Column It takes a lot to stir the peaceable men and women of Makerhood into angry revolt, but 2D robo-snippers Cricut did it last week. Cricut makes desktop thingies that can print, cut and score a variety of flexible materials, which produce 2D templates you then glue, sew or otherwise fashion into 3D things like baseball caps for Etsy.
Cricut's card-chompers cost more than a pair of scissors and a tape measure - expect to part with £350 or so. And they’re useless without the software, which Cricut maintains in the cloud. It’s a popular approach in 3D printing because it works well; users don’t have to worry about the spec of their local computers and Cricut can add and debug new features without pushing out regular huge updates. And, of course, it knows exactly what its users are doing.
Cricut is doing well out of it. So well, it decided it was time for an IPO. Which meant sprucing up the revenue stream - and what better way than to add a subscription model to use that cloud software?
And so, with one eye on the corporate spreadsheet and the other on Wall Street, the company announced that henceforth, its users would have to pay around £100 a year if they wanted to print more than 20 things a month, as opposed to no pounds a year for as many as they wanted.
You could hear the screams from Haight Ashbury to Hebden Bridge. It turns out that hobbyists and one-person tweeshops considered £350 as buying unlimited right to use, especially as that was the deal. Being held to ransom was not.
Cricut rapidly realised that with both eyes on the cashflow it had none left for the ball. In a staggered climbdown, the company first offered to continue the old model for existing customers and then, as people asked awkward questions about upgrades and resale, caved completely and would now like everyone to forget this ever happened.
Which sounds good news for its customers - but is it? Contrary to popular belief, most companies, especially small outfits, aren’t in it to gouge the punters. Making enough scratch to keep going is priority number one, with earning enough to fund competitive development and growth not far behind. The old Cricut model, which did have a premium service (but with a free tier that was fine for most users), has a basic flaw baked in, and that’s the cloud.
If you build a cloud service, you will rapidly discover that the cloud infrastructure providers do not do freemium. You want cloud, you pay dollar. When a third party does offer freemium, then the free bits still have to be paid for - and if they’re good enough to create healthy user growth, that cost will rise. And some users - not many, but enough - will really hammer the service. Doubtless, that £350 hardware cost factored in so many years of average use, but if that’s wrong Cricut ends up bleeding money into the cloud with no more coming in from the user.
But as Cricut has found out, you can’t just slap on a monthly invoice. You made promises. You’ve taken the money. You have to keep going. And if Cricut can’t, then all those lovely machines will stop working, which won’t exactly be Victory in Userland Day.
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There’s nothing wrong with having considerable running expenses for an expensive investment. If you buy an aircraft, you don't get to use it how you like for as long as you like if you don’t keep it serviced to regulation standards. That’s what owning an aircraft means. You don’t get to buy a mobile phone that’s free to use forever. The trouble with Cricut is that it looks like the business model it started out with won’t fly forever - but you wouldn’t know it if you hadn’t seen other services such as Docker go through the same mangle.
We can assume Cricut wasn’t a carefully engineered long-term scam from the outset - and frankly, if it was, it was truly inept at it; the evidence is it makes pretty good cutters and that’s what it wants to carry on doing.
It has three problems. It’s a company which claims to be, and by its nature is, a community-based enterprise that forgot its community has expectations and saw them as Excel entries instead. That has to change. It’s a company with an apparently broken business model: that has to change too. And it’s trapped in the cloud.
It will be possible to raise revenues from increased subscriptions if they seem like good value, and users don’t feel like they’re being held up at gunpoint. Keep an "unlimited" free option but make it clear that users will have to accept slower job processing or restrictions at peak times. Encourage third parties to provide alternative servers - and make sure you always have a better offer. Find extra sweeteners for subscribers - discounts on materials, added features - that are better for your revenue than unlimited cloud outpourings. And you know what your users are doing in infinite detail, that’s a huge advantage for any company. Be fair, but be smart: use those insights. c
As for us, the users who are tempted into buying cloud-powered hardware, then we have to ask ourselves not only is this a good quality product at a fair price, but is it sustainable, or is it too good to be true?
It’s a fair point that if Cricut itself couldn’t answer that question then how can Michael Moongazer, who just wants to make 3D greeting cards of Stonehenge? End users have been taught to think of the cloud as free because people like Google don’t seem to charge for their services - but we know that’s not true, don’t we.
What I’d like to see, and what would make life better for both vendors and Michael, would be a little part of each company's website where the business model is explained. It seems quite shocking at first, as if that is the top trade secret of any organisation, but it really isn’t. It would be a solid recognition that the business is serious about having a long-term relationship with its customers, and that they can be serious in making that decision for themselves. ®