ly/2dG1qMT - about 5 months 3 weeks agoBridge Bank is the smarter banking choice for growing tech companies: bit.ly/2d4L4kI - about 5 months 3 weeks agoMarket your #startup, and get the most bang for your buck with these #tips: bit.ly/2dN8POE - about 5 months 3 weeks ago via @Entrepreneur