Top 10 Recurring Revenue Business Models To Build a Profitable Business in 2025

Discover 10 powerful recurring revenue business models. Learn how to implement subscriptions, memberships, and more to build predictable income.

Top 10 Recurring Revenue Business Models To Build a Profitable Business in 2025
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recurring-revenue-business-models
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Discover 10 powerful recurring revenue business models. Learn how to implement subscriptions, memberships, and more to build predictable income.
In the pursuit of sustainable growth, few strategies are as powerful as building a predictable stream of income. The one-off sale is a constant hustle, a perpetual cycle of chasing new customers. In contrast, recurring revenue business models transform your business from a transactional machine into a long-term, value-generating asset. This approach creates a stable financial foundation, allowing you to focus on innovation and customer relationships rather than just the next acquisition.
The core advantage is financial predictability. Knowing your baseline monthly recurring revenue (MRR) or annual recurring revenue (ARR) empowers you to make smarter decisions about hiring, marketing spend, and product development. It smooths out cash flow, eliminating the jarring peaks and valleys that plague many project-based businesses. Furthermore, this model inherently deepens customer loyalty. When a customer commits to a subscription or membership, they are investing in an ongoing relationship, which significantly increases their lifetime value (LTV).
This comprehensive guide breaks down ten distinct recurring revenue business models, moving beyond simple definitions to provide actionable implementation frameworks. For each model, you will find:
  • A clear definition and its core mechanics.
  • Actionable pros and cons to help you evaluate its fit.
  • Real-world examples from successful companies.
  • Specific implementation steps, including how to set up membership flows with platforms like Sotion.
  • Key metrics you absolutely must track for success.
Whether you're a startup founder, a course creator, or a digital agency, this listicle is designed to be your blueprint for building a resilient, scalable, and profitable business. Let’s explore the models that can become the bedrock of your success.

1. Membership/Subscription Model: The Gold Standard of Recurring Revenue

The membership or subscription model is arguably the most recognized of all recurring revenue business models. At its core, it involves customers paying a regular fee, typically monthly or annually, in exchange for ongoing access to a product, service, or exclusive community. This transforms the customer relationship from a one-time transaction into a long-term partnership, creating a highly predictable and stable income stream.
This model thrives on delivering continuous value. Think of Netflix for entertainment, Adobe Creative Cloud for software, or a local gym for services. The key is that the offering isn't a single purchase but an evolving experience that keeps subscribers engaged and willing to continue their payments.

Implementation and Key Considerations

  • Pricing Tiers: Structure your offering into multiple tiers (e.g., Basic, Pro, Enterprise) to cater to different customer segments. This maximizes your addressable market and creates clear upsell paths.
  • Value Proposition: Clearly define what subscribers get for their recurring payment. Is it access to exclusive content, new features, a supportive community, or ongoing support? The value must justify the cost month after month.
  • Onboarding and Retention: A smooth onboarding process is crucial to help new members immediately see the value. Focus on retention strategies like community engagement, exclusive updates, and loyalty rewards to reduce churn.
For creators and solopreneurs, tools like Notion have made this model incredibly accessible. You can use a platform like Sotion to instantly place your valuable Notion content, such as a course or a curated database, behind a secure, branded paywall. With integrations for Stripe, Lemon Squeezy, or Gumroad, you can launch a subscription-based product in minutes, not weeks.
For a deeper understanding and inspiration on successful implementations, explore top subscription business model examples. Analyzing how others have structured their offerings can provide invaluable insights for your own venture.

2. Freemium Model: The Ultimate Customer Acquisition Engine

The freemium model is a powerful, dual-tier approach that functions as both a product and a marketing funnel. It provides a core version of a product or service for free to a large user base, with the strategic goal of converting a percentage of those users into paying customers for a premium, more feature-rich version. This strategy effectively eliminates the initial barrier to entry, allowing potential customers to experience the product's value firsthand before committing financially.
This model is one of the most effective recurring revenue business models for achieving rapid user adoption and building a massive top-of-funnel audience. Companies like Slack, Dropbox, and HubSpot have masterfully used a free tier to demonstrate their value, making the upgrade to a paid plan a natural next step for users who need more capacity or advanced functionality. The free product acts as the best possible advertisement for the premium one.
notion image

Implementation and Key Considerations

  • Value-Driven Free Tier: Design your free offering to be genuinely useful and showcase your product's best features, not its limitations. The goal is to make users successful so they eventually outgrow the free plan, not to frustrate them into upgrading.
  • Strategic Upgrade Triggers: Implement clear, usage-based limits that naturally prompt an upgrade. Common triggers include storage space (Dropbox), feature access (Notion's advanced blocks), or message history (Slack). Position the upgrade as an expansion of capabilities, not a restriction.
  • Conversion Funnel Optimization: Your most critical metric is the free-to-paid conversion rate. Capture emails from all free users to nurture them with content that highlights premium benefits. Offer limited-time trials of the premium version to let them experience the full value and reduce upgrade friction.
For creators, this model is highly effective for building an audience. You can offer a free resource or newsletter built in Notion, and as your community grows, use a tool like Sotion to launch a premium, members-only section. This allows you to build trust and demonstrate value with a free offering before introducing a paid subscription, creating a seamless path to monetization.

3. Tiered Pricing/Multi-Tier Membership: Maximizing Customer Value

The tiered pricing model is a sophisticated evolution of the standard subscription, segmenting the offering into multiple levels with distinct features and price points. Instead of a one-size-fits-all approach, this model caters to diverse customer needs and budgets, creating a clear pathway for growth. It allows you to capture a wider audience, from entry-level users to power users or enterprises, maximizing your total addressable market.
This model is built on the principle of value-based segmentation. Think of Patreon, where creators offer Bronze, Silver, and Gold tiers with increasing levels of access and perks, or Notion’s own plan structure (Plus, Pro, Team). The goal is to let customers self-select the plan that best fits their requirements, making it one of the most effective recurring revenue business models for scaling a company.

Implementation and Key Considerations

  • Structure with 'Good-Better-Best': For clarity, limit tiers to three or four options. Position the middle tier as the most attractive or recommended option to anchor customer choice and guide them toward your preferred plan.
  • Define Value Metrics: Clearly differentiate each tier. This could be based on usage limits (e.g., number of projects), feature access (e.g., advanced analytics), or service level (e.g., priority support). Ensure the value jump between tiers justifies the price increase.
  • Strategic Upselling: Design your tiers to encourage upgrades. As a customer's needs grow, the next tier up should be the logical and desirable solution. Offer incentives like a 15-25% discount on annual plans for higher tiers to lock in long-term commitment.
For creators using Notion to house their content, a tool like Sotion makes implementing this model straightforward. You can create different access levels for your Notion pages, effectively building a multi-tier membership site. This allows you to offer a basic-tier newsletter, a mid-tier course, and a premium-tier coaching package, all managed from a single, branded platform.
To fine-tune your approach, you'll need to develop a solid strategy. Dive deeper into the nuances of this model by exploring various subscription pricing strategies to ensure you structure your tiers for maximum profitability and customer satisfaction.

4. Usage-Based Pricing (Metered Billing)

The usage-based or metered billing model directly ties customer cost to consumption. Instead of paying a flat monthly fee, customers are charged based on how much of a product or service they actually use. This creates a powerful connection between the value a customer receives and the price they pay, making it one of the fairest recurring revenue business models available.
This approach is highly effective for services where consumption can vary dramatically between users. Think of cloud computing services like Amazon Web Services (AWS), communication platforms like Twilio that charge per message, or payment processors like Stripe that take a percentage of transaction volume. The revenue scales directly with customer success and usage, aligning your growth with theirs.
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Implementation and Key Considerations

  • Value Metric Selection: Choose a usage metric that directly correlates with the value your customers receive. This could be API calls, data storage, active members, or tasks executed. The clearer the link between usage and value, the easier your pricing is to understand and justify.
  • Prevent Bill Shock: Unexpectedly high bills are a primary cause of churn in this model. Implement proactive usage alerts at different thresholds (e.g., 50%, 75%, 90% of a budget) and offer optional monthly spending caps to give customers control and predictability.
  • Transparency and Tooling: Provide customers with a clear dashboard to monitor their consumption in real-time. This transparency builds trust and helps them understand their usage patterns, leading to higher satisfaction and retention.
For creators offering access to a gated community or resource database, this model can be implemented by tracking specific actions. For instance, you could use Sotion’s webhooks and Members API to monitor member activity, such as API calls or content access, and bill accordingly. This technical setup forms the backbone of metered billing systems, which you can learn more about by exploring how to set up recurring payments for various models.

5. Marketplace/Commission Model: Powering Transactions as a Platform

The marketplace or commission model is a powerful recurring revenue business model where you facilitate transactions between two distinct groups, buyers and sellers, and earn a percentage fee from each sale. Instead of selling your own product, you provide the platform, trust, and tools that enable commerce, creating a scalable income stream tied directly to the success of your users.
This model's strength lies in its ability to build a network effect. As more sellers join, the platform becomes more valuable to buyers, which in turn attracts even more sellers. Think of platforms like Gumroad, which takes a 10% commission on creator sales, or payment processors like Stripe, which charges a fee (e.g., 2.9% + 30¢) for every transaction it processes. The revenue is recurring because transactions happen continuously.
notion image

Implementation and Key Considerations

  • Fee Structure: Be transparent about your commission from day one. Start with a competitive rate (e.g., 5-10%) to attract early sellers and build momentum. As your platform's value grows, you can consider adjusting rates or introducing volume-based tiers that reward high-performing sellers.
  • Value Proposition for Sellers: Your platform must solve a real problem for sellers. Provide them with tools for marketing, analytics, and customer management that they couldn't easily build themselves. The more value you add, the more justified your commission becomes.
  • Trust and Security: As the facilitator, you are responsible for ensuring secure transactions and building trust between buyers and sellers. Invest heavily in secure payment processing, clear policies, and dispute resolution mechanisms to protect all parties.
For creators looking to build their own ecosystem, this model can be highly effective. A platform like Sotion allows you to create a secure, members-only site from your Notion content. By integrating payment processors like Stripe, Gumroad, or Lemon Squeezy, you can enable other creators to monetize through your platform, taking a small commission for providing the infrastructure and community. This approach positions you as a hub rather than just another creator.

6. License/Perpetual License with Maintenance Fees: The Hybrid Approach

The perpetual license with maintenance fees is a classic hybrid among recurring revenue business models, blending a significant upfront payment with a smaller, ongoing income stream. Customers purchase a one-time, perpetual license to use a product, like enterprise software, indefinitely. The recurring element comes from optional, annual maintenance contracts that provide support, updates, and bug fixes.
This model provides a substantial initial cash injection from the license sale while building a predictable revenue base from maintenance renewals. It was the standard for giants like Microsoft and Adobe before their shift to pure subscription. The core appeal is giving customers ownership of the software version they purchased while incentivizing them to pay for ongoing service and minor improvements.

Implementation and Key Considerations

  • Structure Maintenance Value: To encourage renewals, make the maintenance package highly valuable. It should include priority support, all minor version updates, critical bug fixes, and security patches. This frames it as an essential insurance policy for the software.
  • Pricing the Renewal: A common industry standard is to price the annual maintenance fee at 15-20% of the initial perpetual license cost. This strikes a balance where the recurring fee is a manageable operational expense for the customer, not a major capital expenditure.
  • Incentivize Upgrades: Clearly distinguish between minor updates (covered by maintenance) and major new versions (requiring a new license purchase). Offer a discount on the new version license for customers with an active maintenance plan to reward their loyalty and drive upgrade revenue.
For creators using this model for digital products, such as a comprehensive Notion template or a database, Sotion can manage access to the maintenance portion. You can sell the initial product via a one-time payment and then use Sotion to gate access to an "Updates & Support" page for customers who subscribe to the annual maintenance tier, ensuring only paying members receive the latest documentation and premium support.

7. Sponsorship/Advertising Model: Monetizing Audience Attention

The sponsorship and advertising model flips the script on typical recurring revenue business models. Instead of charging your audience, you generate income by selling access to that audience to other businesses. This involves companies paying you a recurring fee for ad placements, brand sponsorships, or ongoing partnerships, creating a stable revenue stream fueled by audience engagement rather than direct user payments.
This model is ideal for content creators, newsletters, podcasts, and platforms that have built a substantial and dedicated following. Think of popular Substack newsletters with sponsor slots, podcasts with pre-roll ad reads, or YouTube channels with integrated brand deals. The core value proposition is the targeted, loyal audience you can offer to brands, making it a powerful way to monetize content without a paywall.

Implementation and Key Considerations

  • Audience First, Monetization Second: Focus on building a sizable and engaged audience before seeking sponsors. Brands are interested in reach and impact, so having strong metrics is non-negotiable. To quantify your audience's value, particularly on social media, using a tool like an Instagram Engagement Calculator can provide the concrete data that sponsors want to see.
  • Create Sponsorship Tiers: Don't offer a one-size-fits-all solution. Structure your offerings into packages, such as a "Title Sponsor" for a month, a "Weekly Feature" in a newsletter, or a multi-episode podcast mention. This provides clear options and upsell opportunities.
  • Maintain Authenticity and Trust: Only partner with brands that align with your audience's values and interests. A mismatched sponsor can quickly erode trust and damage your reputation. Always be transparent about sponsored content to maintain a healthy relationship with your community.
For creators building an audience from scratch, platforms are key. You can use tools to build a highly qualified email list, creating a valuable asset that becomes incredibly attractive to potential sponsors. This direct line to your audience is a key selling point when negotiating recurring sponsorship deals.

8. Consulting/Service-Based Subscription: The Expert Retainer Model

The consulting or service-based subscription model transforms professional expertise from a one-time project into a continuous, predictable revenue stream. Instead of billing clients per hour or project, consultants, coaches, and agencies charge a recurring fee, typically monthly or quarterly, for ongoing access to their guidance, support, and services. This approach positions the expert as a long-term strategic partner rather than a temporary contractor.
This model is ideal for delivering sustained value that compounds over time. Think of a marketing agency on a monthly retainer, an executive coach providing ongoing leadership development, or a fractional CFO managing a company's financial strategy. The client benefits from consistent, priority access and strategic alignment, while the provider secures a stable income base, making it one of the most powerful recurring revenue business models for service professionals.

Implementation and Key Considerations

  • Define a Clear Scope: To avoid scope creep, explicitly detail what the retainer includes. Specify the number of hours, monthly deliverables, communication channels, and response times. Anything outside this scope can be billed as a separate project-based upsell.
  • Structure Tiered Retainers: Create packages to serve different client needs and budgets (e.g., Starter, Professional, Premium). Base pricing on the value and access provided, such as the number of strategy calls or the depth of reporting.
  • Demonstrate Ongoing Value: Proactively schedule check-ins, deliver reports, and share insights to constantly reinforce the value of the retainer. Clients need to feel the continuous impact of your partnership to justify the recurring expense.
For experts who leverage knowledge bases and strategic documents, this model is easily managed. You can use a platform like Sotion to create a private, branded client portal from your Notion workspace. This allows you to securely share exclusive resources, strategy documents, and progress reports, adding tangible, gated value to your high-ticket retainer packages and enhancing the client experience.

9. Annual Prepayment Model: Accelerating Cash Flow and Commitment

The annual prepayment model is a powerful variation of the subscription model designed to maximize cash flow and customer loyalty. Instead of paying month-to-month, customers commit to and pay for a full year of service upfront, almost always in exchange for a significant discount. This simple tweak transforms a company's financial health by providing a large influx of capital that can be reinvested into growth, marketing, or product development.
This approach is one of the most common recurring revenue business models in the SaaS and service industries. Companies like Notion and Adobe Creative Cloud offer compelling discounts (often 15-25%) to incentivize the annual commitment. The model works because it creates a win-win scenario: the customer gets a better price for a service they plan to use long-term, and the business secures a year of revenue, drastically reducing churn risk and simplifying revenue forecasting.

Implementation and Key Considerations

  • Offer a Compelling Discount: The incentive must be attractive enough to justify the upfront payment. A discount in the 15-20% range compared to the monthly price is a standard and effective starting point.
  • Strategic Presentation: Make the annual plan the default or most prominently featured option on your pricing page. Clearly display the savings ("Save 20%" or "Get 2 Months Free") to anchor the value proposition and encourage the longer commitment.
  • Reduce Buyer Friction: While securing upfront payment is the goal, offering prorated refunds for early cancellations can build trust and reduce hesitation for new customers. Ensure the renewal process is automatic but that cancellation is straightforward to maintain a positive customer experience.
For creators using Notion to sell courses or premium content, this model is easily implemented. When setting up a paywall with a tool like Sotion, you can create both monthly and annual pricing plans through its integration with payment processors like Stripe. This allows you to present the discounted annual option directly on your branded site, capturing more committed, high-value members from day one.

10. Affiliate/Revenue-Share Partnership Model

The affiliate or revenue-share partnership model allows creators, publishers, and businesses to generate recurring income by promoting other companies' products or services. Instead of a one-time commission, this model often involves earning a percentage of the revenue from a referred customer over their entire lifetime, creating a powerful and scalable recurring revenue stream. This turns your audience's trust into a tangible asset.
This model is especially potent for content creators who have built a dedicated following. Think of productivity YouTubers promoting software tools like Zapier or course creators earning commissions from hosting platforms like Bluehost. The core principle is authenticity; you promote products you genuinely believe in, and your partner shares a portion of the resulting long-term revenue. This aligns incentives and fosters a win-win relationship.

Implementation and Key Considerations

  • Authenticity is Key: Only promote products you personally use and trust. Your audience's confidence is your most valuable currency, and breaking it with a poor recommendation can cause irreparable damage. Always disclose your affiliate relationships transparently.
  • Negotiate Favorable Terms: Don't settle for standard, one-off commissions. For SaaS or subscription products, negotiate a recurring revenue-share (e.g., 25-50% of the subscription fee for the customer's lifetime). This transforms a single referral into a lasting income source.
  • Strategic Content Creation: Build dedicated content around your affiliate products. Create in-depth reviews, comparison guides, or tutorials that showcase the product's value. This not only drives traffic but also pre-qualifies potential customers, leading to higher conversion rates.
For creators building a brand with Notion, this model is a natural fit. You can use a platform like Sotion to build a high-authority blog or resource hub filled with valuable content. By creating comparison guides or "best tools for..." lists, you can embed affiliate links for complementary products like Stripe, Zapier, or Gumroad, turning your trusted content into a consistent revenue engine.

10 Recurring Revenue Models Comparison

Model
Implementation Complexity 🔄
Resource Requirements ⚡
Expected Outcomes 📊
Ideal Use Cases 💡
Key Advantages ⭐
Membership/Subscription Model
🔄 Moderate — billing, auth, content gating
⚡ Medium — ongoing content + support
📊 Predictable recurring revenue; steady CLV
💡 Course creators, coaches, community builders
⭐ Reliable cash flow; scalable retention
Freemium Model
🔄 Moderate — tier gating and upgrade flows
⚡ High — serve large free base + support
📊 High acquisition; low-to-moderate conversion
💡 Educators, audience builders, early-stage creators
⭐ Low barrier to entry; strong top-of-funnel
Tiered Pricing / Multi-Tier Membership
🔄 Moderate — tier design & management
⚡ Medium — varied feature delivery per tier
📊 Higher ARPU; better segmentation and upsell
💡 Agencies, course creators with multiple levels
⭐ Captures different willingness-to-pay
Usage-Based Pricing (Metered Billing)
🔄 High — metering, real-time billing systems
⚡ High — tracking, dashboards, billing infra
📊 Revenue aligns with consumption; variable predictability
💡 Platforms with variable usage; API-heavy products
⭐ Fair billing; lowers entry friction
Marketplace / Commission Model
🔄 High — two-sided network + escrow/ops
⚡ Medium-High — marketplace ops & trust systems
📊 Scales with transaction volume; network effects
💡 Marketplaces, course marketplaces, platforms
⭐ Scalable with minimal marginal cost per transaction
License / Perpetual License + Maintenance
🔄 Moderate — license tracking & upgrades
⚡ Low-Medium — upfront sales effort, support
📊 Large upfront revenue + recurring maintenance income
💡 Agencies selling lifetime access; enterprise clients
⭐ Big upfront cash + ongoing maintenance margin
Sponsorship / Advertising Model
🔄 Low-Moderate — sales, ad ops, metrics
⚡ Medium — audience growth and sales effort
📊 Revenue grows with audience size and engagement
💡 Newsletters, podcasts, blogs with large audiences
⭐ Monetizes audience without charging users directly
Consulting / Service-Based Subscription
🔄 Low-Moderate — service SLAs and delivery
⚡ High — expert time and relationship management
📊 Predictable retainers; high margins per client
💡 Coaches, consultants, agencies on retainer
⭐ Strong client relationships; high per-client value
Annual Prepayment Model
🔄 Low — pricing and billing setup
⚡ Low — one-time admin, improved cash flow
📊 Accelerated cash inflow; better retention metrics
💡 Course creators, communities, subscription services
⭐ Immediate revenue boost; reduced churn
Affiliate / Revenue-Share Partnership Model
🔄 Low — tracking links and partnerships
⚡ Low — content + partnership management
📊 Passive commissions that scale with traffic
💡 Template creators, content creators, niche blogs
⭐ Low overhead; high margin once traffic exists

Choosing and Launching Your Recurring Revenue Model

We've journeyed through ten distinct and powerful recurring revenue business models, from the straightforward Membership Subscription to the strategic Affiliate Partnership. Each model offers a unique pathway to creating a more predictable, scalable, and ultimately more resilient business. The core takeaway is clear: the "one-time sale" is no longer the only, or even the best, way to build a sustainable enterprise. Shifting your focus to long-term customer relationships and consistent value delivery is the cornerstone of modern business success.
The models we explored, such as the Freemium, Tiered Pricing, and Usage-Based approaches, are not mutually exclusive. In fact, the most innovative companies often blend elements from several models to create a hybrid that perfectly suits their product, market, and customer base. The key is to move beyond simply picking a model and instead, to architect a value delivery system that grows with your customers.

Synthesizing Your Strategy: From Theory to Action

Choosing the right path forward requires introspection and strategic alignment. Your decision should not be based on industry trends alone but on a deep understanding of your own operations and customer needs. As you transition from learning to doing, focus on these critical decision points:
  • Value Proposition Alignment: Does the model naturally fit what you offer? A Usage-Based model is a perfect match for a cloud storage service where value is consumed incrementally, while a Membership model is ideal for a community or content library where value is access.
  • Customer Behavior: How do your customers prefer to buy and use your product? If they are risk-averse, a Freemium or a low-cost entry tier can remove friction. If their needs scale dramatically, a Usage-Based or Tiered model allows them to pay for precisely what they need.
  • Operational Complexity: Are you prepared for the operational demands? Metered billing requires robust tracking systems, while a Marketplace model necessitates managing two distinct user groups (buyers and sellers). Start with a model you can realistically support and evolve from there.
The beauty of recurring revenue business models lies in their dynamic nature. Your initial choice is not set in stone; it's a starting point. The most successful businesses are those that listen, measure, and iterate.

Your Next Steps to Predictable Profitability

Mastering these concepts is more than an academic exercise; it's a direct investment in your company's future. Predictable revenue reduces financial anxiety, enabling you to make smarter, long-term investments in product development, marketing, and team growth. It transforms your financial forecasting from guesswork into a data-driven science.
To put this knowledge into practice, here is your actionable roadmap:
  1. Select Your Top Two Models: Based on the article and your business context, identify the two models that seem like the best fit.
  1. Model the Financials: Create a simple spreadsheet to project revenue for each model over 12 months. Consider customer acquisition cost (CAC), lifetime value (LTV), and churn rate. This will quickly reveal the financial viability of each option.
  1. Map the Customer Journey: For your chosen model, outline every step a customer takes, from discovery to sign-up to upgrade. Where is the friction? How can you make the onboarding seamless?
  1. Identify Your Technology Stack: What tools do you need to manage subscriptions, gate content, and track metrics? For many creators, agencies, and solopreneurs, platforms designed for this purpose are essential.
Embracing one of these recurring revenue business models is about more than just changing your pricing page. It's about fundamentally reorienting your business around the principle of ongoing value. It’s a commitment to your customers that you will be a long-term partner in their success. By doing so, you secure your own.
Ready to launch your own membership or subscription business? Sotion makes it incredibly simple to build a secure, branded member portal on top of your existing Notion content. Turn your expertise into predictable income by visiting Sotion and start building your recurring revenue engine today.

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Bruce McLachlan

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Bruce McLachlan

Meet Bruce, the founder behind Sotion, and explore his vision on enhancing Notion Pages. Get a glimpse of the journey and the future roadmap of Sotion.