Why teaching.com swapped free trials for guarantees (and won)

Here at RevenueCat, we talk a lot about the ins and outs of developing consumer subscription apps, and most of the time, the target user base for those apps is adults. But what if you want to develop an app for younger audiences? Today, kids are digital natives, with easy access to the internet and mobile devices — and many app developers are rightfully interested in building subscription products for them.

This week on the Sub Club podcast, we chatted with Tim Dikun, COO of Teaching.com about the unique opportunities and challenges of developing apps for children. Founded in 1997 by Austin Butler, Teaching.com is a suite of educational apps designed to help children learn and improve their reading and typing skills. We sat down with Tim to learn how he and his team approach building subscription products for kids and what they’ve recently learned from testing their paywall and pricing.

Balancing AI with the human touch

These days, most apps are finding ways to incorporate AI, and Teaching.com is no exception. But according to Tim, AI’s applications for helping children learn are limited: AI algorithms aren’t yet sophisticated enough to, say, provide feedback on a child’s pronunciation of a given word or sentence. Coupled with the fact that research shows kids learn up to 19x more effectively when adults are helping them, Tim and his team decided to strike a balance between using AI and parental participation to achieve the best possible learning outcomes for kids. “The AI isn’t good enough at this point to know whether or not the child did that correctly and to give it feedback,” Tim said. “What we really need is somebody sitting next to the child being able to give the child that feedback.” By requiring parental participation in their child’s in-app learning, Teaching.com is demonstrating their value to parents and kids alike and ensuring long-term investment and retention.

Learning with experiments

Developing an app for kids isn’t without its challenges, especially when it comes to data privacy laws and user consent. As Tim points out, “There’s a lot of tooling out there for mobile apps that we just can’t use because Apple won’t let us — because it’s a kids’ app. And I get it, it makes sense. It just means we have to get a little creative and find ways to get the information that we’re looking for.”

For the past few years, Teaching.com has been running experiments to test different strategies for optimizing their LTV. One of their greatest successes was implementing web-to-app onboarding. “I think it was 50% better conversion to trial and then a 30% better conversion to paid than the same exact onboarding in the app, which was just astounding to me that it worked so well,” Tim said. Tim suspects that this approach worked for Teaching.com because they’re an established brand that users have known and loved for nearly 30 years, so users felt they could trust the onboarding experience on the web.

Tim and his team also experimented with replacing their free trial on the web with a 30-day money-back guarantee. While this caused a slight reduction in conversion rates, the end result was an increase in revenue and LTV. As Tim explains, “When you have a purchase-only funnel, every user that gets sent back to the ad network is one that’s high-intent, high-quality. And so the algorithms are able to better find users just like that. And therefore the reduction in conversion rate is made up for based on the higher quality users, and they end up sticking around longer. And really not many folks actually reach out for a refund.”

Company philosophy

Tim and the Teaching.com team have a strong — and some might say unconventional — point of view when it comes to how their team works. One of the main ways that they’re different from the average company is that they’re committed to encouraging employees to find focus. Team members communicate asynchronously via Basecamp and Slack, and everyone keeps their notifications off to minimize distractions. Employees can send instant messages for time-sensitive issues, but in general, slowing down communication by encouraging asynchronous status updates allows team members to do more deep work and stay productive.

Tim and his team also don’t adhere to any strict product development frameworks like Scrum — they feel that this reduces developers to ticket-takers and stifles innovation. Instead, developers are encouraged to be creative and flexible, even making late-stage changes to the product if it serves the interests of the end user. This approach lets Teaching.com stay agile and develop better products in fewer development cycles.

Conclusion

The Teaching.com team has found a unique and lasting niche providing kids and their parents with fun and effective tools for learning. To hear our full conversation with Tim, check out the latest episode of the Sub Club podcast.