# How Life360 Thinks About Freemium vs. Hard Paywall (With 100M Users) Channel: Sub Club by RevenueCat Video: https://www.youtube.com/watch?v=08MBmONP89w Duration: 8 min Language: English Words: 1459 Transcript page: https://viewrankai.com/tools/youtube-transcript/08MBmONP89w --- [0:02] [music] Next thing I wanted to talk about is your take on fremium. And it's been such a hot topic lately. Uh we we've had guests on the podcast talking about it recently. And then you know in the state of subscription apps report we actually shared a number that blew a lot of people away myself included that hard paywall apps convert users at five times the rate of premium apps. And I think a lot of people in industry took that as a you know hard pay wall or die like that's the only way to grow as a subscription app and maybe that's true of like smaller apps [0:32] but that's obviously not true of an app at live 360 scale. So how do you think about premium? So fortunately it depends on on the type of app right there are you know some apps for which hard pay wall absolutely makes sense. You know apps where user have very high conviction they're not social they don't benefit from network effect etc etc. So that that makes a lot of sense right for us you know we not only we are a premium app but our free tier is extremely generous I will say that for most people it's good is great is good enough right in fact the reason number one why [1:06] people tell us they don't subscribe is because the the free tier is good enough and our philosophy is is that we want to do something about it but that something is not making the free tier worse is trying to provide more value early diversify the subscription offering, right? Why? There are a few reasons. One is well, our company mission, you know, we're really, you know, all about keeping [1:30] families safe and we have a lot of features that are SOS and, you know, crash detection, etc., etc. that are literally, you know, life-saving feature in some cases. And so, you know, making it, you know, accessible to everyone is a big part of why we exist really. But the second is you know we are an app that benefits from network effect in life 360 in solo mode is is not really useful or interesting right you need to invite your family invite your friends etc etc the number one way that people discover us is parents telling other parents you know about the app um and so you know [2:07] our thesis is that having a large free um engage a free user base around the world is actually one of the big modes And one of the uh big competitive advantages for us I will also say that you know we have an advertising business so netally there is also a business incentive for us to grow our free base but but it's really you know the more people in light 360 the more people invite more people the more people know about it the more features like the petfinder network or the tile um devices or other feature the safety feature we have in the app are useful you know the more density of users [2:42] and so you know for us it's all about that that say you know if you as I was saying before about 3% of our MAU uh are subscribers but on average about four people use a subscription so it's really more about 12% of MAU that benefit for subscription right which is I would say in line with with with a lot of a lot of subscription apps we are able to provide a good free experience a great free experience and for sure we could you know limit that and grow a subscriber base much faster but I think that we will pay for that down the line uh in slower growth and [3:18] becoming a less interesting product. Yeah. How do you think about that? Like how do you think about when to add friction to the free experience versus when to like you said just just only think about adding value? Well, yeah. So adding friction to the to the free experience we try not to naturally in some cases you have to for example we have a we have a pay wall in in on boarding right like like every other app. Sure, it does add, you know, one screen of friction, but not having that will aware of will cut off a significant amount of of the new subscribers, right? We have a a [3:54] um a feature uh that is uh location history where you can uh look uh at for the last, you know, two days for free users where people in your SQL were. Two days is, you know, more than enough for a lot of use cases. Uh usually people want to see where people were in the last day or so. uh we did some testing in the past if you cut it down to six hours or even 12 hours [4:17] like we double the amount of subscribers from the hook. So you know it will be a sizable win. Uh a lot of company will take that but but we haven't uh because it does make the features significantly less appealing for free users and it does make it less useful and in some cases it can make people less safe. So, we decided not to do it and uh you know, we paid for it on short-term bottom line, but we think it long term is going to be, you know, the right thing to do for a business. It's so hard to balance the short-term wins against a long-term strategy. Um, yeah, I mean I talked to the chief product officer at Duolingo about this [4:58] when I chatted with him earlier this year and they think along those same lines is that, you know, I think he he called it the premium trap is that you can easily juice numbers and, you know, hit your quarterly revenue by just locking more and more features behind the premium tier, but then you're really shooting yourself in the foot long term. But it's so hard to get that balance right. any advice you have on like you know how you think about how you differentiate you even even things like when you create a new feature what's the debate internally whether it's a premium feature or a free feature like how do you make those kind of decisions because it's so hard yeah [5:35] it's a very interesting one and it's actually something that we've been wrestling with because historically we had teams thinking about the free experience and team which are you know um the ones I work with a lot thinking more about to the paid experience. And uh that's actually not the right way um to look at this because uh in most cases we think that unless there is a reason and the reason is is usually cost for example we offer roadside assistance to our subscribers right we could not offer roadside assistance to our free users because you know every time they they call it we pay for the toe right and uh and so that's one where yes it's a paid feature and [6:17] I think nobody expect to get you know a roadside assistant for free right in some in other cases. We think that every feature should be premium. Meaning that uh every feature that provides value to a user should be great in the free version of the feature itself. And then it's up to us find value, find additional value, real value that we can provide as a premium, right? The challenge in most cases is thinking of the mume part of a premium not as an artificial gate. you know, say I give you two for free and then the rest is paid. Although some features that we have worked away, [6:55] but the the challenge that we we are wrestling most times is how do we make something free and then create a completely new experience, a completely new tier on top of that that is that that is worth paying for, right? And and so the part of this is getting teams that always always think about free to think about [7:15] both and vice versa, right? And uh it's an interesting you know debate that we have. There's no single question but we'll say generally speaking if something is very expensive to provide it will become a premium feature. If something is more of a softwarebased feature we start with free we try to build the best that we can and then we find creative way to to build on top of it. --- About this transcript Read from YouTube's own caption track and laid out by ViewRank AI (https://viewrankai.com). ViewRank AI finds the videos already beating a creator's own average on Instagram, TikTok and YouTube Shorts, transcribes them from the audio itself in more than 60 languages, and turns what worked into new ideas and scripts. Free transcript tools, no account needed: https://viewrankai.com/tools How to read any video this way: https://viewrankai.com/llms.txt