Hardware alone doesn’t build enterprise value. And layering a subscription on top of hardware only works if the product becomes part of daily life.

In this episode of Sub Club, Skylight’s CEO and CPO share how they built a profitable hardware business with strong subscription attach — and the hard lessons they learned about daily usage, emotional pricing, product readiness, and retail distribution.

Here are five takeaways for anyone building a hardware-enabled subscription business.

Hardware-enabled subscriptions need daily usage to work

A hardware device can justify a subscription — but only if it’s used daily.

If a device sits idle, recurring revenue quickly feels optional. Customers start questioning what they’re paying for. But when a product becomes embedded in daily routines — organizing schedules, surfacing tasks, anchoring family communication — the subscription feels like a natural extension of its value.

Daily attention creates subscription leverage.

For Skylight, the turning point came when the Calendar product became the “heartbeat of the home.” Once families relied on it every day, the subscription became less about upselling features and more about unlocking deeper utility.

Without habitual usage, subscriptions struggle. With it, they compound.

Stop optimizing when you should be building

A/B testing and funnel optimization can drive incremental gains. But sometimes the biggest growth lever isn’t conversion — it’s product.

With limited resources, Skylight had to prioritize carefully. Instead of spreading effort across endless micro-experiments, they focused on building genuinely valuable features that strengthened the overall experience.

Optimization matters. But step-function growth often comes from shipping something that makes the product meaningfully better.

When resources are constrained, prioritization becomes strategy.

Price based on customer emotion, not just data

When Skylight revisited its subscription pricing, testing showed $99/year would maximize revenue.

On paper, it was the ARPU winner.

But qualitative research told a different story. While $79 felt fair, $99 approached what the team described as “disgust territory.” That emotional reaction mattered.

For a company focused on long-term brand equity, short-term revenue optimization wasn’t worth risking customer resentment. They chose $79 — prioritizing goodwill and trust over squeezing every dollar.

Pricing isn’t just math. It’s emotional positioning.

The spreadsheet can tell you what maximizes revenue. Only customer conversations tell you what preserves loyalty.

Build a great product before scaling marketing

Marketing can’t fix a weak product.

In 2021–22, Skylight tried to scale its Calendar product aggressively. Paid acquisition ramped up. Growth stalled. The numbers didn’t work.

The problem wasn’t the ads — it was the product.

Until the team pushed the experience to a 40+ Net Promoter Score, marketing dollars produced false negatives and wasted spend. Once the product truly resonated, scaling became viable.

If product-market fit isn’t solid, scaling marketing only amplifies friction.

Get the product right first. Then turn on growth.

Retail partnerships are the ultimate influencer

In hardware, distribution is influence.

Retail partnerships with companies like Costco and Best Buy provide a stamp of quality that paid ads can’t replicate. Being on trusted shelves signals credibility to customers at scale.

While direct-to-consumer channels often drive higher subscription attach rates, multi-channel distribution expands reach and strengthens brand legitimacy.

Hardware can be copied. Distribution is harder to replicate.

For Skylight, retail wasn’t just a sales channel — it was a growth engine and a positioning advantage.

Balancing growth, profit, and long-term trust

Across all five lessons, a deeper theme emerges: growth and profit often pull in different directions.

  • Making subscriptions frictionless can reduce margin.
  • Raising prices can increase ARPU but hurt long-term trust.
  • Cutting hardware prices could accelerate growth but compress profitability.
  • Over-optimizing can distract from building durable value.

Every decision involves trade-offs.

Skylight’s approach shows that scaling a hardware-enabled subscription business isn’t about maximizing every metric at once. It’s about choosing which levers matter most — and when.

Hardware-enabled subscriptions aren’t about layering recurring revenue onto a device. They’re about earning daily relevance, pricing with emotional intelligence, and building a product strong enough to deserve scale.

🎧 Listen to the full episode of Sub Club to hear the complete conversation and the experiments behind these lessons.