Subscribed: Unveiling The Entrepreneurial Journey Of Subscription-based Ventures

A business model that has exploded in popularity over the last decade has been the subscription model. Within the world of entrepreneurship, these subscription-based businesses have appeared to become more common as of late, but what exactly is involved in running a subscription-based business, why is it generating so much interest and how does Close School help prepare future entrepreneurs to use this model?

How do subscription-based models work?

Subscription-based businesses come in many shapes and sizes, but usually have customers to pay a monthly or annual fee to receive a good or service. Subscription-based businesses have been around for a long time, but they really saw an explosion in popularity following the rise of on-demand video and streaming services.

Nowadays, some of these businesses have elevated themselves to become some of the most recognizable brands in the world. You of course have companies like Netflix and other streaming services leading the charge, but monthly boxes that provide handpicked goodies directly to your home have become key players in the world of subscription-based businesses.

What makes this model so effective?

HelloFresh, a company that offers high-quality weekly meal kits directly to your door, have utilized this subscription-based model to incredible success, becoming America’s #1 meal kit. Due to the flexibility subscription models provide, HelloFresh was able to easily break into the market for pet food, too, just by offering additional menu options for customers already using their service. The subscription-based model allowed them to cleanly roll out a new service to their established market, as compared to introducing an entirely new service. 

Subscription-based businesses are convenient for both customers and businesses, and this convenience is what has entrepreneurs so eager to build their startups around this innovative model. Let’s take a look at three Close School alumni using subscription services to elevate their businesses towards incredible success!

Close School Success Stories

  • KitNipBox, founded by Drexel alumna Olga Yurovski, delivers monthly boxes of high-quality cat toys, treats, and accessories to cat owners across the US and Canada. By catering to the specific needs and preferences of cat lovers, KitNipBox has built a loyal and passionate customer base and has been featured in Forbes, BuzzFeed, and The New York Times. 
  • Tern Water is a subscription service for smart water filters founded by Drexel alumnus Mohamed Zerban. Tern Water provides customers with a smart faucet that tracks water quality, consumption, and savings, automatically delivering replacement filters when needed. By combining technology, sustainability and convenience, Tern Water has won awards and competitions. Through their success, Tern Water has also been featured in TechCrunch, Fast Company, and The Philadelphia Inquirer.
  • The Flex Company, a subscription service co-founded by Drexel alumna Lauren Schulte Wang, provides women innovative menstrual products. The Flex Company offers innovative and eco-friendly alternatives to tampons and pads, such as the Flex Disc and the Flex Cup. By providing customers with convenience, comfort and choice, The Flex Company has grown to serve over 300,000 subscribers and has raised over $20 million in funding.

The Close School proudly fosters a supportive environment where students and alumni are equipped with the tools to build their businesses. We have undergraduate and graduate programs in entrepreneurship and innovation, but also graduate certificates or minors in a variety of fields to help entrepreneurs. Through dynamic programs and hands-on experiences, students are granted the flexibility to explore various business models, including subscription services, to help them lay a foundation for their own successful ventures.

Challenges and Solutions

Battling Customer Churn

Addressing customer churn is crucial for the sustainability of subscription-based businesses. Customer churn is the rate at which subscribers cancel their subscriptions, it can be caused by various factors, including perceived lack of value, poor customer service, or changes in personal circumstances. Entrepreneurs armed with retention strategies, such as personalized experiences and loyalty programs, can keep their subscribers smitten and their businesses thriving.

The Perfect Balanced Pricing

Setting the right price can feel like walking a tightrope between profit and popularity. This involves diving deep into the market to gauge what competitors are charging and what customers are expecting. By making sure their prices are competitive yet profitable, entrepreneurs can draw in and keep customers interested. So, with a dash of creativity, entrepreneurs can find that sweet spot where affordability meets profitability, ensuring happy customers and healthy bottom lines.

Beyond Boundaries: The Next Chapter of Subscription Innovation

Looking ahead, one thing is clear: the future of subscription-based business is brimming with possibilities. From personalized experiences to sustainable solutions, entrepreneurs are innovating and ushering in a new era of customer-centric business models.

Subscription-based business models offer a unique blend of creativity and potential. By embracing the power of this innovative way of providing for customers, aspiring entrepreneurs can change the world – one subscription at a time!

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