TL;DR
The Developer LTD account fair market auction has now ended. To see the results, click here. If you want to know how Patrick came to the decision to offer more LTDs, click here to skip to the questions section below.
It’s come to our attention that there have been a handful of “aftermarket” sales of Lifetime Deal (LTD) accounts.
We would prefer that this kind of activity not happen at all.
All of the value which is captured in a transaction like this immediately goes to the seller and doesn’t ultimately drive better outcomes for GridPane.
It also creates a new support burden, which hasn’t been properly funded, because now we have a brand new person which we must fully onboard and train on all of our processes.
While I completely understand that people are entitled to sell something that they “own”, this isn’t a baseball card or a collectible rare comic book.
A Lifetime Deal account comes with all of the support and education and improvement that we constantly reinvest in within our company.
It’s a Lifetime DEAL, as in a lifetime agreement between two parties.
The buyer agrees to pay a certain amount of money to GridPane, and GridPane agrees to provide software and support and ongoing training.
If a lifetime Developer account that was purchased for $1500 is sold in the aftermarket for $3000, we now have a brand new customer that knows nothing about our platform AND we may have already lost money on the amount of support that the seller had consumed over the last 13 months.
On top of that, maybe the buyer feels awkward about ever reaching out for support.
So they ultimately have a bad experience and we get an undeserved perception of the platform not actually being that great. Perhaps they go on to share that negative experience. And they tell two friends, and they tell two friends…
Any which way you slice it, this damages our chances of success.
This activity negatively impacts the lifetime value of everyone’s accounts.
The Line
From the very beginning, I’ve wanted to draw a very clear line in the sand as to why we were going to be different from what most people have come to expect from a software lifetime deal.
That commitment to changing what the narrative should be about lifetime deals has gone all the way to me literally refunding people in full, more than a year later, for the entire purchase price of their LTD.
I’ve done this liberally because I want people to be completely satisfied with our product.
The vast majority of these refund requests have been as a byproduct of businesses being impacted by COVID.
We’ve done all of this because it’s the right thing to do. And because that is the kind of company that I want to run.
Most companies who refuse a refund, citing company policy or whatever bullshit reasoning, are basically saying: “We don’t care what you want, what you need, or what is best for you. We are keeping your money because you legally can’t do anything to stop us and we don’t give a shit what the negative PR looks like. You’re outside your refund window. Go away.”
We chose very early on to not work that way. We’re never going to work the “normal” way.
Long story long, we have a new challenge
One that I very much want to resolve.
I have a few ideas on this, which we will cover momentarily.
But first, an interesting observation:
One of the things that has become clear to me over the last 18 months or so, is that there are a non-trivial number of customers out there in the world, who want to do business with GridPane, but will NEVER do so… unless we sell them an LTD. These are people who will literally plonk down thousands of dollars in one shot… but they will never sign up for a monthly account.
My FB Messenger is filled with message requests from people saying some version of “I love your platform. I love everything you’re doing in the FB groups. GridPane is perfect for me. If only I had gotten in on the LTD!?!?!”
And then I check Stripe and I see that they signed up for a paid trial, canceled before they were ever charged, so they have a free account with us with a couple of sites on it.
And they’re never going to pay us a single nickel.
They would, however, give us a pile of money today in exchange for a better experience for all parties involved.
And while this makes no sense to me, it’s not my job to make sense of everything in this world.
It is my job to help my company, my customers, and my employees succeed.
In order to do that job most effectively, I have to be willing to adapt rapidly and frequently, to the changing demands of the market.
What the market is telling me right now, in no uncertain terms, is that I should sell more LTDs. The market is telling me that if I choose not to do so, the market will find them through other means. Up to and including causing GridPane to not only NOT profit, but to directly take financial losses.
Basically, I would be utterly stupid and reckless to not meet this market demand. Because it both wouldn’t fuel our growth, and it would undoubtedly cost us in the long run.
So I’ve decided on a few things:
- We’re going to do things from a technical perspective to make it much less practical/useful to resell an LTD.
- We’re going to continue to refund people who have come upon financial hardships caused by COVID.
- We’re going to sell some Developer LTDs. I don’t know how many, and I don’t know what we’re going to sell them for. The market is going to tell us those things.
- We’re going to test the market, see what the market says, and adapt accordingly.
- We’re going to run this test again in the future at some point. But I don’t know when.
What is this idea, what is the market going to tell us, what comes next?
The idea is pretty simple actually: we don’t know how many people want an LTD and we don’t know what people are willing to pay for them. The pricing for our LTD has gone up precipitously from when we first sold it. And people are paying significantly more on the secondary market than what we sold it for the last time around.
This can only mean a couple of things: we’re leaving too much money on the table, and we’re stifling our true growth potential with this sales strategy.
Here is how we will fix that: We will let the market tell us how many people want one.
And we will let each and every single individual tell us exactly what it is worth to them.
And from that data, we will determine what the fair market value is.
And that’s what we sell it for.
Everyone who bids above the market established fair value price will get an LTD for that price.
Afterward, we’ll publish the fair market value and our findings from this experiment, assuming that we complete a successful sale.
The goal here being that we permanently shift the narrative on what bootstrapped customer-funded companies can do with an LTD campaign.
I’m sick and tired of seeing founders get gutted on AppSumo. And then the thousands of people that ultimately paid them $15 or $20 bashing the shit out of those people for not being able to make it.
As their support costs ballooned, and as their 30 cents on the dollar ran out.
Those companies go out of business because they get slaughtered by all kinds of artificial forces in a completely bullshit “market” that is AppSumo.
Why not let the market create the market?
Maybe 235 people will say that a Developer LTD account is worth fifty cents. And we’ll only have three people that bid above our known cost.
Well, then those three people will get an LTD, each at the lowest price of any of the bids.
And the other slew of people won’t get an LTD.
Three months later, six months later, who knows, we’ll run this test again.
Maybe there will be an endless supply of people who want to pay us more than it costs us to deliver it, with a lifetime promise of a high-quality support team standing by, and we’ll do this every month.
I don’t know. I literally have no idea just how much demand is out there and what this kind of account is actually worth to people.
Next Steps
If you have an LTD account that you’ve purchased from someone else, don’t panic. You’re not going anywhere. You didn’t do anything wrong. And you don’t have to sneak around and wonder if we’re gonna kick you off the platform.
Ideally, we would have you just get your money back from the seller. And then we would issue them a complete refund. But I’m sure that will not be possible in all situations, for countless reasons.
If you can get your money back, by all means, do so and then come back to us and we’ll take care of you.
And your price will be the price that you already set in the open market.
If you don’t have a Developer LTD account and you would like one, please go HERE and fill in this Google Form.
Please do so before Monday, January 11th at Noon EST.
Indicate if you’re a current customer (not required) and tell us what an LTD is worth to you.
We’ll tabulate all of the bids and everyone who wins will pay the price indicated by the first person who didn’t win the bid. (Example: if it is 50 people who win, they will all pay the price indicated by the 51st highest bidder).
This means that worst-case scenario, you’ll pay LESS than what you indicated the LTD was worth to you.
Questions and Answers
I want to answer some of the questions I’m positive will come up.
First, and in my opinion, the most important one:
Valid question.
The short answer, in two parts:
1.) Strong Opinions, Weakly Held.
2.) Things change. When you get new information you should act on it.
Adapting and capitalizing on opportunities so that you can succeed and grow, in business, requires a lot of flexibility.
I’d rather that we are able to hire a new UI designer and accelerate our rate of growth than NOT do those things.
I’d rather feel stupid and have to explain things than stubbornly just watch the market pass me by. I can’t pay my employees in pride.
I didn’t make shit up last time (about not seeing a set of circumstances that would cause us to do this again) just as I didn’t make shit up after the first LTD sale (when we said we’d never do this again).
Back then, we got new information: a bunch of our loyal existing customers couldn’t buy at that time.
And the people who did buy were fine with the idea of us running a second round as long as the deal wasn’t as good.
So we said: sure! And our customers were thrilled. And we hired two new people.
Fast forward nine months later and now we have new information again: people are scalping them in the open market AND we have people who want to give us money and want very badly to be our customers… but they will only do so if we sell to them in this format.
Ok. Fine. Here we are.
You get lifetime access to all of the features and capabilities that are available on our Developer monthly/annual account, in exchange for a single payment.
We regularly add new features to all of our plans and the vast majority of those new features have landed into the current Developer tier offering.
We are actively developing new features for higher account tiers (Agency and Enterprise) and those features (multitenancy, whitelabel, automated remediation) will NOT be available as standard Developer features.
There may be future optional features available at additional fees.
If we ever sunset or replace the Developer tier for any reason your account would be grandfathered with all of the features that were available at the time of replacement.
As always, our goal is to work in good faith with our community to develop THE definitive arsenal of tools for serious WordPress developers and we believe that our Developer tier represents that ambition very well.
An auction model is definitively the fairest way to establish the real price. You can see detailed explanations of the mechanisms HERE and HERE.
The reality is that our arbitrary pricing last time around was ALSO higher than all kinds of people could afford. If we priced it based on what the average user could pay we would very rapidly go out of business.
Just look at every single AppSumo company that has gone out of business.
They gambled that the volume would offset the potential losses from the power users.
Or they just flat out gambled, period.
They had no idea what it would cost to support all the thousands of buyers.
We know our costs now, in a much more concrete way.
So we know what we can AFFORD to sell this for.
But we don’t know what it is WORTH to the market.
That difference is the value we’re creating. We very much want to know that number.
So we’re going to let the market tell us.
We will run this experiment again at least once more this year. Maybe there will be a constant demand for this (I suspect not) and we’ll run it more frequently.
We will respond to the demands of the market. If you miss it this time you can try again in the future. If it’s not worth as much to you, then you don’t need to buy it. Our monthly plans aren’t going anywhere.
We will continue to make investments in the platform and in our team. We’ll build a new UI, faster than we would have before. We’ll systematize our support processes. I don’t want to make specific promises here because those things have a magical way of ending up on our competitor’s roadmaps.
We will be forming a Client Advisory Board and those clients will be informed of the roadmap and they will serve as representatives and guides on behalf of the larger GridPane community.
What you bought from GridPane is a DEAL. An agreement between us and you that we will do business together on a certain set of terms of mutual understandings.
There’s no such thing as a “Used Hosting Partnership” marketplace.
We have an enormous cost of support and ongoing development and investment, and the people who made investments in us FIRST not only got the best deal, but they’ve enjoyed the largest upside as well, namely in the form of insane cost savings, performance increases, unmatched value for money, and world-class support and education.
They have also enjoyed something that they can’t find anywhere else in this market: they get to do business with real people who show up every day give 110%.
If there is a more accessible and transparent company in this space, please point them out to me.
I will make sure that we implement their best practices.
The only way that you can get a guarantee from us that we’ll do business with you, is by us agreeing to do business with you.
Selling these in an aftermarket damages what we’re trying to build, plain and simple.
You’ll be sent a checkout link via ThriveCart. You’ll be able to pay by credit card or PayPal.
We *may* offer multiple payment plan options but there will not be a monthly (12-pay) option. We’ll gather this feedback from the form as well.
As soon as your payment is completed, we will activate your LTD.
We have just the thing for you:
25% off, for the life of your account*. If you would like to upgrade to the Developer annual plan you’ll save $500 a year AND you’ll get access to all of the bonuses from BFCM just a few weeks back. Contact shawn{at}gridpane{dot}com and we will arrange your discount.
*This discount is available for the current Developer annual plan pricing only and can not be used in conjunction with other discounts. If you’re already on an annual Developer account and signed up before Black Friday 2020 you already have the best price on Developer annual.
Please complete this feedback form.
I will personally read all of them and if your question/request/feedback is unique I’ll follow up with you personally.
If your feedback is similar to multiple submissions, you’ll get a longer general follow up where I address all of the concerns en masse.
Then we won’t sell any LTDs. I’d prefer if there wasn’t a ton of demand for them.
We’ll still revisit this in six months or so, because maybe it will make more sense then. So everyone who does bid now will have at least one more shot.
If this turns out to be a whole lot of nothing TWICE then we’ll likely shelf the whole idea.
Not at this time. But we may well do so in the future based on market demands. If you’re interested in a Pro LTD please complete the feedback form.
We will follow the market.
If enough people indicate interest in Pro then we’ll run one.
(Note: almost every single person who has purchased a Pro LTD has ultimately upgraded to Developer).
No. Agency and Enterprise instances require thousands of dollars of customization and enhanced support.
If you have $100K burning a hole in your pocket, then we can deposit it in escrow and we can draw those funds down over the coming years as your Agency/Enterprise account is billing on a regular basis.
If you want to get on the waitlist for a new Agency account which will be publicly available soon, please complete this form here.
Please submit a support ticket if it’s a technical issue.
Please email Shawn{at}GridPane{dot}com if you have a non-technical question or otherwise need help with your account.
The auction has now ended.
Results
The final winning bid price for the January 2021 Developer LTD auction was $3000, which was also the most commonly selected bid with 13 people choosing that exact price. Without a tie-breaker mechanism, we feel obligated to accept all these $3k bids, although we’d have preferred to sell fewer, if there were enough price variations in the bids.
Price anchoring played heavily as all of the most common bids were either previous public sale prices or known secondary market prices.
The average of all bids was $1553.45.
The lowest bid (excluding erroneous non bids like “Ok”) was $49.
The highest bid was over $4K, who will be paying only $3k per our auction rule, same as the person who bid $3001, in true second-price-auction spirit.
The average bid of all existing Pro tier customers was almost exactly $10 higher than the average non-customer bid. The average bid of existing Developer customers was more than $1100 higher than the Pro bid average.
The most populous group of bidders were non-customers with roughly 2/3 of all submissions.
Winners have all received follow up emails.
If your bid was below the winning bid threshold and/or you would like to be notified when we run another LTD market test, please complete our feedback form here.