How do you protect SaaS subscriptions from being shared with non-subscribers?

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JASON LEMKIN

Agree 100% with Eilon Reshef and let’s add this one to the list of “Things You Spend a Lot of Mental Energy On in the Early Days (<$1m-$2m in ARR) That You Shouldn’t Have.”

You’ll realize later as you scale and get bigger than it doesn’t matter. It’s a rounding error.

The more strategic answer though is to design enough per-user value in the application itself that sharing doesn’t work well:

  • Make identity important. No point in sharing G Suite accounts, even though it’s sort of annoying how you pay for even dormant users $5/month.
  • Make reporting and analytics important. Once your app does user-level analytics and reporting, the senior stakeholders won’t want folks using shared accounts, because the per-user analytics won’t work (think Salesforce, if you couldn’t track activities per rep). Many apps launch without real dashboards and analytics. Once you add them, a lot of things change.
  • Make auditing and compliance important. If a paper trail of who did what matters, customers will buy a seat for each user.
  • Integrate with other apps that leverage identity. Even if your app can be shared, if you facilitate integrations with other apps that leverage identity, your users won’t want to share a single account with those integrations.
  • Encourage it, but cap it. Maybe it’s even better if very small businesses share accounts, but cap usage. When they are ready, they can expand into larger editions. Maybe let folks use the app the way they want to, when they are small. Maybe even offer a free edition for low-level users. This will discourage sharing, and then add a “choke” for the ones that exceed caps.

This issue, like most abuse issues, feels frustrating in the early days but later fades away once you see what levers really matter.

But do work to manage it down as best you can. And let the abuse at the edge just go. It’s not worth the energy to combat the edge cases here. They take too much precious time away from doing value-added things.

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Published on April 1, 2018

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