How To Not Screw Up Switching Your App to Subscriptions — Matt Ronge, Astropad App

0:00[Music] [Applause] hey you're listening to the sub club podcast a show dedicated to the best practices for building and growing subscription app businesses we'll share insider secrets from the top subscription apps on the app stores let's get into the show hello i'm your host david bernard and with me as almost always revenue cat ceo jacob biden our guest today is matt rangi co-founder and ceo of astropad having worked at apple garmin and founded several companies of his own matt is an experienced engineer and entrepreneur with a passion for building creative tools on the podcast we talked with matt about how not to screw up switching your app

0:43to subscriptions why offering lifetime subscriptions might not be a great option and what it's like when apple sure locks your product hey matt welcome to the podcast hi thanks for having me on yeah i've been looking forward to chatting with you you've got a lot of fun stories to talk about today yeah yeah no it'll be uh good to get into all right well i i wanted to kick off just uh um having a founder on can't can't miss the opportunity to hear the uh the founding story so you were at at garmin for a while and then kind of took a a break from that and launched

1:19astropad so tell us about that yeah yeah so um to go back even a little earlier uh i think it was about 2006 i was uh intern at apple i was an intern there two summers actually um but i bring this up because i met my co-founder giovanni at apple um so we went different paths for a while um he went to apple full-time for i don't know five years or so and i did other things i worked at a startup and then eventually i joined garmin and garmin garmin was a lot of fun that was uh we worked on aviation apps you worked on the uh this is in my

1:57wheelhouse ah okay garmin pilot right yeah i was the first engineer on on garmin pilot oh nice yeah nice yeah the you guys had maps right before four flight did i think yep you had the vectorized maps very early that were awesome it was like the one like switching incentive so anyway inside pilot baseball yeah yeah and that was tons of fun because i didn't know anything about aviation going into it you know they brought me in to work on the ipad app and they really wanted to compete with for flight so we were kind of neck and neck with four flight for a long time

2:29for flight in general kicked garmin pilot's butt but it was fun it was fun and just to learn a ton about aviation you know we do stuff like get to fly around like the uh oh nice yeah so we'd be like all right we've got new approach plate feature let's go test it and we'd get in a little little plane in a past life i made software that connected garmin pilot and for flight to um flight simulator so i probably would have liked major jobs no way okay yeah fsx flight that was like a his weird uh connection but yeah that was like a windows app i made like six

3:05or seven years i don't know even when it was like 2012 or something like this but it was like my side gig for a while oh wow okay that's really funny i had no idea i probably saw that somewhere along the lines and didn't know it was you because i would see different things hooked up to foreflight and yeah and that was that was uh that was really cool i loved working in the aviation space just super interesting just all this stuff i didn't know and working on the mapping uh the mapping was a lot of fun and pretty hard actually pretty hard to get no i get it

3:34yeah and it has to be i mean talk about constraints on ios that report really pushes like you know ios is designed for consumers right so like apps will jet some randomly like notifications are an issue like there's like lots of stuff that make it a difficult operating system for like a hardened environment like a cockpit uh and you have to engineer around all that stuff and it's taken a number of years so like yeah i can imagine like the challenges oh absolutely and this was we started on the ipad 2. oh wow more of a challenge right which i think had like 16 kilobytes of ram or something like that

4:07it was it was terrible oh and actually another another cross over here this was my first introduction to in-app purchase subscriptions as well because i i was the one that built the subscription infrastructure for garmin pilot so so we're really crossing over now but uh but yeah that was that was tons of fun did that for a while but ultimately kind of got frustrated being in the big slow company and watching like for flight just like they were just crushing it they were doing they were just doing amazing and um i mean i'm still really proud of the work we did too don't get me wrong there's a

4:38contingent in the pilot community of garmin fans like it is it is not a it is not a zero use app like there are people that just prefer it and i still see it in a lot of places well and yeah what we eventually did is we built in a bunch of i can't remember the the name of the devices right now it's been too long but the um handheld gps units they had for the cockpit that had mapping functionality in it we eventually ported that over and that was quite tricky because it runs on its own os garmin has their own os they actually use

5:07so it's a whole like how do we host this thing within an ios app it was it was so we eventually pulled it off and were able to add the full mapping which was super cool you know and i'd always been entrepreneurial in in nature too i mean i had been involved in the shareware scene early on on the mac in like the 90s and early 2000s it's just kind of my my thing and i toyed around with lots of different ideas over the years side projects that i would charge for so i knew i really wanted to go that direction so i ended up leaving

5:36garmin and ended up doing consulting and the consulting i did was actually email apps on ios because i did a um i did this open source framework mail core that made it easy to do imap and smtp i originally wrote it for the mac but it got like no interest because who wanted to write a email client for the mac be in objective c before the iphone like nobody but also an iphone was on the scene and people like oh it'd be great to write an email client and um so i got involved with that helped clients build email apps for a while um but eventually i ended up getting more

6:11work than i could um that i can handle and i saw that giovanni had left apple who i knew from years before and i and i really needed somebody that i knew i could bring in and really count on to get this work done because email apps are pretty tough too to do them yeah and um he was like yeah sure so we ended up working together and we're like oh this is great so we set up a new company but we knew that we didn't want to do consulting long term like it just wasn't weren't great at it it was paying the bills it was

6:39fine and so we were looking for a product idea and what originally inspired it was uh with astropad for those that don't know what astropad we have esterbed studio which what it does is it allows users to use the ipad as a drawing tablet like a high-end wacom cintiq for your computer and it was inspired by the surface the microsoft surface and they microsoft had ads with like the surface with full photoshop on it and a pen and we're like that's super cool but we don't want to use windows we don't want to get a surface like why can't i do this with my ipad and so

7:10that's what that's what started um astropad so we we consulted to keep the lights on and then um worked on astroped in the remaining time we had uh and it it was it was pretty tough almost two years to build it um which was way longer i think than any of us anticipated but uh we launched it it started to take off we stopped consulting and fast forward five years and six years now that brings us to today what was the original business model did you was it paid up front when you first launched yeah it was paid up front and interestingly early early on we um and

7:51this can even get into subscription stuff too why we eventually went to subscriptions uh we charged on the mac side actually because what's unique about astropad and actually our other product luna display as well is it has an app on both the ipad there's two apps there's like in the case of astropad there's there's one on the ipad one on the mac so we actually made the ipad app free and we charge for the mac app and that way we thought oh we can charge justify a much bigger price because people are used to paying more for mac apps sort of kind of didn't work um we actually ended up

8:20switching to the app store and made the mac app free and that worked way better and we were up front page interesting what was the what was the signal yeah because i think that the original line of thinking tracks right you're like oh people are paying hundreds a year for photoshop like here's a plug-in for photoshop you know whatever however they're thinking about it right here's a here's a value add for this like core thing i do and it's on my mac and it's professional you're going to get more than the like 299 download on the app store that seems to make sense so what what did you see that didn't materialize

8:49well it was two so we were charging i believe 50 on the mat cap side we talked to other people in like the indie scene other founders as well and we had had a really explosive launch like that still today that was one of our biggest launches of all time it just got covered all over the place because it was a really new pretty innovative use of the ipad and so people loved it what year is like 2016 something like this um

9:162015. okay yeah and we made a big stance about like two like let's use the ipad for professional work because so much the ipad then was like games and stuff and we're like this is super cool it's not what it is today no right yeah and and we were like all right let's let's yeah this is way early on before the ipad pro before apple really shifted more heavily into more prosumer workflows on it really started pushing it more and so that was pretty novel and it got tons of traction and we had tons of downloads of our free trial but we just didn't have that many conversions to paid and we

9:52talked to other people like what's up with our conversion rate and it was just like something's out of whack were you guys taking credit cards was it through the credit cards yeah it's credit cards like and then were you doing like a credit card upfront free trial or was it yeah upfront free trial okay so you would put the credit card in and then it would convert after x days oh no no you would um it was more like the traditional like old school like shareware model like right okay so you get 14 days of use and then it basically shuts off unless you pay yeah pay got it got it got it i

10:21think it was like 14 days or so that we had and it just didn't convert to the dollar amount we expected um so we had insane amounts of traffic but we weren't generating the money we expected and at this point we'd quit consulting we had fired our clients we were like we're going all in on this and so we had to make it work it was partly out of desperation that we tried the app store because we're like this isn't sustainable at its current rate we need to make some changes and so let's try it what what the heck why not and so we did an upfront payment i think it was 30

10:54initially in the app store and revenue went way up it just worked way better yeah i mean if you think about the the case like oh i want a a way to use my ipad with my computer right i'm gonna start probably on my ipad yeah it seems like an ipad problem not a mac problem and then also just like it's just easier to buy just use your app store for like it just works better it's i'm still a big fan of the app store like it's funny how the mac app store never feels like it's quite the same thing it doesn't feel as smooth or as good

11:25because like the the still the way of buying software this is the friction is so low the experience is so ingrained in everybody like you just know how to buy software on the app store um which maybe that's just enough that's might be 90 of what made the difference it's just the the buying and commercial experience is better that's what i believe i believe just the frictionless buying experience and also the other thing too is like there was no longer a trial it was paid up front so if you had any curiosity at all like you had to pay yeah and at that price point like if it's something like you might

11:55use professionally you might take a risk like you take a 30 or whatever we didn't initially do that because we didn't think a price like that would be sustainable on that store but again we were kind of like we got to make something work so let's try stuff i mean there's there's big benefits i mean when people think about pricing it's it's a curve right they can raise your prices you're going to have fewer users like that's always almost always true unless you're just really lucky and have an inelastic product but most most products are elastic in some sense and so there's big benefits to that though because then

12:24you have less support you have you know fewer users less unless you're hoping for some viral distribution mechanism like there can be big benefits to pricing high initially um and then you can always you can always work your way down like it's another big advice like you're never gonna hurt yourself starting high because you can always like back it down and and nobody's gonna be too mad at you i totally agree with that and the other thing too that factors in with these decisions is we're a bootstrap company we've never taken outside investment so that cash flow front is really important for us as well to grow to grow the business so

12:55we might prioritize it more than um a company that has a large investment round and just wants you know pure user numbers early on right like it's just a different we're optimizing for a different thing yeah for sure and it's changed too on the even on the venture side even on the funded side like revenue is everywhere yeah i mean every revenues everything now like uh which is great you know five five to ten years ago if you were starting a venture i mean i played with the half starting adventure backed company in like 20 2008 and like we were like explicitly said like do not worry do not try to get

13:28right now right which might have been the right advice for that environment but uh you know it's it's just different it's all about revenue now it's the best way for people to show you know it's the best way to tangibly express value in a product right so um when did the subscriptions happen i guess like when when what was that journey like from from this point of paid up front uh to a subscription model yeah so that took about two years so in 2017 we launched astrophed studios so originally at the time it was just astropad and we introduced a new version that was like the professional edition astrophed

14:02studio and i can talk about this more too in just a minute this was very key to our switch to subscriptions because the other thing about us doing subscriptions at the time is we were very new on the scene as well to doing doing subscriptions there wasn't a lot of there were services doing it but if i remember correctly even before that the app store rule the app store guidelines didn't even necessarily allow any kind of app and there was kind of an exception in there for like prosumer type apps and we were hoping to use that and so this is really before apple had the big push on subscriptions and they

14:37opened everything up so it's very very different time there's not a lot of information out there bootstrap company really concerned about blowing up our existing cash flow so that's why we introduced a second edition of astropad master bed studio yeah that was subscription and okay yeah so then we still kept this the the current one going so if you wanted like the light version you could grab that on the app store as a one-time purchase but if you wanted all of our advanced features that was an astropad studio and you got to subscribe to that and you know we had the free trial and everything and really we made the we made the push

15:12you know because we knew that it's still a pretty niche market and we knew that we had to two things we had to find a way to have some kind of recurring revenue and like paid upgrades not an option really on the app store so that was one thing we needed a way to charge more from our current customers over time and yeah we also needed a way to push up the price point we knew that at about 30 up front we felt we were at about the ceiling we could push but for a really professional tool we felt that that was way too cheap but just think of it in terms of value

15:44capture right like you should be able to capture some of the value you're generating and if and if you sell you just don't know you sell 30 bucks a pop there's some users that probably get no value out of everybody they try it they use it they don't use it whatever and then you have some users who becomes part of their core workflow they're doing you know they're making six figures and consulting on design or whatever every year and you're not you got 30 and that's it forever um and so subscriptions without being able to like charge them per click or something like this you have a better

16:11proxy to value because if somebody's continuing to use it they're continuing to pay for it and you're continuing to capture some of that value and and then you know going back to the sustainability argument i've i've made i will continue to make this argument until the day i die but like you just see how it makes so much more sense like you are now incentivized to keep working on this you don't have to do weird things where you're like revving every year and like all this like effort you can just like focus and really like talk to those users and and really serve them and continue to enrich the product um so

16:42what was the operational head overhead of having to i always always worry about that when you're trying to like maintain two binaries it's a nightmare in my experience or not i don't know it can be a real pain yeah and still to this day we still do maintain two and it's a total pain i mean i wouldn't i wouldn't recommend it like i think you could pull it off more today not doing that but again this was very early so much so that the app store team reached out to us and they're like oh we want to feature you just because we want to start pushing subscription stuff more

17:13and like you're one of the first in this category to do it and we did we get a fee it didn't amount to much so there there wasn't a lot of examples to go by um so we were very very very careful we were very concerned about um about it and uh you know the big thing too was sustainability really those two points sustainability another thing is driving up the price point because with a subscription you can do a free trial so people are more apt to pay like we just could never find a good way to do like a more traditional in-app purchase with it so you could do a free

17:43trial people are willing to pay more for an annual or you can break it out into monthly amounts or whatever increment you want to make it seem much more digestible so that's a way you can charge a hundred dollars for an ios app is through subscriptions you're not going to do that through upfront payments it's just not gonna it's not gonna happen especially with the risk like you're asking the consumer to bear an incredible even at twenty or thirty dollars you're asking a consumer to bear an incredible amount of risk you know so many apps i downloaded and try and like they're all bad some of them are bad

18:11maybe about half like a lot of bad apps out there i'm just kidding i love all of the apps they're all great uh but there's a lot that don't that aren't the best and then uh and then the other half is like sometimes you don't know if it's gonna fit your use case this happened to me this weekend i was doing some cad thing i tried shapeways which i think it's called shapeways or shape or three yeah yeah they came out about the same time as us too with uh subscriptions there were another one they were very early uh i remember um this amazing app i was blown away by it but i i thought i

18:38needed a like a pro export feature and so i plunked i was like 200 bucks for the pro thing to be able to export a certain file format and i found out later i didn't need it right but i was able to back out they would say like oh actually i didn't feel bad i wasn't like ripping i would have paid like if i was going to use it but i was like oh this actually doesn't fit my use case so i was able to walk away from a 200 purchase having known actually evaluated it right and that's an incredible amount of de-risking for a consumer yeah you have

19:06this great blog post that you've published about how not to screw up yeah the antenna like the avoiding the negative case so like what's your playbook or how did how did you navigate it that you think went well yeah so this is really when i wrote this this was really after seeing some some apps some popular apps just totally bombing the switch and i've seen this not even just one particular app i've seen multiple like popular apps do this where they just totally bomb the switch's subscription and so this is really just drawing on our experience making the switch and it went fairly well uh for us i mean

19:41still we had angry customers you're always going to have angry customers but we kept it to a fairly reasonable amount even creating a new binary because that new binary was all like subscription from the beginning right that's right but there were still people that were like wait i paid for this other app and you made a new app yep they're like oh you should add those features back to the one i paid for and we're like well sorry so that's just one that's just your opinion man yeah i know i mean yeah and that it was like yeah these are a lot of great features but do

20:10you realize it took like two years to develop a lot of these like this is like some of these are really really quite sophisticated and we've got to fund the team so hard to express the cost of software development i know i know well that's that's interesting because what's there's a whole other tangent we can get into um i won't right now but we also sell hardware product too and the difference between purchasing a hardware product and software is fascinating fascinating you can get people to pay way more for hardware i'll say that yeah i mean so so much about percy like i still think as

20:40humans we haven't maybe never will have an appropriate perceived value for software uh and the thing is is our hardware most of the development cost for our hardware was actually in the software yeah anyway anyway so um when we were switching to uh subscriptions you know and the the first thing is just being super super extra generous with existing customers and we were but i wish we were actually even more generous so we gave existing customers they um i forgot even how we did it exactly did we email them but anyway they got a um they got like an access code that gave them three months

21:17free like no credit card required like they got the best like you get three months totally free no credit card no just like try it out and and see what you think i wish we'd done even longer actually with that doesn't cost you a whole lot probably it's just deferred revenue if anything and the reality is most of the revenue too for our subscription came from new customers uh as well in our in our case and so like forcing our existing customers to switch over to subscription wouldn't it have worked very well timelines wise how many years after launching the original version was this was two two years was it two years after

21:56yeah so i mean that's not nothing but if you think about it you know now that's we're how far from that original date five or six years exactly right so like you're talking about now at this point one third or whatever of your user life cycle or of like your accumulated user assuming you have linear like user edition but likely you haven't but then also you know if you think about it in terms of decades right like yeah there's really like the the the brand cost of you like trying to ring stuff out of those users really doesn't knock that out right and you might have cash flow

22:28reasons and stuff but i think even if you try to wring it out it often doesn't work well yeah and and that's exactly why is because you've built such like brand loyalty and loyalty with your existing customers you're gonna flush that all down the toilet in about two seconds once you try to force them over to a subscription and they're like your advocates out there they're like they're out there telling people about your product we had a lot of people that were really excited about astropad we didn't want to burn that we really really didn't want to burn that and so that's why i wish we were even more

22:57generous honestly at least we were more and we just for the subscription it was forward-looking it was like you know what these existing customers got a really really sweet deal and that's fine they decided to come on early with us they're rewarded for that great we're forward-looking so the way that we did want to convert customers to be existing customers as you subscribers is by making it so good the new subscription offering that they couldn't resist so not forcing them it was the carrot not the stick it was like okay we've got these amazing new features we've spent two years developing and if you want them you know

23:32you are gonna you are gonna have to subscribe and that's really what i where i think a lot of popular apps have made a mistake where they're just like everybody you're all switching over if you want to continue using trying to go to subscribe they're like yeah and it's like well yeah don't take a lot of the stuff they've been using and all of a sudden put it behind subscription you're gonna really make people angry doing that instead develop something totally new that's super exciting that people want and that they're like oh yeah heck yeah i'm going to subscribe like i've had a great relationship with this company

23:58they built a great product i want this feature okay then then they feel like it's their choice it is their choice then you subscribe you're not you're not forcing them and there's a whole different psychology around it at that point i'm curious that you run into it and david you might know better but uh did apple give you any guff about the codes cause like sometimes they get weird when you're unlocking stuff not through the app store yeah they didn't know about it i kind of figured i was it was a softball but i wanted to make the point that like there are some times when if

24:28it's not in your core flow and like it's a way to like be good to users like apple's not going to know and they're probably not going to care and if they find out most likely the worst case scenario is you got to take it out well and that would have been fine too because it was just a one-time thing for us yeah you're just doing it one time for existing customers i tell people like don't try don't mess with apple like it's just not worth it for you but there are some cases like this where like yeah nobody's gonna notice i'm just gonna look the other way and like this

24:52is a this is a good chance to bend the rules and when it's good for customers i think you have a much stronger argument with apple too like in this kind of case like assuming you can get your case heard right well true but the thing they they clamp down more on is these like referral flows and things where you're where you're offering incentives and offering a different price to people coming in for new revenue and then i i think they were especially sensitive around kind of manipulating the app store of like you can flood a bunch of new users in with incentivized downloads and stuff like that so but this kind of

25:25use case i think they they'd be happy to look the other way follows the spirit of the app store guys yeah but i did want to ask so so you were paid up front and then you switched to subscriptions what are your thoughts on lifetime lifetime subscriptions yeah yeah so this is interesting and i actually wanted to talk about this because i think david i've seen you tweet before that you're not a big fan a lifetime i believe i've gone back and forth so maybe we can have the debate here yeah i'm curious to hear your take so one one caveat up front we do not

25:57have a lifetime plan so despite what i'm about to say we do not have a lifetime plan so take that as it is but um you know now being a number of years into this and seeing how high churn can be for kind of like b2c type uh subscriptions it started to make me wonder um and actually what made me think about it as well is our um our luna hardware we sell it allows you to use the ipad another mac as a second display we now support pc as well and that's a hardware product but we charge a very high upfront price for it and

26:32it's interesting that i feel like our two products almost compute out to the same lifetime value even though one is a subscription and the other is a one-time hardware purchase and so that kind of opened my eyes to like well maybe because i was very strongly against lifetime like early on like a lot of people brought it up in the initial switch like oh you should add a lifetime or a perpetual or whatever you want to call it i was like no i don't like that i don't like that but then seeing that you know in an annual subscription you can have 50 churn that is really significant and if you

27:07calculate it out yeah your lifetime value of of a subscriber you know like 50 churn i believe that would be about two two years uh would be so two times your subscription so if you're charging yeah double your subscription that's your essentially your lifetime value then so if you have a really high upfront price is a lifetime thing really that bad of an idea that's kind of where i'm at here are the two things i don't have the data to prove it yet actually um we have a data scientist coming on soon and so i i actually and well it's probably not something we could definitively answer with our data

27:41ask the question david i can give you my i can give you my i've seen some data okay so my theory on this now as i've seen so much talked to so many of our customers at revenue cat you know thought about it with my own apps and everything else is that the people who are gonna be willing to pay that 60 80 100 200 lifetime are the ones who are actually going to use your product for years and years and years and years so when you take your when you take your average churn rate and say my average retention is two years and so i'm going to charge 2x my

28:17subscription what you're not accounting for is that it's actually your best users who are going to be the ones paying lifetime and so the average retention of that lifetime user is actually going to be way longer and then the other thing i've been thinking more and more about is that we really are so early so we don't like you say the average user turns out at two years what you don't even really know yet is how long are your long-term users going to stick around and when you think about how early we are in subscriptions there may be subscription apps that that have users for 20 25 years you know like a

28:55calm or something like that where you know they subscribed in 2017 or whenever calm first introduced their subscription in 2015 16 whatever it was and then like it's just a part of their everyday life and and they just stay subscribed literally for decades their lifetime value has a very literal meaning and we don't know right and you know are our glasses gonna like change this up what's gonna happen in the future and are we gonna be able to transition some of our use cases to whatever the next kind of technology is but at the end of the day like we're just starting to see um some of these cohorts that are that

29:34are hitting five six years of continuous subscription like i've been subscribed to amazon prime for you know a decade i think now i've been subscribed to netflix for six or eight years on the video product and i had a dvd subscription for for a couple years and then canceled that and eventually got back on and so i think we're just so early in understanding like how long these things are going to go that if you're going to if you're going to pick off some of your best highest intent users and charge them 200 bucks you're actually probably significantly shortchanging your true lifetime value i'm gonna i'm gonna interject an

30:10uneducated take which is basically what i do in this podcast but uh two points is one i've never considered that david which is interesting like the lifetime are you funneling away people that have a higher actually higher lifetime value limiting it because like i really do believe most consumers are pretty rational so they wouldn't be asking for the lifetime value if they didn't think that they were getting a good deal right so you probably are sacrificing some stuff but that might be okay because the flip side kind of matt going back to what you're talking about it's like cash flow can really be important right booking that money like right up front

30:40can really mean the difference between okay i can hire the next dev and like we can kind of ramp what we're doing as opposed to an annuity which essentially like an annual subscription where you're just getting that money like over time and yeah it's going to turn out a little bit or it's going to turn out quite a bit in those first couple years especially in the like presumably you're probably a little bit better off but still like people just move on and like stop using tools and even even consumer prosumer stuff but it is interesting how you see i have seen this in data before

31:07multiple times when you try to look at ltv that like it always seems like the lifetime value finds a level like it finds a level like between like we've we've looked at this in like converge like full conversion funnel modeling between different products like it almost doesn't matter what path and packaging of somebody goes down the ltv often ends up roughly the same now that's accepting what david's point which is like this very very long-term version of people being here from because in ltv modeling we don't tend to look past like two years so what we need to do with our data is look back at some

31:41of these apps that have had subscriptions for a very long time and start to understand new revenue versus old revenue and look at some of those early cohorts and look at the actual ltbs of those early cohorts as some of them mature into five six seven years of subscriptions that's the analysis we can do jacob that i think would be fascinating yeah the the problem is is they tend to be really small because they do decay quite a bit yeah so like you end up with these probably really sturdy stacked cohorts but they're very they tend to be very small i still at this stage tend to be very

32:14small in comparison to like the 100 people that signed up last month right there's a lot of dynamics going on and because of the honestly just because of yeah like the age we've only been doing this for five or six years like we're still pretty early and understanding how this is gonna play out yeah and and dave that's probably the best argument i've ever heard like you might have you might have convinced me now to go the other way actually i would get some data first map because i think it's one of these arguments that sounds and makes sense but then like you know when you actually

32:40look at the data it might not actually pencil out i mean it's like what we were talking about earlier with like oh we're charging on the mac the mac side for for astropod oh that make tons of sense like logically and then like the data yeah sometimes it's just one of these things where we're not super good at reasoning about without seeing it like uh with an actual model yeah and then there's other reasons for for a lifetime too i mean i still have lifetimes in both of my apps and i think if you if you have ongoing costs like my weather app i am gonna pull it from my weather app but it

33:09is a nice like price anchoring right like you have a 60 80 lifetime and then you have a you know 15 annual subscription or something or you know whatever whatever those numbers look like the price anchoring is good and then it is the off-ramp for the people who are just like yeah i'm never going to do a subscription and so maybe maybe the yeah i'm never going to do a subscription even helps balance the losing your kind of highest intent users because they're they're not actually paying more because they see that they perceive more value kind of to jacob's point but they're actually paying more because they just don't want a

33:43subscription so yeah there's a lot of factors i mean that's an interesting it's mixed that cohort isn't pure right that cohort isn't necessarily like oh i just love this app i'm gonna use the rest of my life right like it's yeah it's there's different reasons people would go to that price point well and for for us one reason we seriously thought about it early on i mean again we never did it but is we had so many people come to us and say uh you know we hate what adobe did going to the creative cloud subscription model we preferred when we did this like giant upfront you know we bought the creative

34:13suite every two years for a thousand dollars right they actually preferred that and because we were dealing with a lot of creative they were like asking asking us for that for that model so that's where we yeah we hemmed and had on on doing it ultimately didn't but now yeah after after a couple years and seen because it's not like uh you know what i would expect more with a lot of b2b subscriptions where the cohorts just kind of like stack and you have much lower turn a business starts using something and it's part of their workflow and they stick with it forever where consumer tools

34:44stuff changes faster like the kind of devices and the kind of you know yeah like in in our case with astromed studio uh what what does 10 years from now even look like right 15 years we don't even know what does the ipad look like in 15 years it might be running creative suite on the ipad right like exactly so it's hard it's harder to like i think i might be biased in that way too coming from like the the area we work in where we do see things changing yeah really really quickly especially compared to some of these other things you mentioned david that are more like content businesses to me

35:20like netflix like calm in a way i would argue is kind of like a content absolutely business peloton you know where it's a podcast player with like a very specific kind of content absolutely so that's a very different than like the tools yeah that's a great point matt like all of this stuff has to be really be conditioned on your product the kind of value it delivers where it lives in the value chain you know if you think about like pro users creating content with something and you know they're using the the value that they're creating and delivering to somebody else isn't getting created in astropath it's

35:51part of the process right so like thinking about where you sit in that value chain and stuff can can help educate you and yeah you might be right like there might be there you know with how fast things changing and development of stuff like you might not be able to rely on that like hey we're going to stack forever thing and that's fine that's just business right you just have to understand your market your positioning and then you know playing around it and then uh speaking of things changing i i did want to get into um luna display so wwdc uh what was it two years ago so

36:232020 apple gets on stage and says surprise you know you can now stream your display from your mac to your ipad built into the os and of course that's exactly what luna display does as a hardware product so what was that like uh sitting there watching wwc i assume you you were actually watching live oh yeah oh yeah it well it was actually it was one worse even than that because part of why we had done luna display was to diversify because we felt very vulnerable with astropad alone and it turns out sidecar did what luna and astropad do wow so astropad has way more features and it's and it's been

37:03actually at this point both luna and astropad have way more features than apple's sidecar but early on that was really really really really tough yeah yeah our stomachs just totally dropped like we felt like we were living a nightmare i mean i remember waking up the next morning and i was like is this real like is this really happening like oh crap it is i got to deal with this like this is this is awful because we had about 15 people in the company at that point yeah that's one thing when it's you and your your founder like whatever you'll figure it out but when you get all these

37:32people that makes it tough yeah yeah and and we weren't totally oblivious to apple coming into our space like it seemed like a natural and so at the time we were actually more worried about touch max like supporting apple pencil because this was the time like the microsoft surface studio came out and that kind of stuff just like made so much sense we're like at what point does apple just add this natively to the mac and then astropad doesn't make any sense at all anymore so our thinking was is that well with luna display we're adding a second display so even if there is a touch mac you need

38:06second display so this seems like uh we we never anticipated that they would actually do what we were doing because they were so anti like putting the mac ui they kept talking about the mac ui doesn't belong on the ipad the mac ui doesn't belong on the ipad and we're just like yeah it doesn't seem like they're going to do that interestingly we never expected them to disable touch and put it on the ipad which is what they do versus ours supports full touch you can do anything you want through the ipad i've never used the the sidecar thing uh but you can't you have to use a pencil

38:36essentially you can only use pencil interesting but we support full like touch we do right click we can do all sorts of stuff that feels like a design by committee decision oh yeah yeah so we didn't really expect that and it was it was brutal um and not only that but it was free and integrated with the os yeah so it was like oh wow this is you know it's one thing if it's paid and then we could compete on on that but a future like this of course integrated in the last and so it's just just absolutely brutal i mean our lunar revenue went down 10x almost overnight

39:12oh wow wow yeah it was rough that's funny because i don't even know how i would use it in mac os i don't follow this stuff as closely as i used to i'm not going to tell you guys i'd be one of those like 10 that would still be searching it on the app store and so and you've told this story publicly but apple had actually um purchased a bunch of your unit did you even like go to cupertino and display it and yes tell me that part of the story yeah well it was just we were we were connected in through um through apple had had multiple multiple

39:46discussions with us and and felt like they were trying to support us as part of their ecosystem little did we know that behind the scenes they were actually making a copy of what we were doing yeah yeah i had the same thing happen to me with launch center pro had shortcuts employees like buy our nfc stickers and ask a bunch of questions about how we were doing nfc and then six months later boom shortcuts at wwc announces nfc support but then not only we were kind of in a worse position than you and that like shortcuts has deeper system level access that we can't get access to so they

40:25completely uh obviated our use case but then actually even did it better because they were able to integrate deeper into the system i wonder how many other stories there are like this that just don't get told of apple kind of cozying up and buying a product and asking a lot of questions and then surprise yeah you can be you can be kind of star struck right like you wanna you think like oh i'm so special and like oh they wanna know and like oh maybe they're going to buy it i don't know something good right um and maybe it's not all i don't think apples i don't think they're

40:57nefarious i don't think this is their intent is to like crush indie developers but they're a big public company that's trying to increase revenue for shareholders right they're going to do things that are not incentivized and aligned with with partners only and so much as they like can keep the ecosystem pushing their value to be really like really cynical about it but uh i think it's always important yeah you got to remember when you go into these things that like it's not necessarily for your benefit right and so keep that in mind well and the the other thing too is this is not unique just to

41:27apple oh yeah this is a lot of the big companies in general yeah i mean it's hard to innovate in those companies right so they're better at copying because like you can see something that's already been innovated which innovation's hard and even company just is and like then you can but you're really good at building and you're really good at like deploying and shipping and launching right so it makes sense that you know if you asked somebody like oh do you want to steal the hard work of some small like indie developer studio and like crush their livelihood they'd be like no gosh no but they'll do it because it's like how

41:58their incentives are line strength it's like they will get a bonus if they do right whether or not that that's like moral or correct doesn't really matter it's just like how the incentives are set up uh and that's yeah it's not just apple it's gonna be any any large company that's significantly larger than you big big big companies um so you know a lesson to other small small developers out there be careful with the big companies when you have meetings with the big companies but you guys pivoted you guys you just went you went hard on windows right we went really hard we went really hard on

42:29windows that was our that was what we well so there was two things we did one we initially started adding more features to uh luna display in particular um because that one got hit the hardest first so we started add more features to that the first thing we added was um called mac to mac mode now it's actually more than that it also supports the pc as well but at the time it's called mac to mac mode and allowed you to use especially like an imac as a secondary display kind of a replacement for the old school target display mode i've got so many old laptops sitting around that i would

43:01consider doing that yeah that's what we do we do that and you can do it with a pc2 a pc you can use a mac as a display we're working on adding support for pc to pc so you can use multiple pcs so they can yeah you can use an old computer old imac as a display and that's been surprisingly popular really really popular i've used tools like that for a long time and they've never been very good especially the cross-platform ones like they're just not well made yes yeah there's your advantage make a good one absolutely and and they've been buggy and they'll have often like kernel level drivers that

43:33cause weird kind of issues and that's where we come in with our hardware support where we we actually plug a device in to enable the display so the hardware just acts as an hdmi device or whatever or a display yeah we have hdmi we have mini displayport and usbc okay usbc being our most popular but you plug that in and our software is able to activate a display i got it that's how we and then we can transport it you need to connect over if it's another mac and do thunderbolt ethernet wi-fi if it's ipad you can do usb you can do wi-fi so it's really really

44:04flexible there and so then we push really hard on windows that was a huge huge project for us took us another two years to do but thankfully turned things around for us and now we're actually back at the level we were before apple launched sidecar because we were doing great before sidecar and then we things took a dive and now finally finally we're back up again doing great there's some arbitrage here like i'm not a huge expert on the windows ecosystem i feel like it's big there are more windows computers absolutely i don't know if it's an order of magnitude but it's a lot um and and like that was i was talking

44:40about this like flight simulator thing i made that they made so much money for me and i did almost nothing just because they're so even in a niche like that right like my the one windows app i made made me a six figures of over years but like it was like good money um and i barely had to try on it but i think that's still the software quality on the app store and the mac are so much better so there's like an arbitrage opportunity here right you can if you can bring that level of care over to windows like and that's what we're trying to do

45:08and you can do it you can do it it's not like it's easier to build in my opinion it's not easier to build high quality apps on um the mac than it is on windows it's hard on both it's really hard but if you put in the time we're finding you can do it on windows too the apis are there so yeah and that's such a great story of you know not all sherlocking stories end uh with hey we differentiated against apple and are actually doing really well but i think the the the companies that are able to do that are the ones who who kind of end up coming out of it stronger

45:42we're now apple is kind of marketing for you it's like hey there's this amazing feature and then somebody uses it and they're like oh this is kind of cool but i need this or i need that and then they go looking for a solution and there you are you know i kind of see this in the in the weather app space you would think you know and with wwc 2021 with ios 15 apple you know made huge strides with their weather app but at the end of the day like there's there's so many um niche things that people care about with weather in content you know weather

46:15dot com the weather channel uh you know they have so much content they have so many other things that they differentiate on that you know i doubt uh apple's new weather app stole much if any you know market share from them so so yeah i mean how have things gone since uh since the pivot are you that kind of sherlocking success story that apple's just kind of brought awareness and and businesses better than ever yeah it was a very difficult two years yeah very very difficult two years we didn't know if we were gonna make it out of it right to be honest um but now two years later i mean i can say

46:51yeah it is possible to survive and and to do better than you did actually in the beginning uh it required a lot of hard work it requires to be scrappy it required us to pivot uh [Music] and but we were able to do it and others others can do it too so if a big big company copies you it's not it's not the end right like you can pivot your way out of that it's not easy it's not going to be fun right but you can do it yeah that's great well that's a great place to wrap up going out on a high note uh it's it's great to hear

47:23that that things are going well but any uh anything else you wanted to share uh we're gonna drop links to twitter to astropad uh and to your blog which which again there are several good blog posts i actually wanted to talk about we didn't quite get to today but yeah anything else you wanted to share as we wrap up yeah definitely check out our company uh astropad.com check it out check out luna and astropad now with pc support you can find me on twitter that's probably where i'm most active if you want to i kind of tweet about what's happening in the business stuff i learned along the way

47:53so m-r-o-n-g-e on twitter and uh check out my website too where i blog occasionally trying to do it more m-r-o-n-g-e dot com oh i gotta plug this too i also um host a podcast uh building astropad where i kind of cover behind the scenes of us bootstrapping our software hardware company yeah i i should have included that um yeah it's fantastic i've listened to a few episodes it's great yeah i think and i like i like that you talk through some of your blog posts as well that's something i i think we we should maybe experiment with here on sub club it's like some of our the better blog posts

48:27that we're doing it's kind of fun to hear you kind of talk through the the behind the scenes a little bit like you get into it a little bit more in the podcast than you do on the on the blog so it's a great format as well so yeah definitely check out matt's podcast all right yeah well thanks uh thanks for having me on david yeah thanks for joining us matt yeah it's been a pleasure to make sure you never miss an episode subscribe to the show and your favorite podcast player thanks so much for listening until next time [Music] you