Once.com, liquidation preferences, and open source to full-time income

Executive overview

37signals launched Once.com — one-time purchase, self-hosted software — as a contrarian bet against SaaS subscriptions. The hosts argue the model rebuilds all the problems SaaS solved: support chaos, no recurring revenue, and 100% monthly churn by design.

Two other stories round out the episode: how FanDuel's founders walked away with nothing from a $465M exit due to liquidation preferences, and how an open source developer reached full-time income by enforcing payment rather than relying on donations.

The real lesson across all three stories: pricing and terms matter far more than most founders realise until it's too late.

Once.com and the one-time software debate

• 37signals' Campfire sells for $299 once — no subscription, self-hosted via Docker.
• Free updates limited to 1.x; support described as "bare bones."
• Rob ran .NET Invoice (self-hosted) and recalls hours lost troubleshooting misconfigured customer servers for a $300 one-time fee.
• Self-hosted models shift support burden to the seller regardless of whose fault the problem is.
• Building a one-time model is designing in 100% monthly churn — you start from zero revenue every month.
• Reported first-week sales: ~800 copies (~$250K) — described as a rounding error for 37signals.
• The contrarian pricing fits 37signals' marketing style; it's not a template for average indie founders.
• Product works only for small, technically sophisticated teams — a narrow audience with free alternatives (Slack free, Discord).

FanDuel: selling for $465M and getting nothing

• FanDuel was acquired for $465M; founders and most employees received nothing due to liquidation preferences.
• A liquidation preference guarantees investors get a multiple of their investment back before founders see anything.
  • 1X non-participating: investor chooses between their preference or their pro-rata equity share.
  • Participating: investor gets their multiple and participates pro-rata — founders get squeezed from both sides.
• FanDuel's Series E was ~$275M with a 2X liquidation preference; at sale price, nothing was left for founders.
• Founders who had already left the company were the ones who received nothing; a management carve-out likely protected those still employed.
• Einar's view: founders who signed a 2X preference and then left almost certainly took money off the table at the Series E — the "got nothing" headline likely omits that earlier payout.
• Tracy's experience: raised from an accelerator with a 2–3X preference, didn't fully understand the terms, and was unable to sell the company for even a small amount when winding down — had to shut it instead.
• Liquidation preferences exist for legitimate reasons: a 1X non-participating preference protects investors from founders selling cheaply and diluting them out.
• Key takeaway: founders focus on headline valuation and ignore terms — those terms can block future fundraising, acquisitions, or even a small exit.
• Book recommendation: Venture Deals by Brad Feld — read it before, not after, taking investment.

Open source to full-time income: Email Engine

• Developer built Email Engine under AGPL licence; MIT licence available for €250/year.
• After 18 months, total revenue: €750.
• The shift: adding a licence check that kills the app 15 minutes after install without a valid licence — converting a donation model into a paywall.
• MRR reached €6,100, enough for a full-time salary in Estonia.
• Tracy's read: the licence type wasn't the key variable — the founder moved from "build it and they will come" to active pricing and sales behaviour.
• Einar's read: still vastly underpriced; the progression (€250 → €4.95/mo → €6.95 → €7.95 → €8.95) suggests there's headroom to 10x.

Book recommendations

• Venture Deals — Brad Feld: essential before taking any outside investment.
• Never Split the Difference — Chris Voss: reframes negotiation as empathy-driven rather than adversarial.
• The Art of Learning — Josh Waitzkin: chess prodigy turned martial arts champion on deliberate learning and high performance.
• The Beginning of Infinity — David Deutsch: philosophical antidote to negativity bias; no direct SaaS takeaways but shifts how you think about progress.
• Fiction bonus: The Anomaly — Hervé Le Tellier; go in blind, push through the first five chapters.

Lightning round: controversial startup takes

• Most devs get a better financial deal staying in big tech — financially, probably true for the median developer; startups offer freedom and upside, not a guaranteed better outcome.
• Product-led growth is where founders too scared to do sales go to hide — the highest-value SaaS businesses require something close to consultative sales; PLG is not a substitute.
• Building a startup is not actually that hard — both guests disagree; the mental load, especially once you have employees, makes it genuinely hard even if it looks manageable in hindsight.
• Startups are a trap; lifestyle businesses are way better — false binary; optimise for what you want. Lifestyle businesses generate income; exits from startups compress years of earnings into a single taxable event at capital gains rates.