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
• Sub Club

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.

On the podcast: How to find success with web2app, the value (and challenges) of “owning the transaction”, and why avoiding app store fees isn’t a great reason to experiment with web2app, but might work out anyway.

Key Takeaways:

💰 There’s much more to web2app than avoiding app store fees - In fact, looking at app store fees alone disregards the benefits of going via the app store, such as a substantially better conversion rate. Even if web acquisition is cheaper, those users are not worth the same to your business.

🔍 Better advantages of web2app to focus on include… Greater flexibility with attribution, access to new audiences (via organic and paid), and support for B2B use cases, among others.

💼 Use web2app for B2B billing - IAPs lack an elegant solution for B2B billing, whether it’s making it easy for individuals to expense purchases or offering teams a simple way to manage group billing.

🎯 Web2App allows for greater customization of user journeys - To fully capitalize on web funnels, tailor user journeys based on their entry point — for instance, a user coming from a branded Google search shouldn’t see the same journey as one coming from TikTok.

📈 Web2App is crucial for scaling up advertising - When ad campaigns plateau, running both web and app campaigns in parallel helps reach new audiences and convert users who might not engage with app install ads alone. This approach allows for better targeting and expands your overall reach.

About Guest:

👨‍💻Independent subscription app growth consultant.

💸Thomas has worked with hundreds of clients and helped manage tens of millions of dollars in ad spend.

👋LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Highlights:

[1:48] Web2App: The advantages of capturing users on the web before sending them to your app.

[6:51] One size doesn’t fit all: To reap the benefits of web2app, don’t just create one user experience on the web.

[11:30] Catch-22: The trade-offs of owning your customer transactions on the web versus paying app store fees.

[27:21] Learn by example: Who’s doing web2app well — and why it works for them.

[37:45] To B2B or not to B2B: How web2app helps B2B apps overcome the team billing and expensing challenges of in-app purchases.

[41:55] Owning it: Owning your transactions on the web can be a great way to reduce churn.

[44:34] World wide(er) web: Break through marketing plateaus by running both web and app ad campaigns in parallel.

[53:52] Cross-platformer: A web2app flow can help you go beyond the App Store and Google Play (to Roku, Apple TV, or the Amazon Appstore) to reach a wider audience.

On the podcast: Implementing effective offline marketing campaigns for acquiring, engaging, and retaining paid subscribers in the app space.

Key Takeaways:

📢 Look beyond digital channels for app growth. Consider offline advertising channels such as radio, linear TV, and podcasts to reach untapped demographics. These channels can help you target non-digital audiences, particularly older, higher-income users who can be more lucrative for subscription-based apps.

🔄 Use diverse methods to measure offline marketing. Utilize a variety of attribution methods, including how-did-you-hear-about-us surveys, incrementality tests, and media mix modeling (MMM) to assess the effectiveness of offline channels. Accept the inherent ambiguity in measurement and use multiple data points to guide your strategy.

🎯 Embrace customer-centered metrics for better retention. Focus on creating proprietary metrics that align with your users’ goals rather than relying on standard industry metrics like daily active users. Babbel’s "learner success" metric prioritizes user progress and satisfaction, leading to higher retention rates.

🔍 Rethink freemium models to boost engagement and conversions. Freemium isn't always the best choice. Consider a hard paywall to increase user commitment and filter out less-engaged users. It’s about quality over quantity — attracting users who truly value your app.

🌐 Optimize both web and app experiences for user journeys. Users often start on the web before downloading your app. Ensure seamless transitions between platforms to improve user experience and conversion rates. Informative web experiences can ease app adoption.

About Guest

👨‍💻 SVP of Growth at Babbel.

📢 Steven and his team have taken a non-traditional approach to marketing Babbel: leveraging offline advertising channels like radio and TV, measuring the success of marketing efforts through a proprietary model, and tracking metrics like learner success instead of monthly active users.

👋 LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Highlights

[0:44] There’s (more than) an app for that: Potential users aren’t just on the app stores, so shouldn’t your marketing campaigns be everywhere too?

[3:54] Radio star: How and why Babbel buys radio spots to advertise their subscription app.

[7:43] Attribution remix: Measuring the success of offline ads can be a challenge and requires a blend of data analysis methods (like user surveys, incrementality tests, and media mix modeling).

[13:57] Freemium isn’t free: Why Babbel rejects the freemium model in favor of a hard paywall.

[18:15] The measure of success: Is Monthly Active Users (MAU) really a good metric to optimize for? (For some mission-driven companies like Babbel, no.)

[18:46] You get what you pay for: Paid subscriptions — especially premium tiers — often see higher levels of user engagement and retention.

[21:43] Web slinger: An optimized web experience can boost app downloads and paid conversions.

On the podcast: How to make better decisions with data, the many pitfalls of collecting and interpreting data, and why the best executive dashboard is probably a hand-written weekly email.

Key Takeaways:
📝Balance data collection with business goals. Collecting all possible data can drown teams in noise and lead to compliance risks. Focus on collecting semantically important data that aligns with business goals and use cases to avoid unnecessary complexity and costs.

💡Prevent exponential cost increases by structuring data early. Establishing a well-structured data collection and management process early on prevents costly modifications and adjustments later. Early alignment and thoughtful planning are crucial.

🔒 Maintain control over data collection to simplify compliance. Managing your own data collection processes can reduce legal and compliance challenges associated with third-party data processors. This is especially crucial for adhering to regulations like GDPR.

🔧Opt for off-the-shelf data solutions early on. Leveraging open-source or ready-made solutions can save time and resources. Maintain a clear evaluation structure for transitioning to custom solutions when needed, and accept changes in data collection methods to avoid outdated systems.

📊Simplified insights over complex dashboards. Dashboards can overwhelm executives with too much data. Instead, providing a succinct, focused summary of key insights through something as simple as a weekly email can be more effective for decision-making.

About Guest

📈 Director of Data Products at News Corp.

💡With over 15 years of experience, Taylor is an expert in building and implementing effective data collection and analytics strategies — helping organizations like Disney+, Business Insider, and Deloitte collect the right data and turn it into actionable insights.

👋 LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Highlights

[3:44] Laying a foundation: Data collection is a lot like constructing a building — setting up the right framework from the beginning can save you a lot of time, effort, and money later.

[7:30] The Goldilocks zone: Collecting either too much or too little data is costly and can potentially have ramifications for data regulation and privacy laws.

[16:58] Information overload: Data is only helpful if you derive actionable information from it.

[20:33] Distilling data: What is a “data product” team? (And why might you need one?)

[26:13] Build vs. buy: Most companies should start with an off-the-shelf data collection solution instead of building something internally — then consider a switch later when the scale and financials make sense.

[33:45] What’s in a name? What you call specific data points and even your data collection system can be very important.

[42:11] Ditch the dashboard: Fancy data analytics dashboards need to be interpreted to be valuable — and without context, they can be misleading.

[51:27] Trix are for… kids?: How Taylor’s experience promoting the television show “Bluey” on Disney+ illustrates the incredible power of data analytics.

On the podcast: How Mojo grew to over $1M in MRR, the most impactful pricing and paywall experiments, and why it’s important to choose complexity instead of just letting it happen.

Key Takeaways:

💪Bravery to pivot leads to long-term success. Early popularity can be deceiving. Without strong retention, it's time to pivot. Build features users love to evolve from a gimmick to a sustainable business.

🧱Make your paywall more prominent. Show your paywall during onboarding. Then, iterate on messaging, design, and pricing, focusing on one element at a time.

💲Pricing will always annoy someone. If no one complains, you’re underpricing. Be strategic about who you upset and how many people.

🤝Viral loops reduce the need for ads. Heavy ad spend can hide a lack of product-market fit. Build sharing and virality into your app first, then consider paid acquisition.

📈Choose complexity based on impact. Focus on your team’s strengths. Growth can be product-led or through, for example, paid acquisition, depending on what suits your team and app best.

About Guest

👨‍💻 CEO and co-founder of the video editing app Mojo.

🎬 Former GoPro employee and graduate of the Y Combinator accelerator program, Francescu and his team have built one of the top mobile apps for creating and editing social video content.

👋 LinkedIn

Resources

• Connect with Francescu on X: https://x.com/Francescu
• More about Mojo: https://mojo-app.com
• Paul Graham’s essay “How To Do Great Work”: https://paulgraham.com/greatwork.html

Follow us on X:

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

Episode Highlights

[4:27] AI + Mobile = ❤️: Why AI is probably the next mobile revolution.

[6:16] Going Pro: How Francescu got his start building mobile subscription apps.

[7:44] Pivot… PIVOT: Despite early success with their augmented reality app, Francescu and his team had to shut it down and pivot to a new idea.

[15:12] Pricing and paywalls and packaging, oh my: Why you need to show your paywall during onboarding (and other monetization lessons Francescu learned building Mojo).

[27:42] Viral moments: Building social sharing features into your app could save you time and money on user acquisition.

[36:19] The product-led growth trap: Developing new product features isn’t always the key to growth.

[41:15] Priced to annoy: If no one is mad about the cost of your app, your prices are probably too low.

On the podcast: Quitting a job to build your own apps, returning to that job after failing to gain traction, and the inflection point that allowed our guest to finally quit for good.

Key Takeaways:

💡If your first side project doesn’t take off, try again — Reviving a lackluster launch can be tempting, but it might indicate a lack of demand. Instead, start fresh with a new idea and watch for early signs of product-market fit.

💰Invest more in your product once you have “pull” and a channel — Achieving early product-market fit and having a reliable acquisition channel allows you to focus on enhancing your product and experimenting with monetization strategies.

🔞Avoid relying solely on one acquisition channel — While a dependable early channel like ASO is crucial, it comes with risks outside your control. Diversify by investing in owned or paid channels to adapt to changes more effectively.

🧑‍💻Building in public offers numerous advantages — Developing your app publicly immerses you in a supportive community of indie developers, providing motivation, inspiration, and valuable feedback. However, it can also attract copycat competitors.

📈"Test higher prices" should be at the top of your to-do list — Raising your app’s price may seem risky, but many indie developers are overly cautious. A/B testing can help you safely explore the impact of different price points without significant customer backlash.

About Guest

👨‍💻 Independent app developer and creator of HabitKit and Liftbear.

💡Sebastian began his career as a corporate web developer and became a full-time indie app developer after his habit-tracking app HabitKit took off.

👋 LinkedIn

Follow us on X:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Highlights

[1:04] Web versus mobile: What motivated Sebastian to switch from web to mobile app development.

[4:17] Free solo: Having a corporate day job might not let you stretch your creative muscles as much as building your own concepts.

[6:43] Drive: If you’re going to build an indie app or venture-backed startup, make sure it’s something you need to do.

[12:13] Risky business: The riskiness of leaving a full-time job to pursue an indie venture is different for everyone, depending on life stage, finances, and family obligations.

[16:39] Just ship it: Your first idea might not be great, but getting started will lead to new, better ideas.

[24:04] If at first you don’t succeed: Sometimes it’s better to give up on an idea that isn’t working so you can focus on one with better product-market fit.

[28:38] Doing the (side) hustle: Making the decision to keep your day job or fully commit to your side gig can be tough.

[34:45] Changing the channel: The app stores are a black box — it’s a good idea to invest in additional acquisition channels in case of algorithm changes.

[38:26] Building in public: Having a following on social media can be a great source of support and user loyalty outside of the app stores.

[45:00] Raising prices: Don’t be afraid to experiment with higher prices — many apps are leaving money on the table.