Three Conditions Under Which a Membership Business Keeps Running, and Three Routes by Which It Breaks

Starting a membership business gets explained as a launch procedure. Pick the type, design the service, prepare the system, make the content, attract people, go live. To that get added the mechanism of recurring billing and the management of the churn rate.

As practice, the procedure works. Payments and delivery can now both be prepared by one person.

Read the list to the end and the contents of the items line up on a single requirement. Putting something out every month. That content production comes to the centre of the procedure, and that post-launch management becomes management of the churn rate, are consequences of that requirement. The classification of types and the selection of systems are lined up as means of satisfying it.

The requirement does not come from the members. It comes from the format. The billing cycle itself builds, on the member’s side, a frame that counts consideration in monthly units. The bearer accordingly puts something out even in months when there is nothing to put out.

One question sits unanswered inside this arrangement. Where do you place the reason a member is still there next month? In most accounts the question gets answered on the side of the content. Put out something new every month. Keep providing value. The arrangement, in other words, is that the reason for staying is what the bearer keeps supplying.

Adopt that arrangement and members become dependent on you. And being depended upon looks, as a business, stable. Looking stable, there is no occasion to notice that this is where the problem is. The occasion arrives when the bearer’s side stops. Health stops it, and so does a shift of interest. At the point it stops, the place stops too. Only then does it become clear that the ceiling of the business was the bearer’s output.

A question that gets no answer here comes first as well. What to charge, how many to accept, on what cycle to bill: no figures are placed on those three. Amount and cycle are themselves the form of a promise, settled by the content handled and by the time your side can give the place. Make a figure handed in from outside into the form of the promise and the copy that recruits people ends up asserting, to members, a premise your side has not confirmed.

Seven things get covered. The contents of the procedure being presented. What recurring billing as a format demands. The design question of where the supply source sits. The three conditions under which a place keeps running. The three routes by which a place breaks. The design of an exit where leaving is no disadvantage. And how the fee changes the reason for taking part. To close, a way of adjudicating whether what supports the place is the individual or the place, without looking at the churn rate.

The Shapes Listed Under Membership Business

A membership business is described as the format of providing, through continuous billing, a service usable only by those who have registered. Unlike one-off sales, that revenue is predictable gets raised as the advantage.

A classification of types gets shown. The type where a person attends to you. The type that provides information. The type that lets you use a tool. The type that leases a platform.

A procedure gets lined up. Draw up a business plan. Make the legal preparations. Design the service. Build the system. Produce the content. Prepare to attract people. Go live after a trial run, and follow up afterwards.

Advice on content gets appended. Both quality and continuity are required. The format may be video, audio or text, and narrow it to what you can produce continuously.

Advice on attracting people appears too. At first, being known takes priority. Build trust with something free and prepare a route through to the paid offer.

Every item is accurate as practice. That revenue is predictable is a fact, and the advice to narrow to a format you can keep producing genuinely reduces failures. Inserting a trial run is correct as well.

Underneath the set sits one premise held in common. The reason a member stays is on the side of what keeps being provided. Adopt the premise and even the sequence of the procedure is settled.

This is not to say the offering needs no value. People do not stay in a place with nothing in it. What is in question is what happens where the offering is the only reason.

If the offering is the only reason, then where something better than that offering exists elsewhere, members move there. To keep them from moving, your side has no option but to keep putting things out. For as long as you keep putting things out, the ceiling of the business is the bearer’s output. And output drops for reasons that have nothing to do with your plans. A state in which the ceiling is coupled to the bearer’s condition cannot be called stable.

That putting out value continuously is simply a matter of course is right. What is being distinguished is not whether you put things out but whether the reason for staying is placed there alone. A structure with only one reason stops entirely the moment that one stops. Holding two reasons and increasing the quantity you put out are separate pieces of work.

The more faithfully you follow the procedure, the more the bearer’s output becomes the heart of the business. Being the heart, it cannot be stopped. A state that cannot be stopped runs head-on against the original purpose of becoming independent and getting your own time back. And the collision stays out of sight for exactly as long as the business looks well.

Recurring Billing as a Format Demands That Something Be Put Out Monthly

Monthly billing demands a monthly consideration.

What is demanding it is not the members. It is the format. The fact of a monthly debit automatically produces, on the member’s side, the adjudication that something must have happened this month.

The bearer accordingly puts something out every month. Putting something out even in months when there is nothing, the level of the content drops. Let the dropped months continue and cancellations occur.

Once cancellations occur, the response becomes put out more. The direction of the response having been settled by the format, there is no way round it. The cause of the drop in level is not the quantity put out but the exhaustion of what there was to put out, and the format points only at the quantity side.

Suppose you make a place providing one lecture a month plus answers to questions. In six months the subjects worth handling are covered once through. From the seventh month you handle things that need not be handled. The fee being the same, what reaches members is only the decline in level.

Whether the business is finished at the point the subjects run out is the question that follows. With the offering as the axis, that is so. With the axis elsewhere, it differs. Where the reason a member is still there next month is not what your side puts out but what is happening to them in that place, the place does not end when the subjects run out.

The format also settles the grain of the content. Divide by month and subjects sized to fit a month get chosen. A subject worth six months either gets split into monthly units or stops being chosen. A split subject has no visible thread for somebody who joined partway. The months proceed without it being visible, so the gap widens. Accordingly, what people receive varies by when they joined, and explanation to close that gap arises every month.

In the shape of leasing a tool or providing a platform, having the offering as the axis is the more natural arrangement. Not every instance of this format needs to be a place. What is handled here is only the shape that includes people gathering.

And the billing cycle is designable. Make it monthly and a monthly consideration gets demanded; make it a bounded period and it becomes a promise completed within that period. A cycle is difficult to change afterwards, so it gets settled at the start. Change the cycle while people are already paying and a situation arises in which it has to be explained as a change of terms.

Lengthen the cycle and, with the revenue forecast unchanged, the intervals between payments widen. Your side carries the funds for the widened period. Accordingly, the choice of cycle is a matter of funds in hand as much as a matter of the promise.

Dependence Occurs Only While the Supply Source Stays With the Bearer as an Individual

What the place gives members is two senses.

I can do this and it is all right to do this. At first the bearer supplies both. The bearer shows, the bearer responds, the bearer guarantees.

For as long as that state continues, members are looking at the bearer. If the bearer goes, both stop being supplied. This is what dependence actually consists in, and it has nothing to do with the members’ characters.

Once the place holds together to a degree, however, the supply source moves. It is all right because I belong here. If the people here are doing it, I can too. The two senses come to be supplied by the place itself rather than by the bearer as an individual.

Once it has moved, dependence thins structurally. The bearer is no different before and after the move. What changed is only where the two senses come from. The bearer can be absent a week and the place moves. The fact of its having moved becomes the material for the following week. It thins not through being careful about thinning it but through the concrete design of moving the supply source.

A place where every question comes to your side has its supply source still with the individual. A place where answers emerge between members has moved. The work of moving it is not delaying your own answers but having members’ answers placed somewhere visible.

People pay the fee because they want to ask the bearer: that reads true at first. Even so, a continuing state in which nothing is knowable without asking your side is a disadvantage for members too. In that state, members cannot move on their own judgement. Maintaining a state of being unable to move amounts to withholding what was supposed to be handed over.

Territory where the supply source cannot be moved remains. Where what is wanted is your primary material, or your judgement itself. What can be moved is the material for judgement, not the judgement. Hold on to the material as well and the unmovable territory looks wider than it is.

And moving the supply source has an advantage on your side too. A place tied to an individual is fragile with respect to the bearer’s condition. Once the bearer stops, the place stops with them. Having moved it is also a design for keeping the place going. The demand of ethics and the demand of the business point the same way here.

Move the supply source and the bearer’s presence drops. By the amount it drops, some members find the reason they are paying harder to see. Cancellations occur once during this period. They arise in the course of the transition, so restore the supply and the transition itself halts.

Three Conditions Under Which a Place Keeps Running

On whether people continue an activity, motivation research has an arrangement.

Deci and Ryan’s self-determination theory arranges human motivation as a continuum from the external to the internal (Deci & Ryan, 1985, Intrinsic Motivation and Self-Determination in Human Behavior, Springer). The form holding that the satisfaction of three basic needs — autonomy, competence and relatedness — supports intrinsic motivation was set out in a later paper (Deci & Ryan, 2000, “The ‘What’ and ‘Why’ of Goal Pursuits”, Psychological Inquiry, 11(4)).

Place the attribution accurately. The three needs themselves are not concepts these two produced. What the two did was to bring together, as basic needs common to human beings, three things that had been handled in separate lineages.

Restate the three on the side of the place and they come out as follows. Autonomy is not being compelled from outside; not having to match the air of the place too closely. Competence is the state of still thinking you can do it even when something did not work. Relatedness is not having relations but the sense of mutual support.

The three have a role different from the two certainties, I can do this and it is all right to do this. The certainties settle whether you can begin. The three conditions settle whether it continues. Entrance and persistence: the places where they work differ.

Consider a place where a monthly task is distributed to everyone and submission is required. Competence may rise. Autonomy falls. By the amount it falls, the place moves closer to somewhere you are made to do things.

The concern that nobody moves without compulsion is warranted. Periods of nobody moving do occur. What remains after a period of moving under compulsion differs, though, from what remains after a period of moving on your own. What remains is not the fact of having moved but the record of having been able to move on your own judgement. That record becomes the material for moving next time.

For competence, the manner of handing over carries a condition. Hand over a task that can certainly be done and competence does not rise. It rises where you hand over a task whose outcome is uncertain and treat not managing it as no issue whatsoever. Treat it as an issue and from then on only what can certainly be done gets chosen.

That satisfying the three makes a place continue cannot be said. The three are conditions on the motivation side, and people leave for reasons apart from motivation, such as time and cost.

Prioritise autonomy and the activity level of the place stops being predictable. Your side is not settling who moves when. Receiving fees in an unpredictable state produces unease on your side. That unease is the entrance to bringing measurement into the place.

Three Routes by Which a Place Breaks

The routes by which a place stops functioning divide into at least three.

The first route is the bearer making the place their own. Every judgement passes through your side, and your assessment becomes the assessment of the place. It is the fixed form of the state where the supply source stays with the bearer as an individual.

The second route is the bearer operating the place as a means. The place becomes somewhere for selling something. What gets stripped first here is the participants’ autonomy. To make something a means is to subordinate the other party’s purpose to your own.

Autonomy falling, motivation falls as self-determination theory has it. Motivation falling, the place itself stops. This is accordingly not something you must not do but something that stops when you do it.

The third route is bringing measurement in. This occurs without ill intent. The absence of ill intent is what separates this route from the other two.

Suppose you raise the frequency of announcements to members. The contents are useful and nothing is being pushed. Even so, on the participants’ side the adjudication this is a place where things get recommended to me moves. Once it has moved, everything your side says gets read within that frame.

That selling is a premise, this being a business, is a fair point. What is at issue is sequence. The place existing first and business advantages emerging from it is natural. Make the place for the sake of the business advantage, conversely, and participants read that sequence. Read, the second route begins.

Of the three, only the first two are detectable from outside. Appropriation is observable as the concentration of judgement. Instrumentalisation is observable as the frequency of announcements. The third goes unobserved because nobody is doing anything.

The three also differ in the shape of the breakage. The first is the shape where the bearer sits at the centre and the place stops turning. The second is the shape where the place becomes subordinate to another purpose and participants revert to recipients. The third is the shape where nobody does anything and the sequence alone changes the nature of the place. Different shapes mean different moments of noticing. The responses are accordingly separate too. The first answers to moving the supply source, the second to declaring the sequence, the third to the staging of judgement. Mistake one response for another and the other route advances instead.

After learning the three, a period arrives of hesitating to make announcements at all. Hesitating, participants leave without knowing what is on offer. The demarcation is in the sequence rather than the frequency, so where the sequence is right, announcements may be made. Not making them is unkindness in another form.

Only the Third Route by Which a Place Breaks Occurs Without Ill Intent

Place a figure first and the nature of the place changes.

The mechanism is in the sequence in which judgement occurs. When planning something, being asked first about the prospect of recovery, the maker understands so the instruction is to work inside this frame. After understanding it, only proposals that fit inside that frame emerge.

It is not that proposals colliding with the frame get rejected. Proposals that might collide stop being generated at all. No record of rejection remains, so what was lost is visible to nobody.

This route requires no intent from the bearer. The sequence alone — a figure placed at the front — turns the place into a means. Admonishing yourself about the first two accordingly does not prevent the third. What prevents it is only sequence.

Suppose you make a habit of looking at the member count every month. The figure is accurate and looking at it is itself correct. Think about a plan after looking and the plans that come to mind first are those likely to raise registrations. Plans that are necessary and will not raise it disappear before they come to mind.

Whether a business holds together without looking at the member count: it does not. A frame is required in the end. What can be said is only the sequence: do not place the frame at the stage of producing proposals. Once proposals are out, apply the frame at the stage of making them real. In that sequence the frame becomes material for judgement rather than a constraint on generation.

The sequence is keepable only where you are deciding alone. Where you run it with others, talk of figures gets placed at the start as a shared premise. In that case the time for producing proposals gets physically separated from the talk of figures.

And this mechanism is not confined to places. That the same thing occurs on the design side is the reverse face of settling judgements in advance, handled in systemising a solo business.

What makes this route the hardest of the three to find is that no awareness remains on the bearer’s side. Appropriation and instrumentalisation are both recognisable in retrospect as that is what I was doing. Proposals that were never generated do not remain even in memory. Not remaining, they cannot be counted afterwards either. What can detect it is only looking at the array of proposals immediately after producing them. If the array all points one way, what settled that direction sits at the front. The array says more than the proposals do.

Place the figure behind and judgement gets slower. Proposals come first and the frame after, so time gets spent on proposals that will not pass. The time spent looks wasted. It only looks it: without that time, all that remains to hand are proposals from inside the frame.

Designing the Exit — a Shape Where Leaving Is Not a Disadvantage

In a membership, the act of leaving can be designed to carry a cost.

The forms of cost are many. The procedure is cumbersome. Rejoining is impossible. What you accumulated becomes unviewable. The fact of having left is visible to other members.

Every one of them lowers the churn figure. The figure falling, it looks like a successful measure.

What has fallen, however, is the number of cancellations, not the wish to leave. Somebody staying while wishing to leave does not take part. Not taking part, from the side of the place they are already absent. Only the fee remains.

And the presence of people who are staying changes the air of the place. In a place with a certain number of people not moving, moving stands out. People who avoid standing out appear, and the activity level falls further.

Suppose you make it an annual contract with no mid-term cancellation. Somebody who judges at three months that it does not fit spends the remaining nine months without taking part. Through those nine months, your side looks at the member count and adjudicates that the place is stable.

Whether a business stays stable if people can leave immediately: it does not. In exchange, the figure agrees with the substance. Where they agree, you can look for the reason when it falls. A figure that does not agree does not fall, so the occasion to look never arrives.

Bounding the period is not in itself a problem. Where you are promising content completed within that period, setting the period is the form of the promise. What becomes a problem is only where the period is set in order to hold people.

The discrimination comes from the reason the length was settled. Settled from the content, it is a promise; settled from the churn rate, it is holding people. The reason is knowable to whoever settled it. Being knowable, this discrimination requires no external standard.

Designing the exit includes how what follows leaving is handled. Whether what was accumulated while enrolled can be taken away afterwards. In a design where it cannot, leaving means losing the past, and somebody staying because they do not want to lose it becomes somebody staying while wishing to leave. In a design where it can, somebody who left uses that content outside, and the name of the place comes up where they use it. On the side that removed the holding, another route remains.

Make leaving easy and the number who actually leave rises. Among the increase are relationships that would have held together had they continued. Removing friction also means ending what was continuing because of the friction. Which of the two you take is settled by what you want to gather in that place.

The Fee Changes the Reason for Taking Part

In the same place, participants behave differently free and paid.

Make it paid and taking part becomes something the participant chose on their own judgement. Having chosen, the reason for choosing stays inside them. Somebody holding a reason moves.

At the same time, being paid produces expectation. The expectation that there must be something to match what was paid. The expectation points at your side. By the amount it points, the supply source stays with the individual more easily.

The two effects point opposite ways. The choosing side raises autonomy; the expecting side strengthens dependence. Which comes out stronger is settled by what the fee is explained as consideration for.

Explain it as consideration for the offering and expectation points at the offering. Explain it as consideration for being in the place and expectation points at the place. And the explanation is already settled in the copy that recruits people.

Compare a place that wrote three lectures a month are available to you with one that wrote this is where people trying the same thing gather. In the former, dissatisfaction appears if the number of lectures drops. In the latter, the place holds together even in a month with no lectures.

Whether the latter wording leaves it unclear what you are buying: it does become less clear. Being less clear, fewer people enter. In exchange, whoever entered came for the place. The explanation at the entrance exchanges the number gathered for the nature of who gathers.

An explanation aimed at the place holds only where the place already exists. Give this explanation at a stage where nobody is there and you are selling something with no substance. At the launch stage there is no option but to place the offering as the consideration.

Accordingly, the explanation gets rewritten partway. At the point the place holds together, change the recruiting copy. Leave it and expectation directed at the offering keeps entering however many years pass.

The level of the amount also tells on the reason for taking part. Higher and the sense of having chosen strengthens, while expectation rises proportionally. Raised expectation points at your side. Lower and expectation falls, and the sense of having chosen falls too. Accordingly the amount gets settled not as what people can pay but as an amount at which they feel they chose it and which does not fix the supply source on the individual. In practice it cannot be settled outright, so it gets watched while being moved.

Rewrite the explanation and the promise to existing members changes too. Proceed with the change silently and it gets received as the offering having been reduced. The rewrite gets done after telling people in advance that it is changing.

Whether What Supports It Is the Individual, or the Place

What supports the place right now is knowable from three records, without looking at the churn rate. Looking is unnecessary because the position of what supports it shows up on the side of the daily exchanges.

The first confirmation is to count what proportion of the exchanges in the place over the past month your side was not involved in.

If the proportion is low, the supply source is still with the individual. There is no correct proportion; what gets looked at is whether it rises over time. If it does not, either your side is answering too much or there is nowhere for members to be visible to each other.

The second confirmation is to note down the first plan that comes to mind when you think about the next thing to do.

If the plans you noted all have a shape that touches member count or revenue, a figure is at the front. Its being there is not itself bad; it is information that the sequence is reversed. Sequence is changeable from the next plan onwards.

The third confirmation is to see whether somebody who left had taken part in the month before leaving.

If they left without taking part, they had been gone before they left. The longer the gap between going and leaving, the more the design makes leaving costly. The gap is measurable from the record.

Member count goes unconsulted in all three. It is a result, and it sits on a different axis from the presence of dependence.

A question the three do not answer remains. Whether that membership should be continued. Even in a place with no dependence, a right sequence and easy leaving, it can fail to hold together as a business. This adjudication cannot be produced on the design side.

Where the reason for staying gets placed, the format settles on the side of the content for you. A monthly debit produces the adjudication that something must have happened this month. Follow the format and only one placement comes out.

And a structure with a single placement stops entirely at the point the bearer stops. The three checks that do not look at the churn rate measure whether the placement has moved. If it has, your side can be absent a week and the place moves. The week it moved becomes the reason for the following week. When the reason stands somewhere out of your hands, the fee becomes, for the first time, consideration for something other than your own output.

What the place itself — the destination the supply source moves to — actually supplies is treated in the two certainties place-building supplies. The order for sharing the work of moving it with others is in the order of team building, and what is required of the side doing the moving in leader qualities do not exist. Whether the placement has left the bearer looks at the same spot the question of dependency looks at. The analysis that dependency is settled by where the source sits, not by attitude, is set out in where dependency sits.