Subscription App Trends 2022

How to grow your app – regardless of what happens around the industry

February 22, 2023

From App Tracking Transparency to App Store lawsuits and regulation, 2021 was a big year for subscription apps. Join us to talk through predictions for what 2022 might look like and how to grow your app no matter what happens around the industry.

  • Transcript

    Hello, everyone. Welcome to the subscription trends 2022 event here with Thomas Pettit and Eric Seaford. Looks like we have a lot of people who’ve joined, so I won’t dilly dally too much. But so a little, little housekeeping. This is our first time to host on a live storm. New streaming platform for us. There’s a chat us hosts will probably have a hard time following the chat, but we do have some revenue cat folks in the chat. And then if you have specific questions, go ahead and drop them into the questions section and we’re going to try and get to those at the end. So Thomas and Eric, you’re going to try and talk a little faster. Were all three of us tend to ramble a little bit? So today we’re going to try and be concise so we can leave some room for questions. Yeah, with that, let me do some intros. Thomas is a world renowned mobile growth expert, independent consultant. Anything else you want to say, thomas? No, not much. I’m thrilled to be here, especially a subscription topic of the day. And yeah, super glad to exchange with the two of you and Eric super as well. Also independent and writes for mobile dev memo. Many of you’ve probably read his work. Prolific writer. I wish I could write a post every Monday like he does. Revenue cap wishes I would as well. But Yeah. Welcome, Eric. Anything else you wanted to say? Happy to be here, Thomas. You do like one or two podcasts a week. Have you never upgraded your gear there? What? it sucks. I’ve got a I’ve got a normal Mike like one of those. But then I’m going to ask the revenue got to sponsor that should. Yeah all right so the topic of the day is trends for 2022. Now, Thomas and Eric both wrote a fantastic post as part of why we are hosting this event and decided to have both of them on. Many of you have probably already read the post, and if you haven’t, they’re both fantastic. You can search, you know, 2022 mobile dev memo and you’ll find Eric’s post and then on the revenue cap blog. Thomas did a guest post for us with some of his 2022 thoughts. So today, instead of completely rehashing those posts and just kind of talking through exactly what they had already written, I’m going to try and kind summarize some of what they discussed and then kind of ask them the questions that I was curious about when I read their post. So we’ll try this format and see if we can’t move a little quicker that way versus kind of rehashing the entire post. So what I want to kick off with, which I think is one of the more interesting trends that we’ve seen and Eric is predicting this trend is going to continue to grow in 2022. And that’s a term Eric actually coined in 2021 is content fortresses. So just a quick summary of Eric’s writing on the topic is that Apple with app tracking transparency somewhat arbitrarily but somewhat way self-serving, Lea defines tracking as anything that is third party data. And so the interesting part about that is that the more data you can collect as a first party, the more trend, the more tracking you can enable. So for example, and he gave this example, in his post. Facebook shops is a perfect way for Facebook to have complete visibility from showing the ad to completion of transaction with 100% valid visibility, 100% data collection. So sending somebody out to a Shopify store is very different from a data collection perspective than being able to keep them inside the content fortress. And of course, in 2021, we’ve seen some pretty big acquisitions on that front. We saw just acquired the mobile measurement provider. Microsoft just acquired a huge gaming studio, take-two acquired Zynga. So there’s a lot of consolidation building these content fortresses. And again, you can read more about Eric’s thinking on his blog. But Eric, so I wanted to kick off with a question to you. Is that with this trend toward content fortresses, what does it actually mean to mobile app developers? How can they partner with what are they going to benefit from. And at what’s may be like something they need to defend against or kind of watch out for with this growth of mobile content fortresses. Yeah so the idea of a content fortress is that, you know, you’ve got it’s like an evolution of the walled garden, right? So like a walled garden is a platform or a property that sells owned and operated ad inventory. Right and the idea there was I buy that at inventory and drive users to my property, right? So it’s like a way of renting engagement from a bigger platform and why that doesn’t work in this sort of new privacy environment. And part of that is the results of it. The winds have been blowing in this direction for a long time, and they’re going to continue to blow in this direction. Right now, Google is making moves around limiting the grid. And there are a number of bills that, if passed, would radically alter the sort of like mobile advertising or digital advertising landscape. So like this privacy concern is driving things in this direction in a while. For a while. The difference being content fortress and a walled garden is well, a walled garden. I come in and what it means to be a walled garden is that we’ve got inventory where you can only access it through our ad platform, right? Like we put a big wall around our inventory. And if you want to access it, you’ve got to pay us. Right there’s no we don’t work with like middlemen. We don’t work with that tech vendors that sell our inventory on our behalf. Ultimately, like user clicks on an ad and they go somewhere else. They leave that property and they go somewhere else. Right and the problem. Position there for the platform is like, well, we know they’re going to come back. We know we’re just sort of like renting their engagement. They’re going to go to this property and make maybe they’ll make a purchase, maybe they’ll start playing a mobile game or whatever. But we know they’ll always come back. Well, you can’t do that anymore with ADT. You can’t. And you won’t be able to do that with a lot of the privacy changes that are coming. And so what a content fortress does is it says, look, you’re not going to be able to efficiently drive people to your independently operated property anymore. Why don’t you take that property, operate it on top of our platform? And if you do that, when you buy ads from us, the transaction happens within our purview, within our line of sight. We get to track where we get to keep all that data. I didn’t mean to use that word track. This is live so we can’t edit it. But we get to observe all those transactions, all that engagement. We get to keep the data that engagement emits. And we can use that data to optimize your ads in the future. So it all happens kind of within our environment. And you know, the canonical example is Facebook shops, but there’s any number of examples that you can point to, any number of any number of ambitions that you can point to that were sort of outgrowth of very recent things like all this stuff has been catalyzed by ADT. And so, you know, if you’re an app developer, what does that mean? If you’re in ecom retailer, what does that mean? And I’ve been kind of predicting for a long time. I wrote AI wrote a piece many years ago called The Future of the app, mobile app stores. And like, what does it look like? Does it look like an actual store? No, my thesis there was it looks like a big platform saying, hey, you’re better off operating in our app, so why don’t you do that? You’re not really independent anymore. But what choice did you have anyway? And the example I gave was like, what happened if Uber absorbed, you know, some other service? Well, they did that. They absorbed a lot of other services. And they allowed the Uber app to deliver that. Right and so, you know, things have been moving in that direction for a while just because of the competitive environment. But now because the privacy environment, independent app developers are facing, you know, a real loss of efficiency in terms of driving people with these platforms to their own websites. And so what do you do? First of all, if you’re an indie developer of anything, your valuation probably just took a hit because you’re not able to grow like you were before. Right? do you? Do you think we’re going to actually see some consolidation in apps as well? You know, like IAC is kind of a great example. Over the last 5 to 10 years, they bought up a lot of apps. And, you know, I’ve talked to a few people inside IAC over the years and they do coordinate quite a bit, but they haven’t always like pulled them all into one App Store account and like share data across the multiple companies. Do you think we’re going to see the rise of app conglomerates that actually pull together more portable apps? In the. Oh, great. We lost Eric. I think we lost Eric here. Live event. And of course, it’s an exam question, right? When he dropped out. I guess what we’ve seen is like on the bigger player side. And yeah, I mean, very, very big player buying, big player like take-two in Zynga or the Microsoft example that you said at a smaller scale. I don’t know if the effects out there. I mean, I’m seeing a couple of apps that are instead of trying to grow from 20 million to 100 million to five times 20 million, but then the effects that Eric is mentioning that just don’t happen at that scale. Like it’s kind of it may make sense for other reasons. But in terms of aggregating data is just not at the same level that would unlock those effect. And I think it’s a bit of AI wanted to say pie in the ocean, but that might be another one of the companies I have seen starting to make a move in this direction. I don’t I don’t think it’s necessarily data incentivized but reflect Lee has been buying up quite a few apps in the space and kind of building this kind of mental health and fitness and kind of brand around the entire core proposition of their original app. So yeah, it will be interesting to see. And Eric, so I was asking the question as you dropped off, do you think, you know, companies reflect Lee that are starting to grow this kind of broader ensemble of apps, do you think we’re going to see more of that. And even at a larger scale, or do you think that’s not something that’s going to start to take hold in 2022? So so first of all, I was almost done with my rant, so I think we’re going to move on. Yeah, I feel like that is maybe it’s a strategy, but that’s hard to pull off, right? Like, I think what we’re going to see is and this always is the case, you see these big platform policy changes is going to benefit the biggest investments. And so I think like, yeah, maybe a reflect like in I don’t know how big reflect Lee is right. And I hear a lot of great things about them. So maybe they can execute this, but it’s really, really hard to start from a much smaller, like base and do like a roll up strategy, right? Usually you need to be like much bigger scale to it to pull that off. So like it’s like the people kind of in the middle, maybe some of them can roll up and become big. Probably what happens is a lot of them just end up losing, losing momentum and then getting rolled up themselves. Yeah and I think one of the more interesting trends there that I’ve been watching is Apple becoming their own app content fortress. So it seems like they’re kind of picking off the major kind of subscription app use cases one by one. They made a big push in their weather app, which that’s a huge and I have a weather app, so I pay attention to that closely. Fitness plus, you know, goes to Head to head against. One of the biggest categories of subscription apps in the App Store is going to be interesting to see music app where did you see that news plus and I mean, it goes on podcast is the thing yesterday with like Neil Young is a folk singer he left Spotify because of Joe Rogan and like the next day Apple Music had like had a contract contracted him with the exclusive access. Yeah so, so Yeah. It’s going to be interesting to see how Google and Apple play this because they’re in some ways best positioned to actually go after, you know, all the kind of biggest use cases on the App Store. And Apple’s clearly headed that direction already for services revenue. But then that brings us to the second topic that I want to ask Thomas about. You know, should Apple be regulated? You know, they’re competing head to head against Spotify Fitness Plus is competing head to head against Peloton and other apps in the App store? You know, between the epic lawsuit, the open App Markets app, the small developer, small app developer settlement. I mean, the list just goes on and on. Apple’s being bombarded from every side. And again, Thomas wrote extensively about this in the guest post he did on the revenue catalog. But I’d love to hear where does the rubber meets the road in 2022 for app developers? Thomas, what do you think we’re actually going to see? Where do you think we’re going to see meaningful impact? It’s like there’s a lot of noise right now, but there’s not a lot of action. So are we going to see action in 2022 and what’s it going to mean for app developers? I’m afraid we’re not going to see like a meaningful action like worldwide on many points at the same time. And the problem for regulators is there’s so many different aspect that they have to look into. And at the moment, a lot of the conversation is focused on third party payments. On that particular topic, I think absolutely nothing is going to happen because Apple is going to push back because it’s going to take a while. At the moment, what we’ve seen is very localized, a little thing here in South Korea and then just the dating apps in the Netherlands. I remember on mobile dev memo, somebody joking like what’s next productivity app in the Vatican like. And I think here like it’s kind of the OK third party payment may be a thing for a bunch of developers and a fee may look high for a number of business where it doesn’t make sense. But for most developers it is pretty relevant because IP are efficient and. Even if they’re allowed to. I don’t think a lot are going to do it just because the difference in cost is not going to be justifiable. And I don’t think we’re going to see a huge, maybe huge change in terms of regulation, but not huge change in terms of how user pay. Normal developers. This this would be a huge breach if is suddenly the biggest one, the biggest revenue driver which are gaming apps could start building their own and maybe it would have a dent. But that’s the one thing they’re going to resist. That’s why Apple. A lower down to 215 for subscription only because it doesn’t hurt them that much. And that’s why they’re opening here and there. But I don’t think we’re going to see massive change here. And in all of this, there was conversation on sideloading like Elodie allowing you to install from third party, which I don’t think it’s going to be as easy. It’s a load on the Google Play. Try to do it. It’s a nightmare. So nobody does it. And in the meantime, the conversation on how the platform actually competes with developer with like Fitness and Apple Music and news and so on, just doesn’t happen. And I think here there’s a much, much bigger breach in a sense because, OK, the platform has a lot of control, but as soon as the platform is also a developer, in a way, it’s kind of directly threatening for the developers. And I haven’t seen that conversation happen at all at the moment. Just kind of Spotify kind of brings that up a lot. But, but we haven’t seen enough actual action on that kind of stuff. Eric, what do you think you agree with thomas? Do you think we’re going to see much impact in 2020? It’s hard to say. I think you don’t see anything meaningful unless the US steps in. And I don’t know that there’s a lot of political willingness to do that. I do think maybe you see the EU is probably more likely of a sort of governing body or the ec rather to make a decision. They’re like, but, you know, the Spotify lawsuit predates the epic lawsuit. Right and like they ruled on it, but they didn’t really issue a judgment. And so we’ll see what happens there. I don’t know. It’s hard to say. I think the way that Apple is playing us now is like we go Geo by Geo, we go category by category. And we make it so difficult for you to even embrace these options that we make available to you, that you’re just going to revert to the defaults. Right? like the thing about what’s really frustrating about the Dutch ruling is that Apple said, OK, fine, we’ll let you do alternative payments, but you’ve got to upload a Dutch store exclusive SKU. Who’s going to do that? No one’s going to maintain an app SKU. And then a separate one for just the Dutch app store, which probably represents point 5% of revenues or something like there’s just no way. Now, the Dutch regulator did push back and they find them and it’s they’re going to find them every week until they actually comply. But that fine is nothing. I mean, that’s just like a fly buzzing around Apple’s ears. It’s not even irritating. So I don’t I don’t see a real movement there. My sense is that, like, if you’re an app developer, you should be planning on paying the full platform fee and utilizing the native App Store systems for a long time. Unless you want to unless you want to really try to build out in the direction of the web and build a real workflow around pushing people onto the web. Right and that means doing your way for the web. That means communicating via email to get people on the web, to try to get people to make their subscriptions on the web. Now, that takes a lot of work, as Thomas will tell you. And I think, you know that that’s probably a really interesting discussion to have. But like, how do you make that work? It takes a ton of iterative testing and takes a big team, takes like a growth team. It’s not something that, most is, you know, one, two, three person developers can actually pull off. Yeah and to bring us back in, I think the most interesting thing we’re learning from 2021 that predicts what’s going to happen in 2022 is that Apple’s going to fight tooth and nail. So yeah, so like, you know, it’s a perfect point is that, you know, if you’re a big developer and have the resources and time to try these things, you know, more power to you. And there are successful strategies on the web and win back campaign to push people to the web instead of the app. And then you can actually measure performance because you can do it in a more sophisticated way. But it’s just going to be hard. And with Apple pushing tooth and nail and things starting to potentially come down Geo by Geo, it’s just going to introduce more and more complexity versus more and more simplicity for developers, more regulatory burden then kind of regulatory creation of freedom among developers. So yeah, apple, Apple fighting the way they have, I think is, is, is in some ways a bad sign for the ecosystem more broadly that they’re putting up a fight versus kind of starting to be make some concessions in the direction of making things easier on developers both that I did want to shift to break out app category. So Thomas had a great section in that guest post about apps that he thinks are going to kind of break out and kind of trends happening in 2022. Yeah, I’d love for you to step through that. Thomas tell us about some of the top categories you think are going to do well this year. Well, that was a bit of a risky bet. You know, I don’t know what’s going to happen in some spaces. I see kind of the evolution. And I tried to sort by big blogs and kind of health and fitness is one I was very involved in and I was looking to take kind of the first wave when suddenly older fitness app like had a big boom and I was just in the right place at the right time and I thought, Oh yeah, I can do workouts based on my mobile learning. And it’s been fairly growing big in 20 1617, I’d say. And then suddenly you see another wave comes. And in maybe 18 and 19 it was like a lot more focus on, on meditation and the space. The whole category was mostly like, OK, first fitness, then meditation, and now it’s very exciting because we’re starting seeing like a very innovative product that are not as simple. And I think like those wave, they keep going at the time. For example, I believe reflector couldn’t have grown that much if before headspace and calm didn’t open up and not just in space too. There’s they’re not doing the same thing but they kind of open up next wave. One thing I’m slightly worried about here is those waves. They tend to go more niche, which means there’s a lot of business to open for indie developers and small size company. But a lot of the ideas I’m seeing coming now, I’m not sure they’re going to be a billion dollar company like and it’s fine. It’s just have from the get go, I’m more worried for some investment that thinks that some very niche mental health or whatever. Mental health is huge, but the approach that we start seeing are more and more niche, and I’m not sure those are going to be billion dollar company, but it can be very viable business for one, five, 1,050 people, no problem. And so a few of them were around sleep, a lot of them around the workspace as well. And in the sense that I mean also with COVID and the way we work has changed a lot. And there’s a little bit of a merger between B2C and B2B. In that sense, maybe it’s not a huge job, but I think it was kind of relevant that Allen, a French startup that works around social benefits for worker acquired, reflected competitor. Sure and to integrate it within their services. I think that was kind of a very interesting move among others. But yeah, I’m not sure we’re going to see another count in those subspace. There’s just so many of those subspace like professional development. I mentioned an app called bunch bunch AI in there, and the app is fantastic. Like, it’s amazing like in a way, like in personal development, kind of Blinkist opened a way for a lot of new products that are out that I’m seeing now in that space. So, so that’s one if I look at productivity in particular, something a little bit similar happened. Like first it was like, OK, I’m normal photo editors like general generic photo editors are basically doing Photoshop on your mobile in a simplistic way, in a more simple way. And then now what we’re seeing is a lot of the space is. Gearing towards greater. How to make better to. How to make more professional stories. Because there’s a huge demand on that in a category that is not only at a personal level, but also at a semi-professional level, not multimillion dollar youtubers, but actually a lot of mid-size influencers that want to grow professionally and and that those obscures the world. So it’s kind of also blurring line between B2B and B2C here. Lots of apps targeting small businesses and individuals. And I’m seeing a lot of innovation in that particular space in photo and video editing get is going crazy and and I think they’re going to drag behind them. 20 medium size app that are going to gross 20 or $50 million a year. But none of them might become a billion dollar company and maybe copycat is going to be the only one I don’t know or TikTok is just going to buy them out and that’s it. And what do you think’s going to happen in Web3 and crypto in 2022? Kind of a big topic. Everybody’s talking about it at the end of 2021 and with crypto crashing a bit the past few weeks, do you think that’s going to kind of put a wet blanket on all the hype? No, I don’t think so. Like, I mean, the price of crypto is doomed to go up and down. Like the fluctuation is part of it. And now it took a little bit of a crash. Maybe there’s a much bigger one coming. I have idea. I was just mentioning this category because I think at the moment for very understandable reason, like kind of this whole development has been done entirely outside of the App World. And I see this something limiting adoption going mainstream is you weeks of all this product in Web3 is generally terrible like it’s a lot of product made by developer for developers but without the accessibility that, that, that, that grandma needs to, to start using it. And I think the mobile because it’s so personal and everybody has it’s a is the way to open it up in some sector is going to be blocked just because you can’t transact crypto so easily and the platforms are not going to be too happy with that. They’re mostly blocking a lot of them. Yes, you can use Coinbase and there’s an open sea app, but there’s a lot of usage that they won’t allow. I still think that there are a lot of things to open up in that space where you don’t need to transact to actually unlock the benefit of that. It will benefit Web3 in the way that this is what can allow adoption to really soar beyond the because right now. Everybody’s talking about it. But if you look at the people really involved in it, it’s actually a very small, small amount of people. And it was more wishful thinking that if a few innovative apps come there, that can really change the game for Web3 and the sense that normal people will start having real usage. It won’t be only speculative or only a developer minded application. So hopefully, yeah, we need to see that breakout up in 2022 or yeah, I think it’s going to continue to kind of flounder and be more hype than delivery. I see there’s a lot of chatter in the, in the chat more focused on how to grow. And so. 27 minutes into the webinar, let’s switch gears and start talking more kind of rubber meets the road of like what do all this stuff is going on so many changes like how do we actually adapt our businesses in 2022? And with that, I want to start with you, Eric. One of the things you talked about in your post is the battle for measurement authority. I found that really fascinating. You know, a lot of people have talked about even pre 80, you know, MMP self attributing networks like there was already a battle for measure. Like it was not as accurate as people pretended it was. But now we’re moving to a place where not only is it not accurate, as people want to think it is, but it’s just hard to do, period. And your point was, you know, we’re going to have, you know, Facebook coming out with one solution and claiming installs and we’re going to have Google coming out with other solutions. And there’s going to be a battle for who’s source of truth that are we going to use. And I don’t want to rehash that thinking here, but I would love to hear from you. How do developers and then especially developers in kind of an earlier stage where they don’t necessarily have the kind of volume and the budgets to explore at scale, how do we find a way to somewhat reasonably accurately in some vague. Way measure rose. Yeah so I mean, I think you’ve got to think about those groups like as being very distinct from each other and the strategies are very different. Right so like, I think if I was launching a subscription app today, there’s just me, right? Let’s say I developed it myself for growth. I would be just very focused on what I think my most viable channel is, is probably Facebook, right? I would be driving as much traffic as I can to the web and trying to wrap my arms around that as much as I can. Right because everything you send to the App Store. Now is going to be mostly like money. Right in terms of what you can measure and what you can push into a model. Right so I would be trying to drive everything to the web using only Facebook. Right and I feel like I would just start there. And if I felt confident that I had very clear and sort of like systematic growth that was kind of informed by my model. Then I would start thinking about expanding from there. Right because you can’t what the problem is now, you can’t really rely on these ad tech partners that are supposed to do this for you just can’t. They’re not doing it in a way that best serves their interests. Right and I’m talking about MPD’s and I’m talking about many of the other kind of ad tech solutions. Right so I would be just trying to do this myself, using one channel, simplified as much as possible, drive as much as I can on the web, try to capture as much information that I can from the user on the web and then push them into the app. And I feel like if I can manage that workflow and I felt confident that, that, that, that my model was reflective of reality, then start to grow, diversify, and other channels start trying to drive people to the App Store. But I feel like that’s where I would start and that’s where I would try to master. In fact, before I got before I did anything else. And you could do that. One person could do that, like one person could manage that. Now the website is you might outsource a team to just do the Create the content and create the onboarding because you’re going to test that a lot. But I feel like if you’re able to do that, you’re able to get people through a web onboarding, you’re able to capture a lot of data about them, and then push them to the app. That’s like that’s like fairly transparent measurability. But if you try to push people to the App Store without any of the, the tools that the bigger team tab, you’re just you’re never going to be measuring that correctly. Now, once you get to a medium sized company, then you start thinking about, OK, we’re going to incrementality testing, we’re going to do, you know, survey. How did you hear about us when you hit the app so that we can try to know, we can try to triangulate, like the source of the users, but all that stuff takes people. It takes analysts, right? It takes models. And it’s hard to do with a one person show. So I think, like, if I was a one person developer building a subscription app, that measurement, I would manage it that way because again, with if you drive people to the web buttons, right, that doesn’t go away. So you still capture a lot of that information. Then you get their email address right away. They potentially subscribe right away. You can do a lot of things that allow you to close the loop that doesn’t violate ADT. Right and keep in mind, all this stuff is coming to Android to no one’s talking about it, but it’s all coming to Android. It’s going be slower, as you say, less extreme. But in 3 years, Android is going to look like Apple looked like right before ADT, which was a high penetration of LTE on. Right which which which was which which made the sort of MMP claims such an egregious farce. Right you had almost 50% of people in the US that had had LTE on, so what were they doing? But anyway, and then the other thing that I would be doing if I was, you know, a one person subscription app developers, I’d be testing pricing rigorously, right? And I’d be really trying to think what’s the optimal price and what’s the optimal subscription length to keep people engaged? Because really your goal as a subscription app and like any kind of Sas business, right, the model is kind of the same. You’ve got to compound subscribed users, you just have to make that compound over time. That means you have to retain those subscriptions. So if you’re doing a one year subscription, your most important metric is year two renewals, right? If you’re doing a three months subscription, your most important metric is month for renewals. That that has to be the core focus, making sure that you retain those people and pricing plays a lot into that. But also like the content journey, like what content’s available, why should they stick around? Do they get everything you need in the first three months? Right? all that kind of stuff is super important. And the way you do that, the way you bake in a lot of that retention is with social features that, that, that, that make the app really sticky and then make the content fresh. Yeah and then so so I kind of frame the question around, you know, small and growing developers, but we do have some, some fairly large apps and people who work with fairly large apps on tuning in. What’s your advice to apps that are doing million to $5 million a month in revenue and have the budgets and the people? Is there anything that you’re hearing from the people you talk to or seen with your own consulting of things that are working right now for bigger apps? You’ve got to get them. You’ve got to build a measurement apparatus. You can’t depend on them MPC anymore. You’ve got if you’re going to be using, you know, multiple channels at scale, you’ve got to do the measurement yourself. It is hard. You’ve got to build the tools to do that, right? And that’s doing incrementality testing, media mix, modeling, having these kind of probabilistic models that give you some sense of clarity around which channels are providing the best users. Right and that’s hard. It’s just a lot of work and it takes a team, but it’s super important because, you know, you outsource, too. That’s the piece before. Well, they weren’t really doing a good job of it. Right but now they can’t do the job at all. And so the onus is on you to do that. Do you think the mops and other solutions are going to help bridge that gap? Or do you think it’s a gap that the technology has to be so tailored to the individual app and an understanding of that individual app that it’s not going to actually work as a software, as a service as it has in the past. No, you could build those. I mean, those tools could be, you know, platform tools. mean, that’s what I was talking about, the blog post. I think Facebook is going to offer these kind of tools. Right right. But, you know, they’re going to work best if you only work with Facebook or the vast majority of spam goes in a Facebook. You know what I mean? And I wouldn’t trust a tool like that offered by Facebook. That’s a problem. There’s a bias there, right? I think. But I am shocked that the MVPs aren’t pushing it in this space. They’re trying to cling to this. They’re trying to cling to the status quo. Like even a clean room is not recognizing what the future looks like. The clean room is not a robust solution. A clean room will not be allowed in. It won’t be able to operate. Once you lose the IP address, a clean room is not going to function like I really don’t understand why they’re just clinging to the status quo. And this idea of deterministic user level attribution, or even now they call it probabilistic either level attribution. That’s not going to fly. It’s not going to work. It’s not future proofed. Yeah Thomas Yeah. I mean, I agree here that for me, it’s a bit of a surprise that they haven’t jumped onto, OK, how can we become the standard for medium x model or incremental? If I was leading just or branch or I’m sorry, right now, what I do is I’d snap a company like incremental or metric works and/or build it internally, which maybe they are, but they’re not selling it yet because it’s the continuation of it. And it’s going this way anyway. And not everybody can a one build this internally. If I take one example of a midsize app like you say we did build this in house took us 18 months to get two first actionable results. And of course if I have a Sas that package, it’s the time I would have to save on that. And plus those engineers and then the people that I have working on that have other things to do to get them to work on is just there was nothing in the market that was good enough. Like, I’m not saying building your own is not good. I’m saying there is definitely a space there and it’s surprising not to see them and B go towards it because it’s completely aligned with the mission they were fulfilling until their then not thinking about vendors but thinking about the developers themselves. You have to be aware that it doesn’t fully replace it. This new reality is never going to be the same as before, and that the result that I mean, somebody can give you all that incremental incrementality model can give you the nudge that just not the same level of granularity, the not the same level of confidence. And you have to live in a world that is more blurry. This is just the way it is. But I’d rather seem to do with one eye than being completely blind. Like it’s a no brainer. So we’re not going to have three division, which was a bit of a fake three division like Eric said. But at least I want to triangulate this reality in different ways. And in this particular case that I mentioned, where we build our own media mix model, we also have a provider for incrementality that is a size that we’re paying for because the two things answer slightly different methodologies and they help us raise a little bit confidence when we see that different models are pointing towards the same direction. Yeah, you know, just to piggyback on your comment, you know, that the biggest issue, like first of all, I don’t think you can build this stuff. I just don’t think they have. They were they’re not product lead companies, right? They’re sales lead. They’ve got kind of commodity tech. I think the other thing, though, that you see is like. It’s like, OK, you build a medium x model. And even if it’s working, you you still have to adapt to a lot of the changes that AZT created. Right the biggest issue that I see a lot of, you know, not I would say midsize and smaller. Right so one person shops, but also, you know, medium sized companies that are spending a decent money is like the whole creative paradigm change. Like you can’t it’s not just spray and pray anymore, right? Like that was the idea. I just create a ton of different stuff and try everything and Facebook will figure out what works well. That doesn’t work that can’t happen anymore because of the restrictions with AZT. And so, you know, my sense is like one of the know, there was a reliance, I think, creativity on like these creative outsourcing companies. Right like agencies that do all your creative for you. That’s why they were so valuable because well, how are you going to do all that creative yourself? And they can pump out 200 pieces creative every week. And you can do this brain pray thing. Well, now you’ve got to be a lot more thoughtful and a lot more considered about what you’re building. Right because you can’t deploy to integrate as a week. You just can’t can employ like 10 or 20, maybe. And so and so they have to be like conceptually very distinct, right? You can’t just be doing iterations on the same thing to see like, hey, does the blue background generate more higher click through and better realized and the green background or, you know, the character has or whatever like, you know, have blue hair versus yellow hair. You got to be just, just much more, much more sort of distinctive and radical with the differences between the creatives. And so that to me means, well, maybe don’t use outsourced shops anymore. Maybe you really do have to in-source out in-house it or or, you know, have kind of dedicated freelancers to doing that because it also requires a lot more knowledge of the product, right? Because a lot of these creative shops, the dirty secret, there’s a lot of these creative shops had templates and they gave you the same ads they were giving to your competitor. Right and like you never knew that because there were so many ads. Right how would you ever even see the chances of you seeing that are very low? But they would give you the idea. They would change it. They would change it. A little was not the exact same. They would make it, you know, they would sort of make it a little bit bespoke to you, but the general template was the same. And so that was a big problem because you were just competing with like basically the same content against a company that made an app that was, you know, very similar to yours. And so you’re just driving up each other’s prices and you were zeroing in on the ads that worked for each other. And so there was kind of like a death spiral in terms of prices, right? Well, you can’t do that anymore. You’ve got to build this stuff yourself and it’s got to really be informed by deep knowledge of your product. Yeah, I’m going to bounce a little on there. I agree. I agree with that is just because I saw in the chat that a bunch of people were talking about a look alike. And is this the return of interest targeting on facebook? What I believe is that this interest actually never works at all and that the look alikes, they are also slightly not damaged. Let’s say they’re not as efficient as they use. But then that’s where you have to approach a creative. Is the targeting the way you target audiences is by actually crafting the targeting into the ad itself. Facebook still has like first spotted around engagement on the ad and click through rate and view rate that shows them. Oh yeah, they said it looks like this, people like it. And that’s how you’re going to do a lot of the targeting, which is another reason to bring it more in-house because. You’d have to work for a very long time with an agency for them to understand that deep level of user persona and how your product is different. But I think that’s a good way of thinking about it, that the creative is the targeting right now. Yeah and a lot of the questions that we have in the questions section has actually hit the next few topics I wanted to cover. So with that, let’s go ahead and shift to start to take questions. And I want to kick it off with Karthik’s question. With AT&T. With at&t, can paid ads still work for small startups? What platforms and methods for running ads do you think will still work? So Eric, you already kind of talked about this a little bit and then I was actually really interested in how you were talking about resisting the temptation of brand centric thinking. So so in response to at&t, there has been a lot of talk about, you know, just spray and pray on brand advertising kind of stuff and don’t worry about measurement and just, you know, get the message out there. So, so, so first, I’d love for you to just touch on, on why you think people still need to do the hard work of making direct response advertising work. And then piggybacking on that, are there some high leverage organic channels, brand marketing that you do think can complement the direct response advertising? Yeah, I think people get confused when they talk about brand or they confuse the term brand marketing for what. For what it is. Right brand marketing doesn’t mean just like unmeasured spend, right? Like, spend where there’s zero follow up on what the result of that was, right? Like there’s direct response marketing, which is I show someone an ad and expect them to do something or I hope that they do something immediately after seeing it. There’s performance marketing, which is it’s more of a mentality. It’s more of a mindset. It’s like I spend money and I’ve got some sort of model that evaluates that spend, and there’s brand marketing, which is that the purpose of the advertisement is to sort of build some sort of association in the person’s brain so they make a purchase at some point in the future. Right and the direct response in the brand should always sit under that umbrella of performance marketing. There’s no there’s no non-performance marketing. There’s no opposite of performance marketing. A brand marketing is a distinct tactic from direct response, but they’re both performance marketing. They, there’s no such thing as like non performing marketing because you wouldn’t hire someone to do that, right? So I think if you’re doing brand, you’ve got to understand what you’re actually trying to achieve and what you’re trying to achieve is that if you have a digital product, the next time someone sees an ad for it, they click on it, or they’re more likely to click on it than they would have been if they hadn’t seen your brand at the brand ad should create this sort of like ambient pool of recognition in the user’s brain so that, hey, I remember I remember seeing an ad for that product that looks pretty cool. I remember I remember thinking when I saw the ad for that product, I should check it out. I didn’t go to the App Store and download it because I’m busy and I got stuff going on. But now that I see the added, I can just very easily access that product by clicking on it. I’m really happy that I did right. It should the brand marketing should elevate the performance of the direct response. Right and what worries me in this environment is you get a lot of people that come from like big brand agencies or they come from big brands and they don’t they’d never worked on digital products. Right they work for brands. They work for CPG brands. Right and so they don’t really grok that sort of, you know, fundamental difference between I’m trying to sell a brand that you’re going to see in a shopping environment. When I go to the grocery store and I’m primed to buy stuff like I’ve built that association in the user’s brain, so I don’t have to follow up with showing them an ad because they’re going to go to the grocery store, they’re going to go to Best Buy or whatever, and they’re going to Amazon and they’re going to see my thing. But if you are an app, the idea that someone’s going to see your product without prompting them first with an ad is insane. No one goes to the App Store and just browses around. You go to Barnes Noble and you browse around. You go to Amazon and you browse around. You don’t do that with the App Store. You don’t go to the App Store. You only go to the App Store. After you’ve put an ad, right? And so that brand thinking just sort of poisons them, this sort of marketing mentality at these companies. And the problem is it’s almost like it’s a non falsifiable. A brand person comes in and say, I know we’re going to do all this. Brand name is good TV. We do on the radio. We don’t need it. We don’t need a model because well, well, it’s just going to remind people it’s part of the go seek it out. As you know, they don’t that’s not a behavior on the App Store. It’s not a behavior on mobile. People don’t have to seek out stuff on the App Store. They know they don’t open the App Store on a day to day basis. No one just opens the App Store. Let’s see what for sale today? Not in the same way you do when you go to the grocery store. Right and so but the thing is like that magical thinking is so intoxicating to CEOs because what choice do they have? It’s like, well, we don’t want to do the hard work of building a media mix model. We don’t want to do the hard work of hiring five analysts and and four other experts and tying this all together with, like, you know, a statistical foundation, this guy says. As we can grow our audience by running on TV. I can brag to my friends that my company is on TV right now. Isn’t that cooler than having this team of people that speak a totally different language to me running kind of, you know, running sort of independently. So I just I worry when we come into an environment that, like a lot of people are going to be, I don’t say duped, but it’s just going to be like the brand idea is going be way more appealing than it was. Right and so I’ll counter this, because I can already hear people in the audience saying, no, that’s not true, Eric. People do search. The answer. But I think what you’re trying to say is that at scale, people aren’t browsing the App Store. And I see that when my apps have been featured in the last few years, it’s nothing like it was in 2010, 2011, 2012, where people really were going to the App Store like, hey, let me see what’s new. People still are, but not at the kind of scale that’s meaningful enough to build a business around. Similarly, and this is advice Thomas and I both give to anybody who asks is that, you know, when you’re first starting our App Store search ads are some of the best paid marketing that you can do. And so I want to try and fully answer this question can piedad still work for small startups? So part of my answer would be start with AP store search ads, because there is really high intent when somebody does actually open the App Store and search, you know, whether app or, you know, get fit or whatever. But to Eric’s point, that doesn’t scale like that happens, but it happens at a much smaller scale. You can’t buy your way to a large app with App Store search ads. It’s a great channel for however much you can scale it up to, but it’s just not going to scale big. So any other advice, Eric, as we wrap up the answer to this question of how smaller apps should be thinking about making paid marketing work instead of just trying to define organic channels or just trying to get the name out there. Well one, one thing I point out that. Yeah, so there’s some people do search, right? Some people do open up the App Store and they search. Right, of course. But there’s a fixed volume of that search. Right that doesn’t really grow over time. Right what, what? So that’s not a scale channel like you can saturate that and then what. Right and the thing is like when I see scaled company spending, let’s say, I don’t know, 2 million plus a month App Store search is like two, 2% to 5% ad spend. It doesn’t scale it. It only shrinks as you grow the as you grow the spend because there’s a fixed number of people searching every day. Right you can’t grow that right. But yeah, I mean, I think yeah, I would just like I would really hammer on this idea of I would push, I would try, I would try to be pushing people to the web and capturing as much data as I can. Right? not just like first party, you know, identifiers, right? Like the email or whatever, but trying to catch as much intent from the user as possible. What do they want to get out of your app? Right because if you can in anything you can do to sort of like and you have way more, you know, way more opportunity to sort of personalize the experience on the web than you do on the app. Right? because if you want to personalize appearance on the app, you got to develop all of that it’s in. And if you want to do any sort of personalization, it’s a lot of work. You got to update the app every time you want to change something. For the most part, with the web, it’s super easy to make a change to a website, right? And so you just have a lot more flexibility there. And I think it’s just a way better way to empower people to and then to capture those really, really high intent users and then drive them to the app. Yeah, that makes a lot of sense. Thomas this next one is for you, and I’m actually really curious about your answer here for deficit run one Facebook ad, is it worth investing in an mp? And then I’ll expand on that answer kind of where do you see MMP slotting in currently in kind of the growth stack, you know, from a smaller app to a medium size up to a larger app. At what point do you think slotting in an MMP and what level of sophistication of ad spend do you need that kind of tool? Yeah I won’t be as radical as Eric. Like, in some case, it does make sense to have one. And I’m pretty sure actually most APS Eric work. We still have an MMP, so there must be a reason they’re paying them. Bill but I guess when you, when you’re just barely starting like putting a name in is not the first thing you need to do, basically because you can operate the basic networks without one episode shots as a, as its on attribution that you can build a Facebook, you can go with just setting up your events through the SDK and/or for scan Google you can just with Firebase all of this is free and it’s not very complex technically to build. You’re not going to take months to build then influencers, you’re just going to extrapolate the results. So I guess you can survive for actually a little while at the beginning. Then comes a time where I believe like the MMB still makes a lot of sense because then you expand to network where they do operate probabilistic event attribution, which is helpful because you may find the value formed read and also because on the Web2 upside, actually, it is extremely helpful to have that done. I mean, you can build your own, but I don’t know a lot of people who do that just rely on the MMB to do that. And it makes a lot of sense. It’s technically legit or at least tolerated under a treaty because it’s your own media user is on your website, so you’re crossing you on that out towards the AMP. And in here you need a lot of you want the granularity of that users coming from that flow or that flow or that campaign. And so on, because then you can inject those YouTubes into the app. So at that point, it does make a lot of sense in the very, very early phase, unless you make a strong bet from the get go on the web and maybe you build yours, it doesn’t make sense to have it. But it’s true that historically I would have put on MMP much earlier, two, three, four years ago than I would do now. There’s still a moment that I wanted at the moment because there’s so many holes in this network and especially there’s nothing for Web2 app, which I think is, is, is a big problem. So a lot of people have the MMB and for what do app for Android for probabilistic printing and in some case also for the double opt in if you have a 80. So there’s still a number of reason to have it. But if you’re just starting, it’s not necessarily the first thing you need to do. Yeah and to piggyback on that, because you actually already started talking about it. And this was actually a topic on Eric’s prediction as well. The question from Usman, some platforms developed probabilistic measurement models. What do you think about probabilistic models? Is it reliable for 2022 or is it still an early stage? So Eric, you have a lot of thoughts on this. Give us the give us a two to three minute answer on probabilistic measurement in the future of it. Well, what did I say? I mean, I don’t think I said you don’t need an MP at all, right? I mean, I think you need one, right? I mean, you know, you’re going to be delivering an Android. You need one. So I wouldn’t advocate for not getting an MP. Just want to be clear. Yeah, probably. Yeah so no progress measurement? Yes fingerprinting? No right. The problem is Apple doesn’t say what fingerprinting is. And so they have a piece ran with it. Right what I don’t think is going to be viable is what’s happening now. When I think about probabilistic measurement, it’s really like probabilistic, not a fingerprint where you can say, well, it’s probably this person because the fingerprints match. Right? that’s what probabilistic attribution looks. All right. Now, it’s not, you know, using actual probability models, which is probably what that’s the more forward, you know, forward looking like future proofed solution. I think the way that fingerprint is being done right now is going to be shut down. My my I have let’s say I’ll call it AI have 60 I have 60% sort of certainty that Apple is going to restrict the access from apps IP addresses with the next major release of iOS. And so, you know, by the end of the year, it won’t work. So, I mean, make hay while the sun shining face, then just go ahead and use the probabilistic well. Well, while it’s still fairly accurate. Well, you don’t have much choice, but that’s a problem. It’s not that accurate. You know, it ends up cannibalizing a lot of organics. Right and so, yeah, do it. Do it and rely on these ad networks that are relying on the maps for that. I mean, it’ll help you grow, but understand that it’s not future proofed. Yeah all right. Moving on. Actually, Thomas, I’d love to get your perspective on this one. And Eric, of course, you can jump in. I’ll try and give you opportunity to respond, because that was an important clarification on that map. But the next question is, how do you suggest testing pricing rigorously? So know, Eric, you talked about that earlier, but I wanted to start with Thomas’s thinking on how do you price tests right now? The first thing I’d say about that is I think there’s way too many people who test this, like try to AB tested way too early when they don’t have the code that is required. And those tests, it kind of looks simple to prove like, OK, I put a monster here year to here or I put $50 a year and $100 a year there. So is this to screw up in design that’s so easy to screw up in analysis, but let’s admit you do it right. There are tools that are popping up or maybe you’ve got experience with that and you can do it is by no means as easy as it seems. I’m working on that with a team that has like six people only on this, and they still screw up once in a while, you know, and it’s nice, but let’s say you has that. I mean, the amount of data you need to have relevant results that have statistically significant results is kind of big. I mean, I think I think at the moment we’re taking roughly 400 pairs at the first renewals, which means like a massive amount of users, like dozens of thousands of users. And there are a lot of people who tried to test way too early. My my answer here is in the if you’re in this case, don’t take the test. Make radical choice. Go for it. And if it does make a huge difference up and down, you’ll end up seeing it just because you have to release and move on. You don’t have the luxury to go into the rabbit hole of this testing. And there are so many things you can test in terms of the price, the layout, how many options. The free trial is. It’s seven days. Is it 14 days? Like, it’s just never ends. So you have to take like extremely radical choice. And I think way too many people just. There is definitely benefits to get there. And you can, at the beginning unlock 20, 20, 30% off you just because you change your paywall. But after you iterate it a little bit on that, you realize that the gains, they’re incremental, but they’re like two, 3% They hard to measure. And you realize that it’s more of a whole change of experience that makes the next step doing incremental and take big leaps into, OK, maybe I put the paywall as the first screen and at the end of the onboarding or not at all, or choices of how much freemium and premium are you giving is a much better question than should I price $50 a year or $70 a year? Like the way you think through your strategy about what paywall is going to churn people more or less at the same time. And it needs to be linked to typically, do I have a strong network effect I’m Strava or I’m all trails or commute. I have strong network effect. You don’t want these plus 10% people that are actually churning people because you depend on the activity of the rest of the user to bring more. And that’s why you’re seeing apps that have very, very little network effect, having extremely strong, aggressive paywalls, especially in the fitness space, because they don’t have any of this network effect. And I think it’s much, especially early on, it’s much healthier to think about where you put the cursor and the strategy of freemium premium that which read the hell out of your paywall. I’m not saying there are not huge benefit there, but but I’m saying people are you should be testing too early and too early and to small details test if you go and want to test. OK, go for it. But do you think like not small things. So Eric, one of the things I’ve learned from you is just how different, different cohorts that you bring into an app are going to perform. So for a small app that does some price testing early on makes a big change. Like Thomas was saying, they go from $20 to 40 and they see an amazing improvement. But most of their traffic is coming from organic search. It’s a smaller cohort as they grow and start doing ads. That price that was like exactly dialed in for that early traffic might not actually be the optimal price for the traffic that they’re buying as they grow. Yeah What are your thoughts on price testing and then potentially how you evolve that over time and retest some of your early assumptions as you expand your marketing channels? Yeah, I mean, I think the smaller the scale, the larger, you know, the effect sizes you should be testing for, right? So it’s like and I think there’s two things to test. It’s not just the price point, it’s the duration of the subscription. Right you know, because. Can play a big part right in renewal. Right so, you know, if you got a yearly subscription. As the price should be bigger than if it’s a quarterly or monthly. You know, but you got to have those things in a way that gives you valid, you know, sort of data. Right? you know, statistically valid data, a statistically valid results, actionable results. And so they just start big and move smaller as a scale grows, right. So, you know, at 10,000, you you’re probably looking at yearly versus quarterly or something with like this big price difference is that as you’re at $100,000 due, then your sub, you know, you’re testing within that yearly package, you’re testing within that monthly package or whatever different price points. And then as you’re at a million, yeah, you, you can test kind of everything. But I mean at some point we especially with pricing, you can’t test forever. It’s not just something that you always live on. You should be looking to make a decision, but you know, you get more sort of ability to go granular with more scale. And so I would just be thinking about at first like, OK, I’m going to test just different durations and maybe even keep the price the same, right? You know, just to see which one people and which one improves conversions the best and start there. But like you can get more granular as you get more scale because you’ll get more users into each group and you’ll, you’ll, you’ll have this more likely using statistically valid results. Yeah that’s fantastic advice. I’m going to I’m going to skip a few. So so it’s 1202. The event was, you know, technically supposed to be over 2 minutes ago. Eric, if you need to bounce Thomas’s unit bounces, feel free to just drop off when you need to. But I did want to try and answer a few more questions. And this one I thought was particularly interesting because I just hear it come up over and over and over again. And it’s from AK. Any thoughts on affiliate marketing for utility apps? Which network to go with? What to expect? So, Thomas, let’s kick it off with you. I mean, you hear it all the time, you know, how do I do referrals? You know, are referrals going to work? What is affiliate marketing, something that’s a viable strategy to bootstrap? It feels like everybody’s asking these kind of questions. So what are your thoughts? To some extent, if a referral can work when it’s between from your users. But in terms of affiliate, I’ve seen some people being successful on the web in the App World. What I’ve seen is just like the amount of fraudulent traffic and nightmare you’ll have to manage. It’s just never worth it. I can’t think of a single app that is small or medium that actually has a significant share of traffic coming from affiliate or even small. I mean, it’s kind of weird that it never happened, but and there are companies out there, I’m not saying they’re all scams. It’s just they are trying to do also the fight against it. But it’s just everyone I know who tried as just drop that ball on mobile is just. Just a nightmare. Yeah yeah, it’s. The way I’ve come to think about it more and more is that. For the companies that do it and do it well, it can be incredibly successful. But as with almost anything, it’s hard to do right. And so if you’re going to spend the time and effort to build out the tools to invest in the strategy, to find the affiliates, are there potentially lower hanging fruit where you’re going to get a better return for your investment of time and money? And from what I’ve seen and as you said, there just aren’t great examples of it working and like really blowing an app up. I mean, yeah, you have the areas with like referral marketing where, where you have a $20 or you get $20 free. If you’re for a friend and they get $20 free, it’s like, yeah, those things work. But they, but it’s also like they work at Uber scale and so, so yeah, I mean personally I think there’s, there’s often for most apps, there’s just better places to spend your time and money, especially early on in the app journey. Yeah, that’s what, that’s also my point. But I’ll make a correction because I just remember now that the question was specifically for, for building an app. Yeah And in that space, in some case it might make sense, but I wouldn’t go and look for what other mobile affiliate network. What I would look at is how do non-mobile productivity tools use affiliate something like I don’t know abysmal where your discount 80% temporarily or something and just promoted there even though it’s not made for an app. I was just use the mechanics that work for professional tools that are not apps and just go for it instead of looking for general, a mobile affiliate networks and then try to plug there. So they still may, in the case of productivity apps, be some particular cases that absolutely make sense. But for most of the other verticals I would rather stay with and work on other tactics that seems to be more efficient for many people. They’re always exception is just in most cases. I do that. Yep all right. Here’s here’s a super technical question for you. Just Facebook APM helps in more signal to Facebook. I increase conversion. Have you been experimenting with am lately? And so am is made for when you send a traffic from the web, if I’m correct. Without question, I. I don’t know anything about any of that. That’s why I was deferring to you. If I. If I’m correct, that’s not specific. OK all right. Well, let’s continue the question. Let’s skip that one, then, Omer. Sorry about that, Omer. If you want to bring me in private after I rephrase the question and think about it. All right. We should probably start wrapping up. Let me see if I can hit a few of these fast. What’s the average churn you’re seeing for paying users after month, one month to four utility apps? Part two. Any recent learnings from testing you may have done to reduce churn on trial paying users early on? So I’ll defer the answer on the first one. So revenue cap, we just hired a data scientist and I am beyond myself excited to finally, after two years of being a revenue cat, start doing some benchmarking posts. So no promises on when or exactly how detailed they will be. Our data scientist is also working on other things. And I can’t steal all his time away from our product team immediately, but we will be posting much more of this kind of thing to the blog and maybe even doing some events around kind of understanding, benchmarking and stuff. So I’m going to defer that question. But I think the second question is really interesting for you, Thomas. Any recent learnings from testing you may have done to reduce churn of trial and paying users early on? Actually, I think the two question, they are linked. You know, when you take one step in isolation, it’s hard like to understand what’s happening overall. And typically here, let’s say you’ve got an extremely high churn just after the payments or the first renewal is extremely low. And much smaller, whatever the benchmark is, maybe it’s because you forced too many people into the payment in the first place. So the first thing you you’re like not the first thing, but one thing I would look for is actually how aggressive. I’ve been before, like what kind of traffic I pushed onto that step because maybe there’s very little to do, like because the traffic composition and experience they had was so bad that you had to anticipate it. And very often to improve a step, you need to go through the step before. One example that was kind of interesting last year and a bunch of companies have adopted is what we call the Blinkist paywall, where basically you tell people you’re going to notify them of the end of the free trial to try to improve the free trial to payment conversion. And I think here, once you add that step at the conversion step, the biggest driver between first payment and first renewal is pushing people to use at least six times the app. Or I’ve done what I call activities. Whatever your app is, it’s meditation that they completed through meditation. If it’s a workout that they completed through workouts, if your photo editor that they shared three edited photo or something, and you really need to push hard on that to improve payment rate. And if your app is good enough, like because usually people churn because they don’t use it. So it’s a lot of. Onboarding improvement. So that people would actually realize these activities and habit forming and at some point push notification as well. If you see somebody has completed two of them but is not coming back and you know that the regular paces twice a week, you have to wind them back once they’re still there. Typically, if they still open the app and don’t complete the action, move through a message or remove some feature or be a lot more explicit about. Way too many times I see like apps that have many, many feature and people ask, hey, why don’t they complete that one? That is the main one. It’s because they’re distracted. Like maybe it’s something simpler that drives people to do that action that is driving retention, which in turn is driving renewal. So maybe simplify a little bit the app experience itself in app messages like dynamic in-app messages are very efficient and eventually if they’re already off the app, a push notification would be a main driver. But I guess my answer here is you’re not going to convince people not to churn if they stop using the app. So that’s the only way. Yeah well, I don’t have much to add there. So there’s one question here that I’ll take, because I think this is a really fun question and something I think a lot about. How viable is it really for solo app developers to earn a living in 2022 on the app store? I’ve heard apps are dead, et cetera which of course, is not true, but still it seems difficult to make a living off it with such a crowded app market. I guess I need to learn marketing. So that’s a fantastic question. And my answer is that, in some ways, it’s easier in 2022 to make a living off of apps, and it ever has been. But there are a few key points to make around this. One is that I am not just saying this because I’m a revenue cat, but I really do think that the subscription model has opened up the opportunity for smaller niche apps to make enough money to make a living off. But that’s kind of the key number one is that. What you need to do is like don’t go out and try to be the next headspace. If if your goal is to be the next headspace, that’s just a you’re building a different product. You need to start with some level of funding because yes, you know, competing and growing is going to be brutally hard. But if you’re a developer and you want to make a go at being an indie developer and making a good living on the app store, instead go the opposite direction, go really, really niche. But in a niche that people are willing to spend money. And that people find valuable. And we’ve talked about this on the sub club podcast quite a bit if you haven’t seen that sub club. Fish brain, we had the CMO on recently and you know, they’re actually a huge app. So this is not even a solo developer kind of stuff. But the fishing hobby people spend thousands, tens of thousands of dollars on boats and trips and other stuff. So if you’re a solo developer looking to make a living right now, go find a niche one where people are going to find it valuable enough to spend money and then to where there is some form where you understand how you’re going to get attention for it. Don’t, don’t go build an app and have this. If I build it, they will come kind of mentality. You need some level of built in marketing. So I think knitting apps is a really interesting example. There’s three or four good ones and there’s one from this solar developer, Becky, who I, you know, I don’t think is making a living from it yet or anything. But it’s a really interesting niche where if you can deliver enough value. And if you can embed yourself in a knitting community and you know, if you’re part of a really big Reddit forum where you’re not pitching your app, but, you know, you’re asking for feedback or other things that you can find a community, a niche that has some level of built in marketing, that people are going to get excited about it, they’re going to share it on their knitting YouTube channel, they’re going to share it on Reddit. They’re going to tweet about it because you’re just bringing so much value to this little tiny niche that’s just underserved. If you’re going to make a go at being a successful indie in 2022, I think that’s the approach. And yes, you absolutely need to learn marketing and think about marketing from the very beginning. It’s that you have to know how your app is going to get attention before you go build it. I mean, you know, you can throw things against the wall and hope they’re going to stick. But if you’re going to spend six months building an app, you need to spend a month doing some market research, really thinking about how you’re going to get attention, really kind of, you know, validating some of the ideas that people actually care, that people are actually willing to spend money for it. So with that, I think that’s a pretty good summary. Any, any, any follow up there, thomas? Yeah, no. I also believe there’s still lots of opportunity and I’d say almost, almost even more like because the big space that they can buy big guys and it’s not done. But yeah, you’re not going to move its base and come it goes more niche Manish and Manish but then this impact company, they won’t have the skill to make that niche go to the vertical, which opened up space for maybe not solo people company but small small teams to actually make a really good living out of it. I think there’s so many unexplored of these, of this niche that we haven’t think of and it’s kind of exciting. But then when we said, if you think about marketing, probably that marketing is not going to send all your money to Facebook. You’re going to have to be a bit more creative because that niche as a particular community that goes with it and this is where you’re going to look for it, it’s not going to be as simple as, OK, I’m just going to put Mad Money on Facebook and it’s going to come back because the more it goes and the more Facebook and Google works for the bigger guys. So you’re going to have to go specifically to your niche, to go to your community and be super active on that. Reddit is on that subreddit or be inside and I don’t know, recruit the one influencer of that niche and have him as an ambassador or something. You’re going to basically have to embed yourself into the community of that niche, which is a very different kind of marketing to just putting hundreds grand on Facebook and see if 200 grams are coming back. Yeah, I think for these niche apps, marketing means two totally different things that it does for the bigger guys. Absolutely so we do need to wrap up, but we can’t leave Andy carville’s answer our question just sitting there. And he’s a good friend. So, Thomas, I’ll let you take this one. Which apps do you see doing really innovative stuff when it comes? Subscriptions either in terms of paywalls, bundling, pricing or something else. Well one up that you mentioned so it comes to mind that is it very interesting for me is fish brain because they’re having this subscription model but that’s just one part. I mean first because their community they can’t push a paywall too hard, otherwise they’re going to turn a free user and they need the network effects. So they can go to hard core, but they complemented it with other business model. That makes a lot of sense for them. And of course, if you’re an angler, you’re going to need some material, some hardware at some point. So I think for them it’s like extremely natural to go towards hybrid model and I see going towards hybrid model. So in their case it’s subscription and e-commerce, but it can be other things can be subscription and add is going to be subscription and nonrenewable it’s going to be subscription and offline revenue, maybe your Amazon affiliate or whatever. And I see this as extremely interesting and relatively under tapped at the moment. Like most subscription app that I have subscription, that’s it. That’s what we do and they don’t go a lot beyond that. I think we’re going to see a lot more of these examples. So fishbone is one I mentioned and a couple of others on, on my post into on the revenue cap blog. Another one was a fitness app sweat that has bring this as build kind of this brand around their leader. And so they can sell branded goods around it. And of course you can put a totally different market. One, you already have the audience hooked and convinced towards a brand that you would sell a random object. So basically my answer here is I’m seeing relatively little motivation in terms of it’s not how you design your paywall or the pricing or you made that trick, plus you have the tools that Apple gives you and there are ways to, to, to bring them creatively. But it’s mostly for me complementing subscription with other models that is the most innovative. Well, I think that’s a great, great way to wrap up. We talked about from the smallest types of, you know, how do you potentially make you go in 2022 to don’t think you’re going to make a lot of money on merch as a small app for the larger apps are finding a lot of innovation in diversifying. So Yeah if you’re a small app don’t have six tiers of subscription and nonrenewable goes in and all this kind of stuff. But as apps grow, there are opportunities to really diversify revenue. I do think that’s something we’re going to see a lot of in 2022 is experimentation, diversification and innovation in broadening the monetization beyond just that nine $99 a month subscription. So yet with that wrap it up. Thank you Thomas. Eric has already left but I really appreciate him joining us today. So and Thank you guys for participating and for asking so many fantastic questions. And sorry we were able to get to all the questions. We did almost go in an hour and a half, but we’re going to be doing more of these sorts of things here at revenue cat. So keep an eye out on your email for future events. Thank you.

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