# What Reading.com Learned Testing Prices and Funnels — Tim Dikun, Teaching.com

Channel: Sub Club by RevenueCat
Video: https://www.youtube.com/watch?v=gk2YqZuGP9g
Duration: 43 min
Language: English
Words: 8290
Transcript page: https://viewrankai.com/tools/youtube-transcript/gk2YqZuGP9g

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[0:00] Hello, I'm your host David Bernard and my guest today is Tim Dyken, chief operating officer of teaching.com. On the podcast, I talk with Tim about the importance of trust in web to app funnels, replacing free trials with money back guarantees, and how they found success with contractors after struggling with in-house marketing hires. Hey Tim, thanks so much for joining me on the podcast today. Yeah, absolutely. Pleasure to be here. So, we're going to talk about teaching.com, reading.com, nitroype, typing.com. Uh, you got a lot of great brands. And interestingly, and I didn't know this till you and I started making notes for the for the podcast, that the company

[0:44] started in 1997. So the the success you see today is what is that 28 years in the making which it's crazy how many you know storied brands are now finally doing well. I think you you all were maybe earlier than some of those older brands to mobile and to consumer success. But it's really cool to be talking to someone at a company that's been around 28 years and is doing really well in this new age of mobile. Tell us a little bit about the story of Teaching.com and Reading.com. Like you said, things started in the late 90s. The founder, Austin Butler, was working at a a

[1:22] community college at the like computer lab cuz back in the day there were computer labs. And someone approached him and and asked if the computers had typing software on them. And he's like, "No, but you know, he was kind of aware of what the capabilities of the internet were." And he's like, "I'm sure you can find something on the internet." And the kid went and looked and then came back a few minutes later and said I couldn't find anything on the internet. And so Austin went and taught himself how to program, bought a DHTML and JavaScript book and and built the the web's first typing tutor as a it was typing webb.net

[1:56] back in the day. And so he kind of ran that as a side hustle for a while and did other kind of software engineering things. And then in the early 2000s, it had generated kind of enough organic interest that he decided to try and make that a thing and kind of went full full on into into trying to build the the typing tutor. And then we started launching additional products. In 2011, we launched uh Nitro Type, which was a a real-time competitive typing game played

[2:26] by middle schoolers across the country. And that was really really successful as well. And then in 2022, I believe January of 22 is when we launched Reading.com, which both typing and nitro are primarily like B2B products. We sell the software directly to K12 institutions. And with Reading.com, we wanted to to sell directly to the consumers. So it's our

[2:52] our first foray into kind of BTOC apps. And it was our first mobile app as well. Well, not not technically our first mobile app. There was uh, you know, part of this success story early on, right when the first, you know, app store came out had this idea for an app called text pics where you could copy and paste ask art and send it back and forth cuz, you know, all iPhones had the same font. And so, even though it wasn't a monospace font, it would show up the same way on both the sender and the receiver. And so he he built this little 99 cent app and

[3:26] and put it on the app store and it just blew up. It was featured by Apple a bunch of times back when that really mattered and generated quite a bit of of revenue that was then able to kind of turn around and invest back into the actual educational app side of things and that that kind of had its heyday. It came came and went and then yeah we got back into the the app space with uh reading.com. Yeah, such an awesome story. As a company, you have found product market fit across three or four different products and in two different kind of distinct industries. I mean B2B

[4:00] I mean not technically B2B the way we typically think of B2B SAS but like edtech I guess it may be a better category to put it in. You know edtech and selling to schools is such a different skill set such a different kind of product requirements. you know, you're building a product to satisfy the the RFP for I don't know even know what they call it now at schools, but like to satisfy the the school requirements and to sell to administrators and then to now be running a consumer company where you're like primary target is a consumer. It's just honestly fascinating, incredible to me that you've found success across that many

[4:37] different products across such disperate industries. So I wanted to talk a little bit about how teaching.com thinks about the company about building products because I think that really is key to having found that kind of success. So how do you think about building products? A lot of different directions to go with that. The mission statement that we have here at teaching.com is just to to build cool stuff that helps a ton of kids, right? And we think about ourselves not as an education company but as a product company because at the end of the day we're builders. what really matters to us, what's really fun for us is to build cool products. And so

[5:15] we're kind of always thinking about the user and the use case and not necessarily chasing features that would close a deal, but really trying to think through what the users actually want. We hear what they're asking for, but what do they really need? I think there's some pretty distinct things about the way we run the company. Like for instance, we're async first, right? So we don't use Slack here. We consider it a productivity killer. It encourages this always on behavior and the kind of the conveyor belt of text where if you're not on right now, if you miss a conversation, it's gone, right? And so what we do is we we use different tools

[5:54] that really help slow down the pace of of conversation and facilitate people thinking through things more deeply before they post them. And that has been really fantastic in improving the quality and the thought process behind everything that we do. So how how do you get out of that? What tools do you use? So we we use Base Camp for everything mostly. And so we actually do use Slack, but we intentionally have the free version where like past 90 days of history everything's deleted. What we do when we're onboarding new folks, we say we want you to use Base Camp and we want you to disable all notifications. So you

[6:30] shouldn't be getting any desktop notifications or email notifications or phone like nothing, right? And so when you log into Base Camp, it's more of a of a push, right? Like you're you're intentionally going to it because right now is the time that you have structured your day, right? We want folks to be to have large blocks of uninterrupted time to do deep work and then when you come up for air, you might log into Base Camp and see what's been going on there. And then we use Slack and we say, "Okay, you do need to turn your notifications on in case I do need to get a hold of you

[7:05] right now. If I'm blocked on something or someone else is blocked on something and I can unblock them, I want them to reach out to me immediately in real time." But we police that pretty heavily so that if you're reaching out to me on Slack, it better be because you either need to tell me something right now or

[7:20] you need the answer from me right now. any other reason should be in base camp and I will get to it when I get to it when it's convenient for me. And that really opens up space for people to do really great work and then only they're not constantly context switching because of notifications and whatnot. Man, I really like that at our scale and and the habits that have been formed over the the eight years as a company. I've been there six years now. sounds very hard to kind of change gears at this point, but definitely sounds like a very nice way to work. And for those who can maybe

[7:55] make the transition, the proof is in the pudding. You know, the results speak for themselves. Sounds like you guys have built fantastic products operating that way. And it seems like a really great way to build fantastic products. But let's get back to kind of the way Teaching.com thinks about building products. I know on your website you have a whole manifesto and we don't need to go point by point through that but maybe give us a summary of the manifesto and then how that kind of plays out in product decisions in messaging in in the way the company runs and thinks about product. Yeah. Gosh, you're right. I

[8:29] think that document is probably four pages or something. So there's a lot of content in there. We originally put it out there just because we're very opinionated about the way we work and the way we think about things and we wanted to make sure that people who wanted to work here shared those same values and so we wrote them up and we put them out there. Basically, it's on all of our job applications. If you haven't read this, please read it because there are some people that will not like the way that we work and you will not be happy here cuz you're not going to be able to change us. We want

[8:59] to weed those people out early. But one of the things that comes to mind right now is when we think about hiring engineers, we talk a lot about the difference between a product developer and a software engineer, right? A software engineer is someone who enjoys writing code for the sake of it. And a a product developer is someone who really wants to deliver value to the world and they view software as a mechanism that allows them to do that. And so we really want to find the people who are driven not by you know writing the perfect abstract function but someone who who really wants to solve user problems and

[9:37] you know is also capable of of writing the code. You know one of the other things that we do is we we don't follow any like agile scrum methodologies or anything like that. We actually tried when we were first starting out first starting to scale our engineering org. We sent our people to product owner training and hired a scrum master and all that stuff. And what we found was that it took our highly creative software engineers which because writing

[10:04] software is fundamentally creative. You're you're taking something from nothing. People think of it as something that's just for nerds. It's really not that. It is a just as creative as product design. And what it did was it it took these creative people and it turned them into like ticket taking task monkeys. You know, here's the requirements. you build this and only this. And it eliminated kind of the back and forth that we had where, you know, someone might ideulate on a feature. A designer can then like kind of put pixels to it and then when a developer actually starts building it and and starts playing with it, interacting with

[10:38] it, realizing like, ah, this actually this doesn't really seem like it's having the intent that we want. And then we're not afraid at that point. Like we we encourage uh 11th hour changes, right? Like just because something has been decided upon in an earlier stage doesn't mean that that's what we have to ship to the user. And we tell people all the time it's like hey if we get to the end stage of something we've spent you know months working on this and it's not the right fit we're not going to ship it. We're not afraid to go back to the drawing board and change it. That can be

[11:08] really frustrating for some folks. It's something that is really kind of baked in into our process. One thing you told me in preparation for the podcast is that teaching.com thinks about kids products differently and you think about the difference between kind of parent involved learning versus kind of babysitting edutainment. Not to be too derogatory on that on the babysitting edutainment side of things because there there is value in you know my kids use educational apps actually I bought them subscriptions to chat GPT and I've seen them more and more like talking to chat GPT creating their own images like there's a there's room for kids to

[11:46] explore on their own but I love this idea of parent involved learning. So so tell me about that philosophy and then how that plays out in the product. So with Reading.com specifically, we were doing the research trying to figure out what this product was going to be. One thing became really clear to us and there's no area of like child education that's more well researched than reading education. So the literature out there, there's just tons of it and it's there are some very clear this is the right way to do things when it comes to to that research. And one of the things that we learned was that children will

[12:23] not learn to read on their own and they won't learn passively. And so because of where we're at kind of from a it's kind of two things, right? It's it's a technical limitation, right? Like when we talk about a child learning to sound out the word Matt, for instance, you ever heard a three-year-old? I've got four kids myself. So you got three-year-old trying to sound that out going, "Matt, the AI isn't good enough at this point to know whether or not the child did that correctly and to give it feedback, right?" And so we when we sat down to build this, we're like, there's no technical only solution here. What we

[13:05] really need is somebody sitting next to the child being able to give the child that feedback. And then because that's what the research showed was that children need to be directly instructed on how to read, we just decided that that was going to be an actual value for us. And so now even if not if, but when the AI becomes good enough to interpret the children sounding things out, we're not going to add that to the app because there are plenty of apps out there that, like I said, I got four kids. You need some peace and quiet. You don't want to feel bad about it. you give them an iPad

[13:41] with some educational games on it and you're able to get some stuff done. There's nothing wrong with that. Done that plenty of times myself. But the trap that we fall into as parents is thinking that they are actually going to learn to read just from doing that. And the research is very clear that the vast majority of kids will not learn to read that way. And we wanted to build something that was truly effective. And so I think having a parent and a child sit down together has all these different benefits, right? It facilitates the child's better like healthy understanding of screen time, allows for some snuggle time on the

[14:20] couch. The kid really is engaged, really want because of course every kid wants to look at a screen and so you say, "Hey, want to come sit next to me and do reading.com lessons?" And they're like, "Yeah, absolutely." You're bonding with them. they're learning healthy boundaries because then again at the end you are able to turn it off and say, "Okay, now it's time to do something else." It just increases the effectiveness so much more. And even if it's not with an app that's specifically designed like ours is for a parent and a child to do it together, as a parent, you sit down and use that app with your child. Like let's

[14:53] say it's a math app or something and you doing it with the child and watching them and interacting with them over it. One study said that that's children will learn 19 times more effectively when a parent is involved in the educational app than just a child doing it on their own. It's one of those things, you know, as technology progresses and as AI does get better. I think there's still going to be a place for for these kind of, you

[15:19] know, human connection via technology. And so it it's cool that in a landscape, as you said, of apps that are perfectly valid and do teach kids things on their own that there is a place for apps more focused around direct human connection. But really, really cool that you think that way and really cool to have built the product in that direction. I want to shift gears and talk through some of the experiments y'all run. you something you and I talked about in person at an event uh about a year ago and you've done so many interesting experiments that I think people will find fascinating. So, let's dive into some numbers. One

[15:57] experiment you talked about was a $6.99 versus $12.49 a month experiment, which is pretty dramatic, almost double the price. Why did you test it and what happened? So, when we launched this app, we started with a $699 a month price. The reason for that was because it seemed like a good number. We' done some research, but not a ton on, you know, what what the pricing should be. And so, I think this was right back in the day, right when Revenue Cat released the experiments feature, the first thing we

[16:31] did was we we want to test the price. And so, we experimented with a ton of different numbers. So, we went, you know, we first tested a lower price, $4.99, and we tested a bunch of different prices all the way up to $19.99 a month. And what we found was that $12.49, interestingly, had the the highest uh LTV lift. I think $14.99 had a slightly higher LTV, but it was really early on in our journey. And so we really were were conscious of balancing the reach, especially in the kid app space. Parents recommending things to other parents is huge. And so we weren't necessarily trying to ek every penny out of it. We

[17:15] can clearly get some some more value out of our users here, but we also want there to be a very broad audience that can continue to use the app and then recommend it to their friends. and so ended up at at 1249 and that's been the the base subscription price since then for the last probably two years or so. Have y'all continue to do look backs on that to make sure that the the higher price isn't turnurning at a higher rate that it ends up being a net negative in the long run. Yeah, we have. And so we've we've definitely seen that, you know, some of the higher prices have,

[17:46] you know, an initial boost in LTV, but long-term they don't they don't pan out. 1249 is still winning after, you know, multiple years of of looking back. Very cool. All right. Next experiment is monthly with trial versus monthly without trial. Tell me about it. We wanted to see if we could kind of push more users to annual pricing. And so we ran a test where, you know, we have monthly and then annuals at like a 50% discount. And so one cohort where they were getting monthly with a trial, annual with a trial, and then we were also, you know, monthly without a trial,

[18:25] trying to push people to more annual. And it did. We did see more people use the annual option, but ultimately long-term it didn't work out. It ended up with a 17% drop in realized LTV. And so that's something that we decided not to roll out to everyone. Do you have any hypothesis around why that failed? That's a great question. Users who are more likely to go the annual route are generally speaking higher quality users, right? They are already more convinced when they download the app that this is something that they're going to use. And the monthly users, I think, are the ones who are more hesitant. They don't know

[19:07] if this is going to work out long term. And so I think what happened was we got a bunch of people who were not willing to even do a free trial on an annual plan and they certainly weren't willing to pay for the monthly upfront. And so the reduction in users that we saw from folks trying, you know, not willing to do anything over the long term was a net negative. That's fascinating and I'm glad I asked that follow-up question because this is something that I feel like has become a little bit of an industry standard to not give a free trial on your monthly to push people to

[19:41] the annual. But this is an interesting counter example that if you're doing that because that's the industry standard now you might want to run the test and then you know maybe again being a higher price kind of more premium product maybe that's the differentiating factor where if your monthly is only $2.99 or you know something super low five or $4.99 you know maybe your results would be different but yeah really fascinating to think about it in that way and then another experiment you did around trial was to offer a 30-day

[20:12] money back guarantee instead of a trial. How did that go? Uh really well. Uh so that's one that we we haven't run that in the app. We've been running that on all of our our web funnels. And so instead of offering a trial, we have a big, you know, 30-day money back guarantee and we just ask them to pay

[20:28] upfront. And that has done really well. Obviously, it comes with much lower conversion rates, but because we're running paid ads to it, what it does is it gives better signal back to the ad networks. Specifically, most of our campaigns are are with meta. And so, when you're running a start trial campaign, you know, the signal is like all the people who are willing to start a trial, but not necessarily all the people who are willing to pay. And so, you're getting a mix of like, you know, high and low quality, high and low intent users. But when you have a purchaseonly funnel, every user that gets sent back to the ad network is one

[21:06] that's high intent, high quality. And so the algorithms are able to better find users just like that. And therefore, the reduction in conversion rate is made up for based on the higher quality users and they end up sticking around longer. And really, not many folks actually reach out for a refund. you know, the the friction of of doing that is probably a little too high and you have a really good product. If you're struggling with trial conversion and thinking of doing this money back guarantee, you may have a lot more people asking for that money back if

[21:41] your product isn't actually delivering. It seems like y'all already had very good trial conversion because you do have such a great product and that's maybe a part of why this works so well is because people don't regret making that purchase. How do you think about managing the different campaigns? So, it sounds like you have kind of a a somewhat isolated campaign that pushes people to this versus ones that push people to the app. Do you kind of multi-thread campaigns in order to kind of keep those goals separate and the the kind of destination separate? Yeah, we do. We have different ad set. Each ad

[22:19] set is pointing at a different funnel. our web campaigns, we have like our scan campaigns, we have campaigns we call prelander. And so like the different I would say kind of attribution methods are what separate our campaigns. But then within the like the webfunnel campaigns for instance, each ads set is pointing at a different funnel that may or may not have a trial, you know, running different experiments on those web funnels at different times. And so

[22:47] each one of those is a distinct ad. Gotcha. Yeah, it makes a lot of sense. And then what works in one ad set probably isn't going to work in the other. And by having this kind of multi-threaded approach, you are getting the best of the best for each different funnel that you've created. The next experiment I wanted to talk about was web to app. And it sounds like contrary to what a lot of folks are seeing in the industry, web to app. So I wanted to hear what experiments you've done on web

[23:14] to app and why you think it's working. You know, I was skeptical at first as well. I just kind of assumed that the friction of, you know, it's just so easy to open an app and you do an AP that doing a purchase on the web would just not work out that well. So what we wanted to to do is just see is this viable at all. So we took our existing inapp onboarding and just replicated it onetoone in a webfunnel and started sending some traffic to that and I think it was 50% better conversion to trial and then a 30% better conversion to paid than the same exact onboarding in the

[23:53] app which was just astounding to me that it worked so well. As we're recording this podcast, Revenue Cat had just released this week stats on our app to web experiment with our app Dipsy and we actually saw the opposite. Now, it's different because we're sending in from a payw wall inside the app to the web, but we saw a pretty big drop in conversion on the web to even starting a free trial. And we have not gotten the

[24:18] full data in yet for trial conversions. That's going to be really fascinating. I wonder if there is something to, you know, being a brand because I have heard of folks making it work, but I've also heard of so many people struggling to make web to app work. And, you know, there's probably multiple factors, but I can't help but think, you know, reading.com when you land there, it feels like there's like an authority

[24:42] there. There's there's a brand there. there's kind of trust that it's not some fly by night like child reading app.io or you know something like that. Yeah. I do you think that plays into it at all? Yeah, I think absolutely and I think too the I guess brandability right like it's really easy to remember and so we we definitely see based on the data that you know folks are seeing ads and then actually just going directly to the website not clicking on the ad. And so when you have an easy to remember domain like that that has this domain authority I absolutely think that that helps and

[25:20] that was a intentional strategy on our part. That's why we also have typing.com. And one of the future products that we're building is flashcards.com. And so we've invested in these domains because first was was SEO value and then second was just kind of this this brand authority that comes with it. And there's just an instant trust that's generated when you have a really solid domain. I'd love to to get maybe a little more insight on your onboarding, how you think about that, but I imagine this whole parent centered learning versus just kind of a digital nanny resonates with folks as well. Is that something you you mentioned in the

[25:55] onboarding or are there specific aspects of the onboarding that you've tested and feel like do help people resonate and help lead to that conversion, that higher conversion, especially on the web? That's one of the challenges that that we have with the app because there are lots of parents who really aren't willing to invest the time to sit down with their kid to to do that or they just don't really feel like they need to. They don't understand why it's important to do so. And so we spend a lot of effort trying to educate parents like I know it's inconvenient but this

[26:28] is really the best thing for your child. So we have, you know, different slides in our kind of onboarding setup that that kind of hint at that we when you get into the app, we have parent focused specific content that's explaining how the program works and why it's important for you to be involved. But we still get lots of cancellation messages saying, I

[26:50] shouldn't have to do this with my kid. Why can't the app just teach me or just teach my child on its own? And stuff like that. So, it is definitely um a more niche audience. When you do find someone who's willing to to do the work and really willing to engage, they're willing to pay more and they stick around longer. Yeah. Yeah, that's fascinating. Is there a specific aha moment, some kind of like goal that the onboarding is centered around? Yeah, that's a great question. It's it's something we internally argue about a lot. The structure of the app is there's 99 lessons that a parent and a child sit

[27:24] down together. In the context of those 99 lessons, there's 60 interactive story books. And what we found is that users who read a book are far more likely to stick around. The problem is, you know, we can't have a child read a book in their first lesson because they don't have the skills to do so. So, you don't

[27:44] get to that first book until lesson 10. And so it's like, yeah, well, of course, someone who's willing to do 10 lessons is very likely to stick around and do many more. We can't just like throw people at a book that their kid doesn't know how to read and expect, all right, that's our aha moment. Like, we got it. We nailed it. There goes activation rates. And so we're we're trying to figure out how do we, you know, create an maybe a book-like experience early on and so they can kind of catch like, oh, this is what my kid will be doing, capable of doing, and how do we, you

[28:18] know, bump that up to the first lesson or so. But certainly parents who actually make it to do sit down and do even just one lesson with their child tend to get it and tend to say like, "Oh, I see what's happening here and I love it." Yeah. So maybe that aha moment is the parent child connection. I did want to talk about uh something you're starting to experiment with and this is something I think more and more apps should experiment with and that's that

[28:43] you're offering inapp purchase upsells. So charging $9.99 for content that's already available via the subscription. But I I'm assuming this is for folks who maybe are hesitant subscription hesitant maybe is a way to put it. And how is that working out? It's working out quite well. We within the app, what we have is we call them printables. And so these are offline activities that parents can print and actually do. There's coloring sheets, there's little board games that you can play with your kid, and they all focus on different reading skills. And so this content is available in the app with a subscription. after they've made a purchase or started a trial, we give

[29:23] them an offer for, you know, $9.99 to purchase access to the PDFs all at once because otherwise the the PDFs are kind of like dripfed as you progress through the curriculum. You unlock the PDFs that your kid is ready for based on their lesson progression. And so we say, "Hey, you pay $9.99 and we'll just send you a link to honestly right now it's just a Google Drive folder that we send um people a link to and they're able to download the PDFs directly." And we found that about 20% of the users who are starting a trial or completing a purchase on the web are also opting in

[29:57] to purchase this this PDF upsell. Gotcha. Do you see a higher cancellation rate of the trial from people who who spend that? And so, you know, folks that you may not have been able to monetize anyway end up pay the $10 or or does it maybe even end up leading to higher retention because they see how great the PDFs are and kind of believe more in the product? Yeah, right now we only offer it to people who've actually completed

[30:23] their purchase or or started a trial. And so, I don't have the trial cancellation data right in front of me, but I I would imagine that if that's what we were seeing, we wouldn't still be doing it. And so, yeah, I've just seen that users continue to engage with the product and yeah, I think the printables are very high quality and they're fantastic and also kind of extends that experience. And I've been actually some of my friends that use Reading.com with their kids. It's always fun for me when I go over for dinner and I see, you know, the coloring sheets from Reading.com are kind of on the wall

[30:55] there. And so it kind of gives that like brand presence also in the home is just you've got this coloring sheet that's just always on your wall and so you see it and you think of it and offered a lot of value I think. Yeah, that's really cool. Um and then speaking of printables, another experiment and I know this is just getting off the ground and so we'll have to you know revisit it maybe in a couple of years to see how it goes, but you're expanding into physical products on Amazon. Why? Yeah, because it's it's time to become a new company again. We went from, you know, our B2B

[31:26] products to our B TOC product and now we'll start doing physical goods. Why not? We found that a lot of our users were requesting them to be honest. One of the things we encourage parents to do in between lessons is to reread the books and so give their their children additional practice reading these words and they're like, "Man, I wish there was a physical version of this book so I wouldn't necessarily have to have more screen time with my kid." And so after enough user kind of interest, we decided to to start looking into it. And hopefully within the next 6 to 8 weeks, we'll be selling sets of our books on on

[32:03] Amazon. And I think that at first it will be a really great LTV boost for the users who are already subscribed and want that additional content in the home. But I actually think based on some of the research that that I've been doing that it will also work the other way where we have folks that are looking for books online and uh there's a number of these different kind of sets of early childhood readers that you can buy and if we're able to generate enough on Amazon that it will actually become a a lead genen for the subscription app as well. And so yeah, we're really excited

[32:40] to to test that out and see how that goes. Yeah, I think that's such a fascinating strategy in that, you know, this is where a lot of consumer subscription is heading is that to expand LTV, something that kids apps do struggle with a lot is the kind of natural churn, which is another reason to kind of maximize LTV while you have a family's attention. But how do you think about that natural turn cycle and then how do you try and both increase the LTV which we've kind of already talked about but then also like expand the length of time that you're able to be a part of

[33:16] these famil family's lives. That's a certainly a unique challenge. The beauty and the problem of reading.com is that once your child knows how to read, they no longer need the app, right? So, you know, we succeed and we work ourselves out of a job. That is challenging. The app works really well for kids who are like age 3 to 8. For families with multiple children, we can certainly have a long lifespan there, but really the curriculum if you know if you start with your kid at at age three, it will probably be really challenging and you might be around a longer period of time because you're going to reach kind of

[33:51] these natural developmental breaks where there's a skill that the child just isn't quite ready for. And we've seen that people will just not open the app for six months, keep paying for it, and then, you know, start using it again six months down the road. And so the younger the child is typically the longer they stick around. For those older kids, it's harder because we have a placement assessment that will, you know, you can answer a couple of questions and it will kind of skip some of the more basic parts of the lessons. And you know, obviously at that point there's even

[34:24] less content for them to to go through. And so one of the things that we're we're focused on in addition to just general improvements to retain more users and improve engagement of the folks that are kind of still in the target window. We're going to be expanding our curriculum because right now the the app can take a child from not knowing their alphabet to reading at about an early second grade level. And there's no reason why we can't expand that to like an early third grade level because in third grade the way that children relate to reading fundamentally changes. They shift from learning to read to reading to learn. And so it

[35:03] becomes a lot less about the core skills of decoding words and more about comprehension, which is really that's kind of the holy grail of of reading apps because that continues for a really long time. Right now, Reading.com is one app, but there's no reason why it can't be a suite of apps that are specifically targeted at different stages of uh reading development all the way up to even, you know, we've talked about speedreading for adults, right? Like, so there's all sorts of different things that we could do with that under kind of the umbrella of reading.com. There are a few challenges I know you face as a kids

[35:37] app and I did want to dig into those. We actually get quite a few requests to have more kids apps on the podcast. For those in that niche, it's really hard. What are some of the things that you found especially challenging working in kids apps and all the laws and privacy and app store rules and everything else that you have to kind of work around that some folks not in the industry don't even realize? Uh yeah, certainly the the first challenge as a kids app in this space was the prevention of using thirdparty analytics. Uh so we were unable to use Amplitude or Google Analytics even um early on. We had to

[36:15] build our own firstparty analytics tool in order to really understand what was going on in in the app. And then we're able to kind of clean the data and an anonymize it and then kind of send it into Amplitude from there. But using just like the the out of the box SDK that a lot of these analytics tools have, you just you're not going to get through Apple review. And that's the same with a lot of advertising attribution products. Like there's a lot of tooling that's out there for mobile apps that we just can't use because Apple won't let us because it's for kids app. And I get it makes sense. It just

[36:48] means we have to get a little creative and find some ways to to get the information that that we're looking for. Like you mentioned earlier, the kind of the app to web thing that's that's going on right now. That would be something that we we haven't even seriously discussed testing it because as a for kids app when you redirect someone to the browser if they click on a link like even you know like a support link in the app for instance and you are taking them to the web browser you have to do what we call a grown-up gate which is just a challenge that a child couldn't

[37:19] realistically complete and so what we do is we print out letter or numbers right so it'll be 76 44 32 and there's a keypad and they have to you know hit those numbers. Obviously, these kids can't read, so they can't complete this challenge. But even as an adult, it's super frustrating. There's a lot of extra friction there. And so, if we wanted to redirect adults to the web in order to complete a purchase, I have to imagine we would just have such astronomical drop off because they just wouldn't be willing to do that grown-up gate. Makes sense. And, you know, this is where I'm constantly torn. And I

[37:52] think folks who listen to the podcast regularly hear the tension. As frustrated as we as an industry are at Apple at different times, as a parent, it's great to hear you say those things, you know, because like I don't want my kids data just hoovered up and and I actually really appreciate Apple Arcade. It's kind of a sleeper hit in my opinion in that I don't want my kids using those free-to-play manipulative games that are pushing them to buy more coins and to pester me on coins. And so I I don't let them download any game unless it's Apple Arcade and I know that they're not going

[38:26] to be seeing ads. I know that they're not going to be pressured into buying gems or whatever and those kind of things. So the tension between consumerfriendly and developer friendly is hard. There were a few other kind of interesting takes you had that I wanted to touch on before we wrap up. One of them I thought was super interesting is that you don't have any in-house marketing employees that you very

[38:46] intentionally worked with contractors. Why is that? Yeah. um as a really small company who can't afford a large marketing team. We've tried in the past to build an in-house marketing team, but your first few marketing hires generally need to be generalists because you can't afford to just have a channel expert on the full-time payroll. And you know the kind of the saying about jack of all trades, master of none is we've haven't had great success with uh marketing generalists. And so what we found to be super successful instead is just contracting with channel experts. They can do it in half the time an internal person can and your cost is lower. And

[39:30] so we have someone running meta ads. We have someone running Google ads. We had someone running Apple ads. We have a life cycle marketing campaign expert. Right? like we just have created this model where we just have like a suite of of experts that really know their stuff and can do it quickly and well and we just lean on them to to do what they do best and it's been beautiful. Do you manage that team or who internally supervises and and works across all those different channels? Because I imagine there does have to be kind of a cohesive top- down strategy to make all of that work. There is not a lot of

[40:11] management that we do because one of the other benefits of working with you know experts and kind of top of their field is that they don't require a lot of management you know and so we have them just integrated into our base camp and they basically file a weekly report saying like hey here's what happened over the last week here's some some of the numbers and the metrics and then every week I sit down with the founder and we go through those numbers and we go through those posts and we say okay

[40:38] how is this working how is that working? What what do we need to be paying attention to? What do we need to change? What do we need more information on? And we're able to really manage it that way. And so, it's been pretty straightforward and everyone is, you know, they're professionals. They're great at what they do and they they don't need a lot of handholding. I think that's a really fascinating way to work and it's something I have actually talked about on the podcast quite a few times. You know, I've had Marcus Burke on and Thomas Pati and Savon and Daffhne Tidman and there's a bunch of folks in the

[41:10] industry who are individual consultants who really are the top of their game. And one of the things I love too is that they work across so many different apps. And any one marketer, any one company might try something and form a hypothesis around why it worked, but if you don't get to try that same thing on five other apps, you might not realize why it actually worked. And so I think I think that is a fascinating way to work and you know maybe not everybody could pull it off but it sounds like it's working really well for you and really unique I think in the industry to

[41:41] operate that way. So it sounds like it's a great thing. Yeah. I mean it was actually uh you set us down this path when we first decided to use Revenue Cat as our payment provider. I think I you and I had a chat like office hours or anything. You actually introduced me to um Son from Growth Gems fame. We had some conversations and you know we brought him on as a consultant early on and he's still with us today and he's brought a lot of the other experts and like exactly like you said just his his expertise across all these different you know just paying attention to the

[42:12] subscription app space and being able to to talk with a lot of different folks about what's working and what's not. Even working with other clients you know has really been a tremendous value to us for sure. Yeah. Unfortunately, it is hard to replicate these days because all of those folks I mentioned handsel on are super busy and you know have a two-year long wait list that they multiple people would have to fire them in order for you to get to work with them today. But anything else you wanted to share as we wrapped up? I think that's it. Yeah, I'm just grateful for the opportunity and yeah, it's been it's

[42:47] been a fun ride. So, listen to the podcast for years. You know, we met at a number of events and so just excited that we uh you know, finally made it happen. Yeah, and thank you for coming on. You know, we don't often get to talk so specifically about experiments and the results of those experiments and the

[43:02] pricing decisions and things like that. So, thanks for for being willing to to share so much data on the podcast as well. Yeah, for sure. 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 to join our private community. [Music]

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