Should You Sell Lifetime Access to Fund Growth? lemlist's AppSumo Trade-off
Short answer: Offer lifetime access only when the net cash funds a defined growth constraint and the present value of future service cost remains comfortably below that cash. Cap licences, usage and support, reserve at least two years of expected delivery cost and preserve a credible subscription offer. Do not exchange unlimited future obligations for headline launch revenue.
A lifetime deal looks like customer finance without equity. It is also a contract to serve customers after their revenue has stopped.
The dangerous number is gross campaign sales. Platform commission, refunds, support, infrastructure and the recurring revenue displaced can leave much less useful cash than the launch suggests.
lemlist's campaign trade-off
Founder Guillaume Moubeche says lemlist's AppSumo campaign produced US$160,000 gross in two weeks. The marketplace retained 70%, leaving approximately US$50,000. A three-person team gained thousands of company users and handled thousands of support tickets.
In Moubeche's 365-day account, lemlist reported US$20,833 MRR at day 365, equivalent to US$250,000 ARR, and average monthly MRR growth of 33.19%. A subsequent product rebuild reportedly increased activation fourfold and free-to-paid conversion threefold.
The account does not publish licence count, refunds, lifetime-user hosting cost or how many later bought subscriptions. Without those figures, the campaign cannot be copied as a financial formula. Its value is the decision tension: distribution and working capital arrived with a large permanent user obligation.
My position is that lifetime deals are usually a poor default price. They can be a useful financing event when deliberately capped. If the business needs them repeatedly to pay current bills, it has sold tomorrow's capacity to cover today's weak recurring economics.
Use the Lifetime-Deal Liability Ledger
The Lifetime-Deal Liability Ledger treats every licence as both cash received and a future service claim.
| Ledger line | Calculation | Decision use | |---|---|---| | Net launch cash | Gross less platform, refunds, tax and launch delivery | Funds actually available | | Service reserve | Active licences x annual cost x reserve years | Cash not available for growth | | Support reserve | Expected tickets x handling cost | Labour obligation | | Displaced subscription | Buyers who would have subscribed x contribution | Opportunity cost | | Fundable growth cash | Net cash less both reserves | Amount for a named project |
Build base, high-cost and failure cases. The failure case should assume slower subscription growth and higher lifetime usage. A deal that works only when most buyers become inactive is not a sound offer.
Define what lifetime means
State whether access lasts for the customer's lifetime, the product's lifetime or the life of a named plan. Define users, workspaces, usage, support, integrations and future features. Ambiguity creates both mistrust and cost.
Do not promise unlimited usage if infrastructure cost rises with activity. A lifetime entitlement can include a measured monthly allowance, with separately priced excess usage. Make the limit visible before purchase.
Contract, consumer, tax and advertising requirements vary by country, and the meaning of “lifetime” may be scrutinised. Obtain qualified local legal and tax advice for the offer and honour existing promises.
Reserve the service cost before spending launch cash
Estimate annual direct cost per active licence using hosting, third-party usage fees, backups, fraud control and support. Multiply by expected active licences and at least two years. This is a working minimum, not a guarantee; a mature product may need a longer horizon.
Keep the reserve separate in management reporting, even if it remains in the same bank account. The guide on [numbers every owner should track](/business-finance/numbers-every-business-owner-should-track/) helps distinguish available cash from money already committed economically.
Support is often the immediate bottleneck. Estimate tickets per new account during onboarding and recurring contacts after activation. If a promotion introduces 2,000 customers in a week, average monthly support assumptions will understate the surge.
Give the cash one named job
Use fundable cash for a constraint that should improve recurring revenue: a product rebuild, a documented acquisition test or a time-limited hire. Give the investment a deadline and success measure.
“Growth” is not a job. “Reduce activation failure from 60% to 35% within 12 weeks” is. If the campaign finances general operating losses, calculate when another cash event will be required.
Keep the subscription price visible throughout. Lifetime buyers may produce referrals and evidence, but new recurring customers must eventually finance the continuing business.
Worked example: OutreachMint
OutreachMint sells 900 lifetime licences through a marketplace at £160 each. Gross sales are 900 x £160 = £144,000. These figures are illustrative.
| Deduction | Calculation | Amount | |---|---:|---:| | Marketplace share | 60% x £144,000 | £86,400 | | Refunds | 8% x £144,000 | £11,520 | | Launch support | 1,350 hours x £22 | £29,700 | | Net before future service | | £16,380 |
OutreachMint expects 630 licences to remain active. Direct hosting, third-party sending and attributable ongoing support cost £1.10 per active account monthly. A two-year service-and-support reserve is 630 x £1.10 x 24 = £16,632.
The apparent funding event is already £252 short before tax or displaced subscriptions. On these terms, the deal does not fund growth.
The company redesigns the offer: 500 licences at £240, a 40% marketplace share, a monthly usage limit and guided group onboarding. It expects 80%, or 400 licences, to remain active. Gross sales would be £120,000. After £48,000 marketplace share, £7,200 refunds, £8,800 launch support and a service reserve of 400 x £1.10 x 24 = £10,560, fundable cash is £45,440. If all 500 licences remained active, the reserve would be £13,200 and fundable cash would fall to £42,800.
It proposes assigning £28,000 to a 16-week onboarding rebuild and keeping £17,440 as contingency. Before approving that use, it prices the recurring revenue displaced by the campaign.
Account for subscription displacement
Ask buyers what they would have done without the deal. Survey answers are imperfect, so also compare conversion with similar traffic before and after the offer. Some lifetime customers would never subscribe. Others would have paid for years.
Estimate displaced contribution conservatively. If 80 of 500 buyers plausibly would have paid £25 monthly for 18 months at £20 monthly contribution, displaced contribution is 80 x £20 x 18 = £28,800. Cash available remains £45,440, but economic value before the rebuild is £45,440 minus £28,800 = £16,640.
The rebuild must lift paid-trial activation from 32% to 50% and produce 80 incremental subscription accounts within six months. If those accounts contribute £20 monthly for 18 months, they add 80 x £20 x 18 = £28,800, only just covering the £28,000 project cost. Under those assumptions, combined 18-month value is £45,440 minus £28,800 displaced contribution minus £28,000 project cost plus £28,800 incremental contribution = £17,440 before tax and timing. The deal can fund the work, but it passes only if subscription retention and displacement survive a downside case.
Avoid stacking discounts that let existing subscribers replace recurring plans cheaply unless the retention benefit is explicit. Pricing should support the business model described in [how to price a new product or service](/business-finance/how-to-price-a-new-product-or-service/).
Know the conditions for saying no
Decline the deal if marginal cost is high, usage is unpredictable, support is already stretched, subscription retention is unproven or contract terms prevent sensible limits. Also decline when the marketplace audience differs materially from your intended customer and their feedback would pull the product off course.
A smaller pre-sale or annual founding plan may provide cash with a finite service obligation. The right financing mechanism is the one whose risk matches the evidence you have.
Decide in 14 days
During days 1 to 3, model gross-to-net cash under three commission and refund cases. By day 6, estimate onboarding and two-year service reserves from actual pilots. In days 7 to 9, calculate subscription displacement and support capacity.
Write the licence cap, usage boundary, support promise and funded project by day 11. Have the terms reviewed where necessary. On day 14, approve only if the downside case preserves the service reserve and the named project has a measurable recurring-revenue outcome.
Related guides
Frequently asked questions
How many lifetime licences should I sell?
Set the number from support and service capacity, not the gross cash target. Calculate how many accounts your team can onboard during the launch window without breaching response promises, then test whether net proceeds after commission, refunds and reserves still fund the project. Start with a smaller cap when usage data is thin. You can open another tranche later, but you cannot easily withdraw a sold entitlement. Also consider customer concentration: thousands of low-revenue permanent accounts can dominate the roadmap even when subscriptions fund the company.
How many years of service cost should I reserve?
Use at least two years as an initial working guide, then run a longer downside case. The right horizon depends on product maturity, user activity and your promise. A stable product with cheap hosting may carry low cost for years; one dependent on paid APIs can become expensive quickly. Recalculate quarterly using active lifetime accounts rather than total licences. Do not release the whole reserve because some buyers become inactive after month one. Reactivation after a major update can restore the obligation unexpectedly.
Can lifetime customers be charged for future features?
Only if the original terms clearly excluded those features or defined a limited plan, and the change complies with applicable law. A vague promise of all future updates creates a strong expectation that new capabilities are included. Design the scope before the sale: core product, usage allowance, support level and optional add-ons. Communicate changes transparently. Contract and consumer rules vary across countries, so obtain qualified local legal advice before charging existing lifetime buyers for capabilities they may reasonably believe they purchased.
Are lifetime buyers worse customers than subscribers?
Not inherently. They may be early adopters who supply valuable feedback and referrals. The economics differ because payment no longer signals continued value, and their priorities may not match later subscribers. Analyse their activation, usage, support and referrals separately. Do not dismiss feedback merely because the customer bought a deal, but weight roadmap choices by the target market and recurring contribution. A concentrated promotion can also create unusual onboarding behaviour, so avoid treating its cohort as representative of ordinary acquisition.
Should I use gross campaign revenue in publicity?
You may state an accurate gross figure, but it is a poor management number and can mislead readers about available capital. Pair it internally with platform share, refunds, tax, fulfilment, support and future service reserve. Public claims should specify the period and currency and avoid implying profit. Advertising and financial claims must be supportable, and requirements differ by jurisdiction. For decisions, use fundable growth cash after obligations. That is the amount the campaign actually made available for the next constraint.
What is a safer alternative to lifetime access?
A discounted annual founding plan is often safer because service and payment periods remain aligned. A paid pilot, pre-sale for a defined release or limited multi-year plan can also finance development without an indefinite obligation. The alternative must still state delivery, refund and cancellation terms clearly. Compare net cash, fulfilment risk and displaced recurring contribution for each option. If customers refuse every finite offer but accept lifetime access, the deal may be exploiting price rather than proving durable product value.
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