The Productivity Paradox and Strategies for Building Successful Subscription Businesses


Hatched by Glasp

Sep 21, 2023

3 min read


The Productivity Paradox and Strategies for Building Successful Subscription Businesses


Productivity has become a pressing concern in our society today, with data suggesting a decline in productivity growth. This article explores the implications of this productivity crisis and its potential consequences for various aspects of our lives. Additionally, it delves into the strategies that can be employed to build successful consumer subscription businesses. By examining these two seemingly unrelated topics, we can uncover common themes and insights that shed light on the future of our society and careers.

The Productivity Paradox:

The productivity paradox refers to the puzzling phenomenon where increased productivity does not necessarily lead to fewer work hours for employees. Despite advancements in technology and automation, workers still feel pressured to work harder, resulting in a lack of redistribution of gains from increased productivity. This has sparked debates about the role of productivity culture and its impact on workers. It is argued that productivity culture often serves as a tool for maximizing output from workers, rather than ensuring their well-being and fair compensation.

Furthermore, the impact of the technological revolution, particularly the shift to Internet-connected computers, has not had as significant an effect on productivity as expected. The gains from this revolution have primarily been concentrated in the domains of information, communication, and entertainment. In contrast, the revolutions of the 20th century, such as the advent of electricity and the combustion engine, had a broader impact on living standards. Understanding these historical shifts in productivity is crucial in predicting the potential impact of future advancements, such as artificial intelligence.

Building Successful Subscription Businesses:

Creating and sustaining a successful consumer subscription business requires careful consideration of various factors. One key insight is the importance of network effects. Single-product solutions often struggle to maintain long-term retention without the benefits of network effects. Therefore, launching new products that complement existing offerings can help increase retention rates, monetization, and customer acquisition simultaneously. The example of Calm expanding its Sleep Stories product to tap into a larger market demonstrates the effectiveness of this strategy.

Another strategy is to explore new customer segments through product diversification. Spotify's playlist sharing feature enabled the company to expand its user base and enhance customer retention. Additionally, bundling subscription models, as seen with Spotify and Hulu, can attract new audiences and improve retention for both products. Furthermore, venturing into the business-to-business (B2B) market allows subscription businesses to target larger customer bases and benefit from a different acquisition loop.


In conclusion, the productivity paradox poses significant challenges for our society and careers. If productivity growth continues to stagnate, it could have far-reaching consequences, including economic instability, environmental catastrophes, and a decline in innovation. However, by understanding the underlying factors contributing to this paradox, we can take proactive steps to address it.

Similarly, building successful consumer subscription businesses requires a deep understanding of customer needs, market dynamics, and strategic decision-making. By leveraging network effects, diversifying products, and exploring B2B opportunities, subscription businesses can position themselves for long-term success.

Actionable Advice:

  • 1. Foster an improvement mindset by dedicating five hours a week to deliberate learning, reflection, and experimentation. This practice can help individuals and businesses stay ahead of the curve and adapt to changing circumstances.
  • 2. Consider the potential of network effects when developing subscription-based products. Building a network of engaged users can enhance retention rates and improve overall business performance.
  • 3. Embrace product diversification to tap into new customer segments and increase monetization rates. By expanding the range of offerings, businesses can attract a wider audience and boost revenue potential.

Ultimately, addressing the productivity crisis and building successful subscription businesses require a holistic approach that prioritizes the well-being of individuals, fairness in compensation, and adaptability in the face of technological advancements. By doing so, we can navigate the challenges ahead and create a more productive, inclusive, and fulfilling future.

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