How Subscriptions Revolutionized Darkroom’s App Business
Learn how to create a financially viable business with the award-winning app
David BarnardJune 27, 2022
Six years after its launch, Darkroom is an award-winning photo and editing app with a recurring revenue model that supports a team of five employees.
But that wasn’t always the case.
Before moving to a subscription model in 2020, Darkroom generated revenue through low-cost in-app purchases.
And even after Darkroom landed a coveted endorsement from Apple’s App Store editorial team, it turned out not to be a magic bullet for growth.
The business really started to take off when Majd and Jasper got serious about the project. They spent a year restructuring Darkroom’s business model and making much-needed upgrades to the app.
On a recent episode of The Sub Club Podcast, Majd and Jasper discussed the lessons they’ve learned (sometimes the hard way), why not all developers need VC funding, and their strategy for successfully making the switch to a subscription model while keeping existing users happy.
Before subscriptions were the rage
Darkroom’s story begins in the majestic fjords of Norway, where Majd identified an unmet need with his iPhone. An avid mobile photographer, he struggled to efficiently navigate the 150+ photographs he took on his daily hikes.
Having recently left his cushy job at Instagram, Majd set out to create a photo editing app that doubled as a photo library manager. The product lets mobile photographers edit and save images in batches without having to switch between multiple interfaces.
The company’s initial strategy was to entice a large number of photographers with free access to the app and then upsell premium filters and features. In the initial years, Darkroom focused primarily on selling filter packs, using a shopping cart model where users could opt to purchase multiple low-cost in-app purchases.
“Our most expensive thing was a tool for $5. And $5 was expensive in 2015,” says Majd.
But the monetization plan was poorly conceived — many users didn’t even know they could make purchases in the app. Additionally, Majd and Jasper struggled to measure early success due to a lack of competitors in the photography app category.
“The category itself hadn’t really established itself as being a worthy business model,” says Jasper. “It was a weird space to be in where you didn’t have a lot of reference. Now, that’s a very different game. But back then, it was a Hail Mary.”
Landing the top spot at Apple
Jasper and Majd’s intuition proved accurate as the co-founders managed to grab the eager attention of Apple. The app snagged the top banner in the App Store at launch and went on to be featured in Apple’s “Best of February” and “Best of 2015” promotions. By landing such coveted endorsements by Apple, Darkroom gained credibility and name recognition from day one.
Darkroom benefited greatly from the free publicity, but the public recognition wasn’t the product of luck. Instead, it was the result of careful, strategic planning and knowing the right people.
“We were in a really privileged position,” admits Majd. Both Jasper and Majd had strong connections in the industry through their time working at Instagram and Facebook. At the time they were “bumming desks” at a now defunct company, The Factory, where they met an Apple App Store consultant who believed in the product and helped set up a meeting with the right people.
Majd also had prior work experience for Apple and was intimately familiar with the brand and internal company culture. As a result, he knew the work needed to be “pristine and gorgeous” and he set out to prepare a perfect pitch — even wiping down fingerprint smudges on the phone they’d use for demonstrations.
“I knew that when I went to Apple they’d see something that fit the Apple brand, and that’s been a consistent theme throughout Darkroom’s six-year journey,” says Majd.
The aesthetics were not just designed for Apple, but also the functionality. By taking advantage of the APIs coming out in the soon-to-launch iOS 8, Darkroom presented an app that would also show off the latest features of the tech giant’s latest product.
As a result of careful preparation and strategic design, “Apple featured the crap out of us,” Majd recalls.
Lessons learned from a flawed launch
The glowing endorsement from Apple meant that Darkroom experienced high traffic and organic downloads, but the co-founders quickly realized that despite a big publicity push for the app, the launch itself had some shortcomings.
1. Too many products at too low of a price point
Darkroom’s initial design came with a high cognitive load. Users were offered too many products, and the company was undercharging. The company also wasn’t pushy enough about sales. As a result, users struggled to understand which features were free and which required an in-app purchase.
2. The wrong marketing strategy
At the time, Majd and Jasper were focused on the utility of their app. As avid photographers themselves, they approached development through the lens of their own personal use for the application. In doing so, they overlooked the now obvious: filters are an aspirational product more so than a functional product. As a result, their initial marketing efforts focused on the function when they should’ve focused primarily on influencers to drive marketing efforts.
3. Attracting low intent users
Darkroom was fortunate to gain so much attention from Apple. But an indirect consequence of such immense free publicity in the app store is that metrics can be misleading. By being featured so frequently, the app attracted a significantly high number of low-intent users, which skewed conversion metrics.
“Downloads aren’t really the currency we care about,” explains Jasper. “It’s really about if it converts into a purchase or a subscription.”
Pressing pause — and then product-market fit
Majd and Jasper lost steam for the project and gradually moved their attention elsewhere. But after some time away, Jasper began to see that Darkroom wasn’t going anywhere.
After a year of not touching the app, it was still generating $70,000 a year. Jasper believed the app’s inertia proved that with new energy (and more focus), it had potential.
Another data source was also giving them the nudge. Majd’s friend was the co-founder at Heap Analytics and had offered Darkroom enterprise-level services at its introductory price point. But by 2016, Heap Analytics had run into a problem: Darkroom was generating so much traffic that it cost Heap way more to process the app’s data than Darkroom was paying.
All the signs pointed to one thing: Darkroom was a strong product-market fit; it just needed some TLC.
Jasper convinced Majd to resume work on the project. Together they committed to spending a year fixing bugs, adding new features and “doing the bare minimum” startup business tasks.
“In a year, we went from $70,000 to $120,000 and thought, Oh, cool. We can kind of pay ourselves now,” recalls Majd.
Transitioning customers to a subscription model
Darkroom officially made the switch to a subscription model in 2020, but the change required careful planning, especially when it came to longtime users, all of which were grandfathered into the new subscription.
With a transparency-driven mindset, Darkroom communicated the change to its existing customers and gave an option for longtime users to financially support the app even though it wasn’t required. To Jasper and Majd’s surprise, many users took them up on the invitation.
But still, Darkroom accepts its early adopters as financial losses. It is focusing now on bringing more subscribers in and taking advantage of the recurring revenue of this new model.
The company’s strategy for growing its subscribers remains focused on user experience and creating premium-quality features. Additionally, the company looks to expand its functionality to iPads and Mac computers.
Chasing the long play
Darkroom and its founders have grown over the years, learning lessons along the way and designing an app (and a business model) that gives them financial security while preserving the integrity and control of the product.
Jasper and Majd plan to remain in control of Darkroom, acknowledging that the product is not a good fit for venture capitalists. Instead, they’re focused on growing the indie app to support the lives and families of the company’s small team.
“It’s not a trade-off we’re willing to make today,” says Majd.
Today, Jasper and Majd remain committed to their long-term vision for an app that revolutionizes mobile photography. “We’re not chasing peaks; we’re chasing high baselines over a long period of time,” says Majd.
This article is based on an episode of our podcast, Sub Club, which explores best practices and insider secrets for scaling your app. Subscribe via Apple, Google, Spotify or wherever you get your podcasts.