On the podcast: Our guest today is Eric Crowley, a tech investment banker with GP Bullhound where he provides transaction advice and capital to top companies in the Consumer Subscription Software space.

In this episode, we talk with Eric about the rebound of consumer subscription valuations and investor interest, how to generate Net Revenue Retention in consumer, and why you should pinpoint where your app sits on Maslow’s Hierarchy of Needs.

Key Takeaways:

📈 The subscription app industry is rebounding in 2024 - After setbacks in 2022 and 2023, surviving companies are now leaner, more focused, and showing strong profitability and retention. This resurgence is reflected in both private transactions and public valuations, signaling positive momentum.

💡 Net Revenue Retention (NRR) is achievable in consumer apps - Top-performing apps boost NRR by stabilizing churn and driving revenue growth through price increases, family plans, and premium features. The key is delivering ongoing value to loyal users while maintaining strong retention.

🎯 Maslow's Hierarchy of Subscription Needs offers a roadmap for retention - Successful apps align with user passions by addressing needs like safety (e.g., Life360) or self-actualization (e.g., Calm). Integrating features like leaderboards and community functions deepens user engagement and fosters long-term loyalty.

🛡 Platform threats like Apple's "Sherlocking" can be overcome with specialization - Apps that go deep in their verticals (e.g., Flo or AllTrails) offer premium, differentiated experiences that platform-native features can’t replicate. Innovation and specialization are key to thriving despite competition from OS-level features.

🚀 Flo’s success shows the power of retention and long-term engagement - Flo’s $200M raise and $1B+ valuation were driven by its freemium model and strong user retention across life stages. By building long-term relationships with users, Flo has positioned itself as a leader in the female health space.

About the Guest:

👨‍💻 Technology investment banker and partner at GP Bullhound.

💵 Eric is passionate about providing advice and capital to consumer subscription software (CSS) businesses.

👋 LinkedIn

Resources:

• GP Bullhound website
• 2024 Consumer Subscription Software (CSS) Report — GP Bullhound

Follow us on X:

• David Barnard - @drbarnard
• Jacob Eiting - @jeiting
• RevenueCat - @RevenueCat
• Sub Club - @SubClubHQ

Episode Highlights

[4:32] The Rule of 40: A good rule of thumb for correlating your business’s trading value with your growth rate and profitability.

[9:10] Rising tide: Successful app businesses like Flo are part of a recent wave of mergers and acquisitions in the CSS industry.

[15:39] Land and expand: How consumer subscription services are improving net revenue retention (NRR) with their existing users.

[23:15] Sherlocked: The threat of Apple and Google releasing new platform features that compete with niche subscription apps.

[31:52] Law and order: How app business owners and investors are thinking about new regulations like the Digital Markets Act (DMA).

[38:17] Going public: Why IPOs for CSS businesses have gone down since 2021.

[43:59] Alternate route: Exit and funding options other than IPO that CSS business owners can consider.

[48:41] Maslow's Hierarchy of Subscriptions: How to build subscription app features that meet fundamental human needs.

On the podcast: The benefits of building something you personally care about, how to balance user feedback with product intuition, and why process, frameworks, and outside advice are often worth ignoring.

Key Takeaways:

🚀 You don’t need complex processes to build a successful product

Building something meaningful doesn’t always require elaborate processes or formal business structures. With passion, a clear vision, and consistent execution, developers can create successful products without overcomplicating the journey.

🔄 A strong feedback loop with your community can drive product evolution

Engaging with an active user community creates a continuous feedback loop that helps developers iterate faster and build more relevant features. Listening to real users and balancing their input with your vision can transform a product into something that truly resonates.

📈 Pricing strategies require experimentation, not perfection

Initial pricing doesn’t need to be perfect. By experimenting with different price points over time, you can find a balance that works for your users. Significant price increases might not impact demand as much as you’d expect, giving you room to adjust and optimize without overthinking the starting point.

💡 Reactive development can lead to faster, more informed decisions

Acting quickly in response to persistent customer requests can help validate new features and insights faster. Instead of over-analyzing, shipping updates rapidly provides real-world feedback that guides better decision-making.

💸 Plan for risks when relying on third-party dependencies

Building heavily on a third-party API can expose you to unexpected changes in pricing or policies, potentially leading to unsustainable costs. Always evaluate the long-term stability and alignment of external platforms with your business goals to safeguard against disruption.

About Guest

👨‍💻 Indie iOS developer and creator of the Apollo for Reddit app.

📱In addition to Apollo, Christian is also the creator of Juno, Pixel Pals, and a burgeoning YouTube channel.

👋 LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• SubClub

Episode Highlights

[3:33] Origin story: Christian’s time at Apple and path to indie development.

[4:58] Positive feedback loop: How collecting user input from Reddit users helped shape Apollo.

[8:23] Go your own way: There’s no one-size-fits-all formula for creating a successful app.

[15:25] Passion project: Truly caring about what you’re building is one of the most important factors for success.

[26:48] Just say no: How to decline feature requests without alienating your users.

[30:10] Choose your own adventure: Understanding the venture-backed model versus indie development.

[36:30] End of the line: How and why Christian made the decision to shut down Apollo.

[47:40] Vision for the future: Christian’s post-Apollo projects: Juno, Pixel Pals, and YouTube.

On the podcast: The impact of Apple Search Ads on organic search, how to save money on brand defense, and why ROAS shouldn’t be the only thing you optimize for.

Key Takeaways:

📊 Optimizing brand keyword bids can protect traffic and reduce costs
Running ads on brand keywords helps protect your traffic from competitors. By experimenting with lower bids, you can often maintain visibility while reducing costs, ensuring that you capture valuable traffic efficiently.

💸 Long-term ROAS is key for subscription app growth
Subscription apps should focus on the lifetime value (LTV) of users rather than just immediate ROAS. A campaign that breaks even over 365 days, rather than in the first week, can still be highly profitable if it contributes to stacking valuable subscriber cohorts that generate long-term revenue.

🔄 Broad match keywords can uncover valuable, unexpected search terms
Using broad match in Apple Search Ads can help discover new, high-intent keywords that might not have been initially considered. Regularly reviewing search term reports allows you to identify and capitalize on these hidden opportunities, expanding your app’s reach effectively.

🌍 Emerging markets offer untapped Apple Search Ads potential
As Apple expands its App Store presence in new regions, testing campaigns in countries like Brazil can lead to unexpected gains. Often, these markets have less competition and lower CPAs, making them fertile ground for scaling your app’s user base efficiently.

🛠️ Custom product pages can enhance campaign performance by targeting specific user segments
Leveraging custom product pages in Apple Search Ads allows you to tailor the App Store experience to specific keywords or user segments. This strategy can improve conversion rates by aligning the app's messaging and visuals with the search intent, making it especially useful during seasonal promotions or for targeting niche audiences.

About Guest

👨‍💻 Data engineer and founder of Search Ads Optimization.

📢 Dilip helps app developers and marketers optimize their Apple Search Ads campaigns and increase their ROI using data-driven insights and automation.

👋 LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Highlights

[5:35] Everybody’s changing: Trends for Apple Search Ads in 2024.

[11:09] Running (brand) defense: Experimenting with lower bids to save money while maintaining the level of impressions you want.

[19:16] Widening the search: How to leverage exact match and broad match keywords in Apple Search Ads.

[29:46] ‘Tis the season: How different times of year and holidays can affect CPA and ROI for Apple Search Ads campaigns.

[35:05] Playing the long game: Why subscription app developers should think about long-term — not short-term — return on ad spend (ROAS).

[48:16] Tipping the scales: How to scale Apple Search Ads.

[55:11] Custom-fit: How to implement custom product pages in your Apple Search Ads strategy.