# How Simply Finally Cracked Facebook Ads with Web Funnels – Yoav Sharon, Simply

Channel: Sub Club by RevenueCat
Video: https://www.youtube.com/watch?v=Xv04J1cr16Q
Duration: 1 hr 7 min
Language: English
Words: 11794
Transcript page: https://viewrankai.com/tools/youtube-transcript/Xv04J1cr16Q

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[0:00] And they used AI to bring the drawing that the kid was just finished drawing, bring it to life. And this gave the kids excitement and something to be proud of that they were running to their parents to be proud. Look what I did. They saw that, hey, this app that my kid is using is not just spending time on another app. It's like very positive screen time. they could see the value of the app. So when we introduced this during first time user experience, it really increased our pool because parents could really understand, hey, this product worth me investing in it. Hello,

[0:43] I'm your host David Bernard and with me today, RevenueCat CEO Jacob Eiting. Our guest today is Yoav Sharon, head of growth and product at Simply. Simply is the world's leading creativity companion for the home. On the podcast, we talk with Yoav about reaching brand new audiences through web funnels, how they created their own Big Mac index for global pricing, and why monthly plans can beat annual on LTV. Hey Yoav, thanks

[1:12] so much for joining us on the podcast today. Thank you for having me. I'm happy to be here. Looking forward to the chat. I I thought it'd be helpful to get a a quick overview. Uh simply does a lot and and to have context for the rest of the conversation. It'd be great to just hear a little bit about what y'all do. Sounds good. Um, maybe I'll start with a very easy question. Does any of you play any musical instrument? Oh, yeah. Oh, yeah. You can't see it in the shot here, but my guitar's hanging on the wall. I mean, I I I call it my it's my aspirational guitar because it

[1:42] gets it gets looked at a lot more than it gets played, but but it's there. I I took classical piano lessons growing up. David's actually more of a musician, I think, than than than me. But you used to be used to be more used to That's also accurate for me. Yeah. Yeah. So, it's it's actually so familiar what you're saying and aspirational is a word basically. Um, simply is about helping kids and adults around the world learn creative hobbies, learn how to play piano, how to play the guitar, how to gain confidence in singing, how to express themselves through drawing and all of these. And again like you you're saying

[2:21] inspirational and you said you pick it up David as a kid. It's always some kind of a dream. It's quite hard to learn this new skill. So what simply is doing is we're breaking up to small chunks each of the pedagogical way and we help people through all the challenges and we really um make dreams come true in this aspect. We help people across the world learn their musical instrument that what they've been dreaming on since kids. Um, and it's really exciting exciting things to do. I I love it. I um when I learned guitar initially I was like probably 12. And uh and I did it with via

[3:02] I can't remember the name of the software but some piece of boxed software I got from Staples. Uh wow. Cuz there was no YouTube Jacob. There was no Yeah, there was no app store. There was I went to I drove to the town over. I probably paid $45 for a box of software that taught me to play guitar. So like I've I I might be one of the like early digital like musician musical natives, right? Um but uh but I I've always been sold on the concept since then because it actually

[3:27] I actually did learn guitar sitting at my desktop PC with that piece of software. Yeah, it's crazy. Isn't it fantastic? Today basically we're able to bring a coach almost at a coach level next to you h to be with you as you learn all these skills and all these hobbies. We'll get right into all of these but this is in big we have h in general I just mentioned we have a simply piano our most mature app we have simply guitar and simply sing and simply draw was the recent app that joined across all of them we we are active with million users and learners around the world 11 languages

[4:08] 180 countries so we're quite at the interesting scale at this point that's actually where I did want to start is the multi-app portfolio. So, I actually had the the chief product officer from Dolingo on the podcast earlier this year and he talked about how they tried to launch multiple learning apps and and ended up pulling it back in. I've heard from a lot of other people who struggled to do the portfolio approach. Oh, David, do you know the Elevate story? Like before we did Elevate like uh we had it was originally this company called Mind Snacks and we had like 10 different langu distinct languages. It was a nightmare like it I mean it was it just it was

[4:46] hard like technically right and just everything promotion like like having to get people to 10 different apps and you think you think like oh they download the main app and then we push them to the other apps but that doesn't always work economies of scale are a lot rarer than people think right not only this basically when you have your first mature app and it's already at scale getting to the second app is more than finding the product market fit basically proving that you have a repeatable way to create value. And what we do at simply we learn we always listen to our users and we saw that our audience is not single users and

[5:27] this is it. In many cases they are part of a household and in that household there are many passions for creative hobbies. People want to play the guitar. People want to sing, to cook, to draw. And we always start by really understanding what the pains are, what the real needs, what limits people. Like for you, Jacob, like it was kind of hard to learn from a box, from an non-interactive way to try to pick up at the age of 12. H it there's nothing to it doesn't know anything about you at that point, right? So trying to understand what limits people from learning a certain hobby and then forming a multi-disiplinary team we call them pods

[6:11] that basically tries to build a product offering and nail down that value proposition that actually meets that needs. And we use our playbooks that we try. Of course, we have those playbooks, the early growth playbooks and the early customer discovery playbooks. And it's not always the same like you mentioned, but we apply the same principles across all of our apps and you know, first principle thinking and we'll talk about other principles in a second, but it's definitely a hard task. It's not trivial to translate your success. And today we have already I mentioned earlier all the apps but simply piano is a market leader amongst like 80% amongst all

[7:01] piano learning apps. We're already in that market. Simply sing and simply guitar are growing to become market leaders and actually Simply Draw that only was the recent launch. It grew six last year in revenue and already at an interesting scale. So it's not growing slow. I think we at this point it's really exciting that we feel that we have certain playbooks that we can apply for finding product market fit with other not everything is success we don't always succeed but we do have some ways that allow us to repeat the you kind of know you kind of know what works like you've also defined a little bit your product

[7:43] or your market right like you have the set of users and they're talking about adjacent users and you think about this with features with revenue cat like your first product market fit is hard like because you're just like shooting in the dark but then it's like once you have those users you mentioned just talk to them and like you can kind of figure out you know and if it's not that user it's like somebody a user that's like almost exactly the same but like slightly different that you just missed it's like okay how do I get that um and then of course there's like you know the resource engine right it's like the first successful PMF tends to produce

[8:16] excess capital and flow revenue whatever you need to invest in the next thing. Right. So, yeah. I I want to dig into the playbooks, but I was curious first, was it always the plan to do a portfolio of apps or did you try to put I think you simply piano was first, right? And simply guitar was second. Did you try and and just like have a tab bar with like piano and or a menu selection with piano and guitar or did you always plan on doing a portfolio? It was not always depend. We did early on we did understand that we are serving a quite many needs and it wasn't

[8:50] that trivial to decide are we doing it under one umbrella or are we doing it in separate apps each one has its pros and cons there is no right way to go about it and well and I'd love to dig deep into that because this is a real challenge for apps because you have an app like calm where they you know make a name for themselves in meditation and it wasn't necessarily obvious that sleep stories

[9:12] should go inside the call app. Like does that like confuse the experience? Does it overload users? You know, how do you onboard to two different use cases? Like it creates complexity in a single app. And one of the things you generally try and do in an app is keep it as simple and straightforward as you can. So let's dig deep into like that decision-m process of like why create the second app and any struggles you had trying to fit it in the first app. So everything for us always starts and ends with what makes sense for the users, what brings value to the users. As you mentioned,

[9:43] we deeply understand the job to be done, what they're looking to achieve. And you're right, Jacob, that we're looking at adjacent users, but still when you have a household, when you have parents and kids and siblings and each one at different intent levels, different schedule, different availabilities, h it's different mindset altogether. So when we build new separate apps for for us we start with separate apps it helps us not pull a weight on any product. We we'll talk about this how we work we try to work very fast and very independent uh with each product and one of the challenges that we discovered is on the user acquisition front

[10:27] on the growth front where when you have multiple apps platform you want to make sure that you don't always just optimize performance for each of the apps. You want to make sure that those apps don't compete with each other. You really try to understand where your audience overlap, where they don't overlap and eventually it all goes back to the classic growth questions. Okay, who are our users? Where are they? How can we reach them with which messaging messaging basically tests to ensure that we don't cannibalize each other and we don't compete and I'll tell you even I think midl last year we've had a very interesting test. I think it deserves

[11:13] its own episode. It's very I I will not go into details too much but in essence what we've done there we tested for the interaction between the apps and across platforms iOS and and Android and we basically we have app campaigns when on the go side and we have web to app campaigns and what we did we turned off app campaigns on a certain go we turned off web campaigns on another go and we started seeing what happens to the organic traffic, what happens to the interactions between apps, between platforms on the same app and we're able to crystallize any calibilization that happened or did not happen. So we're doing this we're measuring this way to make sure that we

[12:02] don't compete. But I'll tell you the bottom line is when you have a platform with multiple apps, it's never about perfect attribution. The world's so chaotic, right? There's just so many things that can happen, right? So chaotic. But you do need enough truth in your CAC modeling, in your customer acquisition cost modeling to understand where to put your next dollar. This is the essence. So it's not about perfect attribution, but it's about enough understanding of where you want to put your next dollar when you spend. When you launched Simply Guitar, did you and and this goes to the cannibalization question, did you promote it inside the piano app or did you

[12:46] use what you learned scaling simply piano and do almost like a like a parallel motion to scale simply guitar? A parallel motion. We only do these promotions when it really serves our users. Meaning where we feel that actually, so I'll tell you even an interesting example. We heard from many simply piano users that they we understood that when they play they also sing. Yeah. So we

[13:13] added in our library of we have library of you know many songs a lot of licensed songs. We added an indication for those pieces that we also had the same piece in simply sing so that a person know okay I can learn how to play this on my piano and my spouse can increase her confidence in singing this and we can sing and play together or I can do it by myself. So only when we do feel that it gives value to each of the apps uh we do this type of promotions. We do have one angle and we can talk about it separately where we do promote our bundle all of our apps

[13:58] but this is definitely separate when we start. No, we always start with our playing our independent growth playbooks. And and and it makes a lot of sense. And as you were describing your whole business earlier, I was thinking, oh, it was like a light bulb going off in my head. Like my daughter loves to draw, my son is playing the saxophone, my other son learn

[14:17] guitar. It's like in a family unit, you do have all these different interests, creative interests. And that's where the cross promotion makes sense. It's interesting to hear that. doesn't sound like that's a huge motion for you because I mean that would be the playbook I think most people would expect. You have this big scaled app. You're going to like bombard it with like pushing people to to get the other app. But it sounds like you take a much more subtle approach of like hey you're learning piano do you also want to sing and then hey if you have a family you can

[14:47] learn all the things. So how do you how do you present that to the user in a in an effective way? I think what leads us is not the growth aspect but rather the usage in retention and at the beginning simply piano we had only a single user single profile and we learned exactly to your point these are our households many people using sometimes several are using simply piano sometimes several using simple app several apps so we introduced the family plan and the family plan gave flexibility for different members of the family later on it became multi-profile

[15:23] with up to five profiles and multi- app. So you have an offering that allows for this flexibility. And what we saw that when you look of course on a cohort usage, you see that at any given cohort, the segment that has the strongest retention by far by far are those that have multi- app multi-profile accounts. Because like you said, you're now very busy with hosting and podcast and stuff. So, but your daughter, she's just went to summer vacation. She has time to start drawing and your spouse is now she is she wants during the weekend to learn to play the game. So, at any point in time, one person of the family will engage with the app and enjoy this family

[16:10] like family plan, multi- app, multi-rofessional. Yeah, it really fits the narrative you're saying just about the adjacencies in the household. I mean, I think about our Spotify family account like subscription. It's like nobody's turnurning. You know what I mean? Like even if Yeah. I mean, it's just cuz like everybody gets one and like we want our profiles to be separate and like we pay and then we'll pay forever, right? Like uh because it'll never be a line that everybody wants to cancel at the same time. Right. So, it makes a lot of sense. What are the what are the mechanics of presentation? Like what have you learned over time? Like

[16:42] you know when somebody comes into Simply Guitar is the first payw wall they see doesn't even mention a family plan you just try and get them on guitar and then like at some point in the future as they retain you present that like what what are the mechanics of how you do that? It it differs it differs not only across apps but also across the maturity of the app and across time. I think it also it's not in itself isolated. It depends with what which expectations they came from the ad, which campaigns we have out there, what is current our current value proposition and in some sometimes we can we can discuss it as well. Sometime we have them soft pay walls to start

[17:23] with sometimes only waiting for them to really feel the value to appreciate the value and then ask them to subscribe. So it it does vary and I think that it you know like all of your I think all of your interviewees and all the companies that you you're speaking with it's all about testing always testing and what the data shows us. Do you ever advertise the family bundle as a unit? Like do you ever do ads as saying hey your whole family's creative like you know join the bundle and and and for those do you send them to the web or or to the app? So you touched

[18:01] exactly the point. We used to beware subscription mobile apps. So we used to be 100% app campaigns and we started enjoying web campaigns a couple of years ago. Last year I think we've already I think 20% of S&P revenue is already coming from web campaigns. What web campaigns allowed us is of course it does allow us for better attribution because on the app campaigns you have at this is one of the main challenges but in addition to better attribution and sometimes lower fees but again this is not our main driver. It does allow us to first of all to customize the experience better to our users and also to h through that it allows us to reach new audiences that we haven't

[18:53] weren't able to reach them before that we can talk about this but I think the last point is exactly to your point we're able to offer them this bundle offering when you do your app campaign you send someone to the app store they are now going to download simply sing simply draw simply piano. But when they get into some kind of a web experience, that is where you can really tell them, oh, welcome to Simply in Simply, you can access all those apps. So, this is where we're able to market our bundled offer. And definitely, we we're doing it in the web and it's a it's really working well for us. You know, it's kind of fascinating to me

[19:33] how the shape of Apple's rule, how Apple's rules shape how you develop a business because in some ways pre-at where you could deterministically see that somebody saw an ad for Simply Guitar, maybe in that world it would have made more sense to have one app that has everything in it because you can do an ad for Simply Guitar. You can deterministically see what ad they saw and then put them through an onboarding that takes them through Simply Guitar. If you were advertising a family plan, you could have deterministically put them through the family plan. And there's a little bit of ways to hack around that now with product pages where you can send the app campaign

[20:13] to a different product page and then you know what product page they landed on so you can customize a little bit. But it's kind of fascinating to me that that part of the draw to the web was actually Apple's rules making it harder to do these kinds of like customizations on it. Um any any other comments on that or or just lessons from the web? No. So exactly that and and you know many companies are it's very popular web flows right you have n on the one side of the extreme side and you have single page web flows on the other side and what we found that working really well for us

[20:46] is the ability to have a holistic flow from the ad exactly to your point through on boarding and all the way to the payroll itself. If someone clicked on an parent ad and add addressed parents, we can address through the onboarding the entire pains and the entire needs of that parent that looks for an app for their kid. And through that, um, if I'm taking I think one step back, you know, when we browse our social networks, people are on Facebook and stuff, we're in a very lean back mindset. we're scrolling and going from a lean back mindset to an app store and immediately ask to download an app. It's quite a friction and people are no I'm I'm chilling. I'm

[21:35] okay. I have an ad but I'm not ready to download an app and start learning a new skill. Whereas our web flow helps us move people from a lean back mindset through consideration. Yeah. You ask them a basic simple question just to get that first, you know. Exactly. And it can take a few minutes, but still by the end, they'll hit the download button, right? Cuz they've Exactly. It makes much easier to help them understand the value even before trying the But even aside from that, you're just like from a psychological perspective, you're like waking them up a little bit, right? They give them a little time to kind of like, you know, promoting them. Exactly. Yeah. So, how how much

[22:13] of your traffic now is going through Web funnels? And have you seen any kind of arpoo lift or or any meaningful benefit of going through the web? About 20% of our revenue from CBO like in the past year came from a web flow. We did see a significant benefits for some of our audience to go through this web flow. We did see some very successful tests where this holistic experience from ED through onboarding through the payw wall managed to increase conversion significantly. Are you sending for your paid are you sending some users straight to the app store and some to web and like how do you what's the is there a rough breakdown of like when to send them where? So it depends

[22:55] like each app at its maturity level at what is the right creative at the right timeline you know there are many considerations and we have very welloiled like growth machine that checks you know all the effectiveness and performance of all of our campaigns all the time. It allows for better attribution. So all this personalization through the way is something that benefits us but it does vary. You don't have strict. Sure. So it's not like we're it's not like we're only doing web to app. It's just like web to app is one of the types you know you pair a piece of creative a placement

[23:30] plus like where it goes and that those all three of those are being tested and optimized. Exactly. And actually um I mentioned earlier that it allows us to get to incremental audience. So the web flow for example for us it helped us be successful with Facebook for the first time. I've heard that before. Skip the piano. It didn't work before because of the lean back mindset. And so, so first of all, we're able now finally to reach out to audiences on Facebook. Yeah, I've heard that. It's just like the the universe of people who download apps. It's almost like an identity thing. It's like, I don't do apps, right? And so, it's the same thing. You got to like prime them to

[24:06] be like, no, actually, you should do apps, right? Um, and I've heard the same from other other apps. I had this exact conversation with Leon Cass from Yeah, that's who told me. I think this is originally. Yeah, he he was uh he was on the podcast earlier this year and and he he said exactly that that like they've seen a ton of success but only or almost exclusively with the Facebook ads and and he he attributed it even to to age that you know it is typically older more fluent audience um needed more warming up. Yeah. Millennials, Millennials are app native. Like, you know, the app store has been around since I was in college, right? And so,

[24:43] like, um, and that's not true for the generations ahead of me a little bit. So, so we we don't take it we're not insulted, but we we're that audience. [laughter] Yeah. Yeah. Exactly. Any any other top lessons from from the web as far as like I mean like that I think that's really insightful for folks to say, "Okay, we never found success on Facebook before. Let's try Web Flow from Facebook." um and not replicate our Instagram funnel. Any other top lessons like that that you think people can take away and like where to experiment, how to experiment? It sounds like you all have done a lot of experimentation. So, I'd be curious to to hear any other kind of

[25:21] top lessons people can take away. We don't look at Webflow as a only a place where we can save some platform fees. And usually this is one of the drivers, right? Like attribution is one driver, platform fees, but we we learned that it's just a a way to reach incremental audiences. You just need to understand what works with web flow what how can you communicate your value in a way and by the way it's also it's you don't just replicate your app store to web experience it's not about that it's about how you can make your users or potential users understand some of the value they're going to get set up the right expectations so that when they hit the pay wall

[26:03] they really understand the value they're going to get that that's a really different perspective I than a lot of people these days. I mean, I I hear from more and more people that it's just like screw Apple, I'm going to send all my p stuff to the web and there's this weird hostility, but it sounds like you take a much more pragmatic approach of like whatever makes us the most money, that's what we're going to do. Like, h how do you think about that? So, I think it's it's more than just pragmatic. We we we look at um the platforms, Google and and Apple, we don't look at them at the

[26:33] other side. We look at them as a true partners. We we have first of all alignment of interests. We want to reach the most relevant audience. 30 30 points of alignment of interest. Exactly. [laughter] No. And and they want to have these quality apps as value to their user than app stores and they see most of the metrics, right? But metrics are lagging indicators. They don't always help understand. So we found what working what's working really well for us

[27:05] is we work very closely with them. We share with them our plans. We share with them our road maps. Our of course we share with them our challenges. We ask for their help in supporting some of the areas we're going. And we found that in addition to helping us understand where the market is going, it also helps us really gain some h access to beta programs. It helps us h gain access to design partnerships. Some of them I cannot even talk about here like all the stuff but really really cool design partnerships that we're partner with both uh platforms and basically we're looking at the platforms as real partners. Of course, no one likes to pay

[27:50] large fees for zero. If you ask people what what fee they would want to pay, it's 0%. Right? That's the only logical answer. [laughter] Exactly. We understand that. Okay. And we're not happy to pay but but still we look at them as true partners and we have very close collaboration relationship with. Yeah. I think there it's it's like David you were just talking about the rage and it's like Sweeney I mean Tim if you want to come on the pod Tim I know you listen Tim Sweeney uh please you're always welcome but it's like getting mad at the weather you know what I mean? Like you could get mad at the weather that you're allowed. It's free country. You can do

[28:23] what you want, but like I don't think it's going to increase like improve your outcomes, you know. You cannot reach audience without them. Yeah. And so and I think there's there's there's much more benefit in maximizing the relationship, seeing the alignment and um you know than trying to and you know everybody I've talked to who has run the experiment has like seen how much they can

[28:43] they can net out of like the the web to app or sorry apptoe flows like running their purchases. It's interesting, but it's it's I don't want to say marginal, but it's pretty close to marginal, right? Like it's not business changing. It wasn't like Exactly. It used to be more, but it's not that. And I get this is where I get accused of being a shill for Apple. Uh because like obviously

[29:02] I like AAP and stuff, but um you know, again, it's about making the most money, right? It's testing. You mentioned it already about testing. It's like, hey, it's a test it, try it, you know? But I think at Revenue Cat, we're building web funnels. We have web payments. We have paddle integration. Like, but it but it's about like how do you make the most money? Not like how do you screw Apple? It's like, you know, send people to the web when the web makes sense. Send people to the app when the app makes sense. And but don't like and your point is so good, Jacob, like don't let this kind of like anger or rage or like uh frustration, justice mindset, right? About

[29:36] justice mindset. Make bad business decisions. Like make business decisions. Don't make like emotional justice driven decisions. Is it fair that Apple's a trillion dollar company? has a lot more leverage than you. I don't know. I don't make up the fairness rules, but it's reality, right? [laughter] So, deal with it. Uh, I think a lot of people listening will be curious, and you don't have to answer if you don't, you know, have a good answer, but how would you recommend people build a relationship with Apple? Often it's like a we'll call you, don't call us kind of situation, but do you have any any tips for working with Apple and Google as as partners and and maybe even

[30:11] how you establish that relationship early on? I I think you know any company at any app developer at a certain size but even already at the earlier earlier sizes you you have an account manager there and embrace that embrace that keep them in the loop fly to meet them make sure that you share with them your plans your challenges so you know in the earlier days we used to send our developers to WWDC with real problems that we have with building our sound recognition engine and we gave unprecedented access to engineers in their sound system so to help us and all of these forms relationships and they see a partner here that really cares to have to great value to the

[31:07] users on their platform. So we're always trying to adopt all the new features and adopt all the new the recent technologies that we can to make sure that we give the most quality value to our user the user experience across all of our apps. We have monthly meetings in even in simpiano I think we have a fortnightly meetings bi-weekly meetings with our account managers there both in Apple and Google. So we're always keeping track and updating them and learning from them where

[31:41] do they see that we're not according to what they expect in terms of benchmarks and stuff like this. So I think it's just embrace this collaboration and uh and keep ongoing communication with your account manager. That's more meetings than I have with most of my reports. [laughter] Um that's really great advice though. And speaking of those partnerships and collaborations, I know y'all have been working on uh Vision Pro and Android XR and things like that. And and I I'll be honest, I'm I'm a little jealous in some ways in that, you know, as platforms, they're so early that I imagine you're not seeing like a dollar for-doll return on your investment in those

[32:20] platforms. But it's like you're getting to be at the forefront of this technology that will will continue getting better and better. And it helps build that relationship. I'm sure Apple and Google really happy that you were on the platform. And so even if you're not getting a dollar for-doll return on Yeah. today, you'll hopefully get it in the future. I mean, if it's ever a good platform, there's there's so much alpha in being early on a platform that just compounds. So, if it does take off, like then the bet even even if you don't invest anymore, you know, like the bet will pay off way down the road u potentially. I agree. I super agree. And you know, you touched

[32:56] the um XR and wearables and all this world of augmented reality. And for us, creating learning skill, learning hobbies, creative hobbies when people experience them in an augmented reality. It's a different game. It's a different game. Of course, one day everyone, this is how people will learn how to play the piano, to play the guitar, to sing, to draw. For us, you touch it, I cannot say, but definitely some of the design partnerships that I mentioned earlier are around these areas. And for us, we really care to be like Jacob, like you said, at the forefront of all of these releases. Anytime that we learn that a new device is coming up,

[33:43] we we try to understand, okay, this form factor, which of our products will benefit the most from that form factor? And it it differs across apps and across devices. And at that point we set up a again another pod where we are working very fast and very closely with the platform to make sure that we can have a product as early as the release of that device others. So we I agree with you. It's not about an ROI right now with the direct revenues, but it's definitely the direction the future and we really believe in that future and so we want to be there very strongly. Yeah. And I'm I'm such a huge Vision Pro fan. I mean,

[34:31] it's too expensive. It's You got to believe you got to hear this. I've never used it. You haven't? Never put one on my face. No, I should have asked you to brought bring it to the offsite or something cuz like I'll tell you I I'm I'm not I was so I lead the the first um a build of simp on Vision Pro and I'm not kidding guys. um seeing someone learning how to play with Vision Pro and I I'm like all immersed in that experience and seeing how at the f at the end of their first course they are getting a standing ovation from a crowd in Carnegie Hall and

[35:11] I I'm getting goosebumps. It's like goosebang and this guy played all to joy at the end and it feels like at the top of the world. You cannot get that in a non-immersive experience. This is one of the real um real benefits of having this augmented reality. So that's what's so sad to me that that you know rumors are Apple's kind of slowed down and and they are working on the vision air but it's going to be you know delayed a year or two or whatever it is. So, it will get lighter and easier and better, all the things. But man, exactly what you're saying is like I don't use a Vision Pro a

[35:49] lot, but when I use it and and especially and I wish Apple would just keep leaning more into it and putting more content out cuz when you see the a basketball game where you can like actually see how huge, how athletic these like I've never sat courtside at an NBA game, but you put on the Vision Pro and it's like, holy crap, that is a totally different experience than watching a TNN uh you know broadcast of a basketball game. Um, the Vision Pro, they they did all those like sample videos and they they have a whole series with like adventure stuff. It is insane how immersive those experiences are and it's like I want to use it more but as a platform

[36:28] I wish it would have taken off more and and I I actually had not downloaded the Simply Piano app on it yet. I need to go do that this afternoon. You should go ahead. But it's like when you get that experience. So, so yeah, I'm I'm as bullish as you are on the future of it, but it but we are very early innings and it's going to take a while for the tech to catch up. They make an immersive uh email and podcasting app, but then I will have a big use for it. Until then, I don't have as much time. It'd be an aspirational goggles for me. you YouTube on the uh actually I'm sure

[37:00] I'm sure YouTube built a native app and it kind of sucks compared to to the the one that was uh the Christian built Juno but man like kicking back in a recliner with YouTube like you know 100 inch TV even even that not immersive as far as like the video itself wasn't immersive young children full-time job plus VR headsets not there's not enough room for all three and that's part of why I don't use it very much [laughter] All right, Annie, it's no more fanboying around the the vision pro. Let's get back to [laughter] to the topics. Um, I I did want to talk about uh your contrarian view on monthly plans. Uh, I know that's

[37:39] something Simply Piano really focuses on where a lot of the industry has been pushing harder and harder into annual plans. So, what do you why do you push in monthly plans and what are your tactics around that? Definitely annual plans is the way that most companies start with especially for simply where learning a new skill. Learning how to play the piano,

[38:02] how to express yourself in drawing better, how to gain confidence in singing. It takes time. It takes time and it requires a lot of commitment. I'm going to now dedicate time the next few I'm going to start. You don't need much time by the way even 15 minutes a day but still you want to start something you're committing to someone and we saw that committing to an annual plan sometime deters our users it's quite another commitment of another financial commitment. So first of all we

[38:35] it started introducing monthly planes and we saw that it adds that flexibility to our users. So over time we realized okay it can work in some aspects and h some users find themselves feeling better with annual plans because of the discount and they can their maybe their intent is more clear whereas others they select the monthly plans and they are renewing it from a month to month. Now uh it's not that straightforward because of course in an annual plan it's h it's better cashwise right you get all the annual price in advance. This is why companies

[39:16] start with it. You have now an entire year to improve your product before the renewal comes. The move to monthly works only when you have good enough retention renewals on your monthly plans. So when it's justified, when you can really move there, h it the math does work. However, um again here it's it's never only math for us. What we care a lot about is to be able to have this fast feedback loop between a winning test and how it gets translating winning on usage and how it gets translated to its monetary value. So by having monthly plans this feedback loop is really fast. every usage improvement you get more renewal binary events right that are you improve

[40:14] your usage you improve your retention people use it more immediately translates to a better renewal one month renewal multiplier and it gets translated to revenues so um it does work well for us the monthly plan we moved there um after having a very heavily and thoroughly tested pricing strategy for that because it's not you don't just do monthly plans. Okay, but you need to really test thoroughly to understand what would be the right point with the best optimal balance for your users and for you. Um, and today we have these monthly plans many of our users are using and some are still using annual plans that fits them better and and it makes

[41:00] a lot of sense. I mean, there's a reason why Netflix and big companies like that don't do monthly plans. And and I I was doing the math in my head as you were talking a minute ago because I've never even done this math before. Is that a $25 a month uh Netflix subscription is $300 a year. I did that right. Right. Yeah. If I had to pay $300 for Netflix, I'd be like, "It's never worth that to me. There's nothing about Netflix worth $300 to me." Which obviously isn't true cuz I've been a continuous subscriber for 20 years or something. But I don't feel that way, right? I had

[41:32] this conversation with uh Seth Miller like maybe five years ago. He was like, "Look, my thesis is if you have a high retaining app, a really, you know, great app, and a loyal user base, the optimal LTV will always come from a monthly." But he was struggling to do that in his app, Rap Chat. But that always stuck with me. And and and thinking about the Netflix of the world, like like we're saying, you wouldn't pay $300 in one drop for Netflix. And so yeah, how how are you

[42:01] thinking about and using the pricing to maximize LTV? And are you seeing good LTV on your monthly? Yes. Yes. We wouldn't have moved if we [laughter] haven't. No, seriously, it's it's a and it's not across all of our apps. Only at a certain maturity level where we do see really strong usage for our monthly plans. H we do this transition and we do we do have better LTV basically on our monthly plans for simps we still split some of them and we do a lot of testing ongoing but uh in our more mature apps we feel really comfortable about going with monthly plans. So I I'm curious on the annual plans because this is something a lot of people test and I imagine

[42:46] you've done a ton of testing on it. What have you found to be a good ratio or or a good discount percentage that does attract the people you want to annual but then also kind of maintains a high enough monthly price where you do kind of maximize that LTV? There's no single uh percent or single discount but definitely the discounts vary. I think it sometimes is 60 plus 60% or or sometimes 70 75 it depends on the plan itself of course um user psychology plays a lot here right and all of our biases and anchoring and all there are a lot of user psychology goes into pricing this discount

[43:27] level is definitely one of the levers that we found really beneficial to to test basically I I wonder I don't know if this played in at you but I feel annual versus monthly for a lot of developers, whether they think about it or not, it's like kind of a cash flow hack, right? It's like financial engineering. It's basically financing your growth with like future customer revenues. Did that play does that play into your philosophy here? It's like the need or lack of need for operating capital at any given time. Does that play into it at all? We try not to get into these things. We it's not about financial engineering, which I agree there can be this way,

[44:03] but it's not like that for us. For us, it's we value this cash when we try to at the beginning of the product when we try to use it to improve the product over time. At the end of the day, yes, annual plans give you a cash benefit. But monthly plans, we feel that it give you like some kind of the truth about your usage. What's the actual dollar? There's a dollar value to the information, right? Exactly. any retention, any usage value that is

[44:36] is being really translated. So we we try to avoid these financial engineering. It's not beneficial. We do what works really well for our users and finding the right balance of letting those that care more about the discount to have the annual plans and letting those that care more about ongoing usage on a monthly to monthly basis, let them choose the monthly. This is what we found works best for us. It's I say it's a it's a luxury. It's a bit of a luxury of of a company that has time that has like the ability to like compound and let this thing grow because you see this often in like especially in like the money Twitter growth hacky part of like app world

[45:11] where it's like hey 3-day trial to an annual plan gives you like the most cash flow and then you can reinvest it and like that definitely works but like it's very unlikely to me that that is like globally optimal right that it's like probably just what you need to go from zero to one which it's the kind of point I was digging into is like kind sometimes is right and that can dominate the the reasoning. It's like, hey, the financial like borrowing money from your customers at a 0% interest rate or actually in this case a 40% fee 60, you know, you have to give a pretty

[45:40] big discount uh to to do that, but like can be optimal. Um, which which can be an input, too. But I'm I'm with you on this like both I think emotionally and like financially. I think like the the information flow of monthly. I also think it's like flexibility is good. And so, uh, and in fact, like I I mean, I look at Chad GPT and now they've differentiated and they've added annual plans and stuff, but for the first couple years, they were just offering a very simple $20 a month. Uh, and I think there's, you know, one, it like

[46:11] makes simplifies simplifies things for your customers, also for you is a great place to start. Uh, and then also it does feel like it comes from a position of strength, right? I know this as an industry insider. Maybe it's maybe that doesn't affect like the average consumer, but you go like, "Oh, well, it goes back to the Netflix thing, David. Like Netflix, it's X dollars a month, right? It's not like, oh, this was a discount, blah blah blah." They do bundling and stuff like that, but like it does, I think, in some way, signal premium to some degree, right? As a consumer, always buy the monthly. Always buy the monthly. Like,

[46:41] even if it's five times more expensive, like I'm always going to buy the monthly. Yeah. Cuz I just I'm very bad at hedging or like pricing my future attention span, right? So like I just I pay I pay more for the flexibility. Right. So interesting because I'm as a parent I feel that I know it's contradicting any logic but I found myself buying annual plans for my kids sometimes because my inspiration I think of course they will use it. Of course it depends on the app this app. Thank you for making an investment. After six months I realize oh I have a subscription here. Yeah. goes

[47:14] back goes back to testing, right? Like every every user has different motivations and they just you have to test for the aggregate. Have you ever experimented with weekly plans? I mean, typically they are used a lot of apps that use them aren't high retention and so it's kind of like maximizing the LTV over a very short time. It's the uh it's the monthly it's the monthly thesis at the limit, right? It's like how do you maximize maximize for simply piano and then maybe especially the the bundle five bucks a week. it. You know, I don't know exactly what your your um you know, plans are for for the bundle, but five or 10

[47:49] bucks a week is probably a very reasonable price for the bundle where you get all the apps and everything like that. And then I did hear from I heard from a guy at Apple. He since left, so I feel more comfortable saying this. I I pushed back really hard on on weekly subscriptions like a decade ago. And the conversation with him was like Apple from their you know talking to users and everything like that they do see especially like in emerging markets and stuff that a weekly plans are that people do like them because it gives you that like you know you're not for people who like

[48:23] $50 a month is a lot. If they get $50 a month of value but spread that out $10 or $40 a month of value but they spread that out $10 a week. That's actually a nice even kind of what we were talking about with the cash flow of monthly. It's like taking that to the limit of like I'm just going to pay $10 a week instead of $40 a month instead of $480 a year. So of all the apps, I think a bundle with all your apps probably is worth 10 bucks a week. But so with all that set up, [laughter] I'm curious if you've done any experimentation on it and then what you learn doing that. It's a

[48:55] great question because I think I'm always like I always like to look at the extremes. Yes. weekly reduces the friction even further, right? You don't even think about $5 that you're the how much a coffee cost you this morning. However, when you look and I'm always sorry for always going back to our users and how they use our app, you want to learn a new skill. This takes time. You cannot judge yourself every week. Oh, do I already know how to play the piano? Am I more confident in singing already? No, this takes time. So having yes it's a low friction but having this

[49:36] on every week every are you sure you want to pay? Are you sure you want to pay? Are you sure? It's not that easy. So I think uh when we think of usage the longer planes planes make more sense for the how people learn new skills. However, you're right that there is this other side of reducing friction upon checkout. We've tested it in some of the apps, not in the bundle, in some apps, but right now we're not offering any maintenance. Yeah. And that says a lot. And I I love your point too that uh even on a monthly there is a little bit of uh like commitment like, hey,

[50:11] I paid 40 bucks or 30 bucks or whatever the price is and I'm going to I'm going to, you know, make use of that. I'm going to actually, you know, you need to build the habit. Yeah. You need to build a habit now. And finances are an incentive to build that habit. Exactly. [laughter] Exactly. as you've scaled the business, what have you done as far as localization? I know so many apps, you know, so dependent on the US and so focused on the US, but it does seem like as companies scale, they have more resources and time to invest in other countries and and then actually, you know,

[50:43] start to make it work where people more focused on the US just throw a price out there and it doesn't happen. Um, so so what are you seeing internationally uh for your products? I think for many companies localization or expanding to other geos is quite a high potential or risk growth engine right it's there's not so much risk of course you will localize your app to a different culture people will feel more comfortable using it however it's not that trivial and for us we always look h we've done two things that mainly work well for us in terms of localization first of when you localize to a different country or you want to not only convert your currency there

[51:30] but you really want to localize the pricing which makes sense. So we created our own pricing index like our own like Big Mac index similar concept that takes into account not like similarly to the Big Mac like the purchase power in that GIO but also other considerations that we can refer to when people think about using learning how to play a musical instrument or learning how to draw. This is one thing that we've done and we applied this pricing scheme across all geos. We saw significant RP increase, significant dramatic RP increase. In some Jews, we were surprised that it didn't work, but we had to adapt there. But in the vast majority of GEOs, it really worked really

[52:13] well for us. What was the initial hypothesis or or factors that went into the first test? And then, you know, how many geos did you go into where where your assumption on price w was wrong and you had to change it? like did you start with the big mac index and like work your way back or like how did you actually because this is something I hear a lot of people asking about actually so this is a a question I get for revenue cat all the time is like you guys have all the data you should create a pricing suggestion table but it's not that simple different products have different like

[52:45] willingness to pay so what were the the kind of factors that went into your decision-m around that that starting price when you were focusing on a new geo we start always with the leanest way possible we try to so I think at the beginning I'm talking about years ago we implemented the big mac as itself index and then we evolved it over the years in that case we didn't test one go after the other we just defined we modeled pricing strategy with the same principle across all geos we rolled it out as a test and we saw which worked and we optimized it over time and of course pricing test also you need to update your pricing not only as you your app matures

[53:31] but also as you reach new audiences as you the time passes and it so it it is something that we continuously work on but I I think you touched also on the way that we test stuff and you it does touch the the the second part of how we localize and basically localization you know it's more than just translation in our case we localize the content, the songs of that country, all the translation of the app, all the app store, and of course the pricing and and the creatives as well. But if you want to localize to a specific country, you cannot do all this work

[54:11] only to find out that it's not as you hoped for. So what uh the principle that leads us is we want to make sure that whatever we do we do it with the highest quality with localization it's all about trust right if you try to localize your first time user experience but you don't continue to localize deeper into the product people lose trust if you I don't know if any of you if you try to localize to Germany it's German is an an interesting example where the way you address people changes. Um, so it the consistency, the way that you h localize throughout your app, the way that you the UIX looks, the current, everything, you need

[54:59] to make sure that whatever you do, even if it's a limited scope, you do it at the highest standards. You don't want to lose trust. You want to make sure that you set up the right expectations with the users. And uh once you gain confidence in that direction then you can go all in and do focalization but we don't do it to begin with you we all because it's okay it's not the riskiest part of growing a product. It's something that is quite sure when we need we expand to to other markets. I'm going to I'm going to clip that whole segment and anybody who tells me we tried Germany

[55:33] like we we localized the price we did a couple of things and like we just can't crack Germany. I'm going to send them that clip because cracking international markets really is a ton of work and it is an investment and you have to think about it like that because if you just change the price and expect to crack a market like that's not how you crack a market. Any other top lessons or like interesting geos where there were counterintuitive things that you learned that that maybe you could share and like at least give people a head start. So yeah, actually uh one of the most mind-blowing

[56:04] learnings that we've had at some point in piano we decided we we already had been translated to 11 11 languages and we decided we want to go to the first geo where we're going to really localize not translation but fully localization. So like we always do, we created a very thoughtful and deep model that estimated the potential of each Juro in terms of what might be the upside in that zero the incremental audience in in ARPO but also what is our confidence that we can really meet that potential. So we landed on Japan. Japan for us for simply piano was our first deep localization that we wanted to go. So we started like I mentioned we're highly confident

[56:52] that we can really reach this potential. We localized some Japanese some you know songs like from anime and we all the UIX was changed and app store creatives everything was translated localized of course currency to Japanese and all the metrics started growing great as expected except for one metric the checkout conversion the pay wall conversion it did not move even on the contrary it even decreased and we didn't know why like come on it's like we did everything properly we brought in a country manager Japanese country manager a great guy and he reviewed our flow and he told us guys you're not treating the pay wall properly

[57:45] you know as we're used to all the best practices in pay walls you know make it very clear least disruptive you want to minimize the details on the pay wall. You want some social proof. You want some things, but overall you want a very clean pay wall. The Japanese 180 degrees opposite. They expect a very detailed story of the company,

[58:12] of the founders, of our values, of all the things that you're frustrated that no one reads. They want to read [laughter] all the social quotes and a lot of colors a lot. I'm telling you, you you can't even believe we had a very long one pager that they scrolled and scrolled and conversion skyrocketed. Wow. So it it taught us that you know in in any localization best practices can take you up to a certain point but you really need to understand the intricacies and delicacies of each user that you're serving and the the audience and what really bothers them. So it was a great lesson in localization. Such such a great insight. Uh well as we wrap up I'm going

[59:00] to ask you the three questions I now ask every guest. uh kicking off with uh what's the most impactful experiment or change you've implemented this year? Your biggest win? I can talk about um a fantastic test that our product team in Simply Draw did where it of course we didn't talk about how we use AI across all of our work, but we use it very of course extensively and and heavily. And they used AI to bring the drawing that the kid was just finished drawing, bring it to life. And this gave the kids excitement and something to be proud of that they were running to their parents

[59:45] to be proud. Look what I did. Now, the parents at that point, what did they see? They saw that hey this app that my kid is using is not just spending time on another app. It's like very positive screen time. They could see the value of the app. So when we introduced this during first- time user experience it really increased our pool

[1:00:10] because parents could really understand hey this product worth me investing in it. Uh so this was an amazing I think win from our product team and it was something that you know they do these social shares where they share organically parents share organically on Instagram and like look what my kid 8-year-old kid did and it's a delight. It's a delight. You see them, it's it's really a fantastic way to see. Have you found that feature to perform well as an ad creative? Like once you launched that feature and saw it really take off, are you actually using that in ads? Because that sometimes that's a fun way to like get a really high performing ad

[1:00:49] is to find that kind of magic moment. Exactly. So we are doing it. We are doing it. And you you're you're spot on. Many times many of our creatives are being inspired by real usage that happens in in features that are really beneficial to our users. We turn them into ants. Yeah. Very cool. All right. What is the worst experiment or change you made in the past year? Your biggest fail of the past year. I I knew that you're going to send me you're going to ask me these questions because you're asking it in every episode and I I am a big fan of of your podcast. And it's when I

[1:01:24] thought about it, I said first there was so many to choose from, right? We're we're a testing company. We're always test and so many failures. But I think one that taught us a lot was what we call a premium awareness test where in simply piano we introduced a soft pay wall at the end of on boarding and we wanted to see maybe it will be appealing to the on boarding

[1:01:50] will be enough for people to already commit. This test won fantastic significantly on ARPO. It was a great great win. We celebrated it and we were proud of it and we enjoyed it for months and months only to realize after lots of months that after many months that um actually the users that subscribed to through that soft payw wall were using our touch experience meaning they don't necessarily have any piano at or any keyboard at home. They only enjoyed we have some couple of touch courses on simply piano. So they only enjoyed playing it but but they sign up

[1:02:38] for a year. We don't have any value for a year. So this is not the audience that we're looking for. So we were so bummed about it because it it no it wasn't winning as we thought. But then we had a second lesson. Then when we looked deeper into the deeper segmentation, we realized that actually one segment did find real value in it. And this was the segment of kids because kids, they love to really play and play the same songs again and again and again. They just enjoy it and it builds them. It gives them time until they're ready to get their first small keyboard

[1:03:19] at home. So we ended up um taking it off our adults the all the accounts with only adults uh profiles and we kept the soft pay wall for those accounts that have kids profiles on and uh this works well for us but um it started as a like um really un like a very surprising loss that like that we had for that test. Yeah, that's fascinating. All right, last question as we wrap up and this is a fill in the blank. Growth would be easier if I think if um we could

[1:04:01] impact users during awareness and consideration phases without hurting their privacy needs. You know, at the end of the day, AT is there for a reason, right? Privacy is good. it does prevent us to customize the experience already from awareness and consideration phases. So I think if we could magically do that, not hurt your privacy, but still be able to fully customize our growth activities and creatives for you, it could have been easier. Yeah, it's especially hard for y'all targeting kids. The kid the rules around kids uh and different and a

[1:04:42] lot of it is is like governmental regulations and stuff like that. that you have to abide by. And we all know just how safe and wholesome the App Store is for kids thanks to those regulations as parents. We all know that's been done. Thank you very much, Apple, for protecting us. Sorry. All right. Well, this was so much fun. I really enjoyed the conversation. I think there's so much uh people can take away, experiments they can go do based on this conversation. So, thank you so much for sharing and opening up. Any anything you wanted to share as we wrap up? Any uh roles you're hiring for? Anything you wanted to shout out? So, first of all, it was a great

[1:05:14] fun. Thank you so much for having me and and it's a real honor to be here. I I think for us, I I I mentioned it earlier. It's we're always hiring. Yeah, we have on our uh on our website are the positions we're looking for. It's always about being able to reach almost every household around the world and help them fulfill their long life dreams sometimes of playing piano, playing the guitar, singing more confidently or drawing more expressively. And um I think we're we're thinking big. We're thinking we're we're on our way there. Um, and I hope to be able to, you know, to speak with you guys maybe in a year or two years time and to talk about more products and wider audience

[1:06:04] and more than anything more lessons that we have gathered. Um, it's really exciting time. Awesome. Thank you so much for joining us. This is so fun. [music] Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com. subclub.com to join our private community. [music]

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