On this episode of the Sub Club podcast, Subscription App Trends

0:00[Music] [Applause] hey you're listening to the sub club podcast a show dedicated to the best practices for building and growing subscription app businesses we'll share insider secrets from the top subscription apps on the app stores let's get into the show hello everyone welcome to the subscription trends 2022 event i'm here with thomas pettit and eric sufert uh looks like we have a lot of people who've joined so i won't dilly dally too much but a little little housekeeping um this is our first time to host on uh livestorm new streaming platform for us there's a chat us hosts will probably have a hard time following the chat but we do have some

0:47revenue cap folks in the chat and then um if you have specific questions go ahead and drop them into the question section and we're going to try and get to those at the end so uh thomas and eric are going to try and talk a little faster we're all three of us tend to ramble a little bit so today we're going to try and be concise so we can leave some some room for questions but yeah with that let me uh let me do some intros uh thomas uh is a world-renowned mobile growth expert uh independent consultant uh anything else you want to say thomas no not much i'm thrilled to be here i

1:29specialize subscription topic of the day and yeah super glad to exchange with the two of you and eric sufer as well also independent and writes for mobile dev memo many of you probably read his work uh prolific writer i wish i could write a post every monday like he does if revenue cab wishes i would as well yeah welcome eric anything else you wanted to say i know happy to be here thomas you do like a one or two podcasts a week have you never upgraded your gear there what it sucks i've got a i've got a normal mic like one of those but yeah i'm gonna i'm gonna ask revenue cut to

2:08sponsor that you should yeah um all right so the topic of the day is uh trends for 2022. now uh thomas and eric both wrote uh fantastic post that's part of why uh we are hosting this event and decided to have both of them on many of you have probably already read the post and if you haven't they're they're both fantastic you can search you know 2022 mobile dev memo and and you'll find eric's post and then on the revenue cap blog uh thomas did a guest post for us with some of his 20 22 thoughts so today instead of completely rehashing those posts and just kind of

2:47talking through exactly what they had already written i'm going to try and kind of summarize some of what they discussed and then kind of ask them the questions that i was curious about when i read their post um so so we'll try this format and see if we can't move a little quicker that way versus kind of rehashing the entire post so what i want to kick off with which i think is one of the more interesting trends that we've seen and and eric is predicting this trend is going to continue to grow in 2022 and that's a term eric actually coined in 2021 is content fortresses

3:22so just a quick summary of eric's writing on the topic is that you know apple with app tracking transparency somewhat arbitrarily but somewhat ways self-servingly defines uh tracking as anything that is third-party data and so the interesting part about that is that the more data you can collect as a first party uh the more trent the more tracking you can enable so for example and he gave this example in his post uh facebook shops is a perfect way for facebook to have complete visibility from showing the ad to completion of transaction with 100 visibility 100 data collection so sending somebody out to a shopify store is very different uh from a data

4:10collection perspective than being able to keep them inside the content fortress and of course in 2021 we've seen some pretty big acquisitions on that front we saw a just acquired the mobile measurement provider microsoft just acquired a huge gaming studio take two acquired zynga so there's a a lot of consolidation building these content fortresses and again you can read more about eric's thinking on his blog but eric so i wanted to kick off with a question to you is that with this trend toward content fortresses what does it actually mean to mobile app developers how can they partner with what are they going to benefit from and then what's maybe like

4:53something they need to defend against or kind of watch out for with with this growth of mobile content fortresses yeah so i the idea of a content fortress is that you know you've got it's like an evolution of the walled garden right so like a walled garden is a platform or a property that sells owned and operated at inventory right and the idea there was i buy that inventory and drive users to my property right so it's like a way of like renting engagement from a bigger platform and why that doesn't work in this sort of new privacy environment and part of that is the result of att but but the

5:28winds have been blowing in this direction for a long time and they're going to continue to blow in this direction right the google is making moves around limiting the gaid and there are a number of bills that you know if passed would radically alter the sort of like mobile advertising or just the advertising landscape so like this privacy concern is driving things in this direction in a while for a while um but but the difference between a content fortress and a walled garden is well a walled garden and i come in and what it means to be a walled garden is that we've got inventory where you can only

5:56access it through our ad platform right like we put a big wall around our inventory and if you want to access it you got to pay us right there's no we don't work with like middlemen we don't work with ad tech vendors that sell our inventory on our behalf but but ultimately like the user clicks on an ad and they go somewhere else they leave that property and they go somewhere else right and the proposition there for the platform is like well we know they're going to come back we know we're just sort of like renting their engagement they're going to go to this property and

6:18make maybe they'll make a purchase maybe they'll start playing a mobile game or whatever but we know they'll always come back well you can't do that anymore with att you can't and you won't be able to do that with with a lot of the privacy changes that are coming and so what a content fortress does is it says look you're not going to be able to efficiently drive people to your independently operated property anymore why don't you take that property and operate it on top of our platform and if you do that when you buy ads from us the transaction happens within uh our purview within our

6:46line of sight we get to observe all those transactions all that engagement we get to keep the data that those those that engagement emits and we can use that data to optimize your ads in the future so it all happens kind of within our environment and you know the canonical example is facebook shops but there's any number of examples that you can point to any number of any number of ambitions that you can point to that that that uh were sort of outgrowth of very recent things like all this stuff is has been catalyzed by att um and so you know if you're an app developer what does that mean or if

7:19you're an ecom retailer what does that mean and i've been kind of predicting this for a long time i wrote a wrote a piece multi many years ago uh called the future of app mobile app stores and like what does it look like does it look like an actual store no my thesis there was it looks like a big platform saying hey you're better off operating in our app so why don't you do that you're not really independent anymore but what choice did you have anyway um and the example i gave was like what happened if uber absorbed uh you know some other service well they did that they absorbed a lot

7:48of other services and they allowed the uber app to to deliver that right and so you know things have been moving in that direction for a while just because of the competitive environment but now because the privacy environment independent app developers are are facing you know a real loss of efficiency in terms of driving people with these platforms to their own websites and so what do you do first of all if you're an indie developer of anything your valuation probably just took a hit because you're not able to grow like you were before right do you do you think we're gonna actually see some consolidation in apps as well

8:21you know like i iac is kind of a great example of the last you know five to ten years they've bought up a lot of apps and you know i i've talked to a few people inside iac over the years and they do coordinate quite a bit but they haven't always like pulled them all into one app store account and like share data across the multiple companies do you think we're going to see the rise of of app conglomerates that actually pull together multiple apps in the how great we lost eric i think we lost eric here live event i guess i guess what we what we've seen is like uh

8:57on the bigger player side um yeah i mean very very big player buying big player like thank to wenzinga or the microsoft example that you said at a smaller scale i don't know if the effects are there i mean i'm seeing a couple of apps that are instead of trying to grow from 20 million to 100 million do five times 20 million but then the effects that eric is mentioning that just don't happen at that scale like it's kind of it may make sense for other reasons uh but in terms of aggregating data it's just it's just not not not at the same level uh that would that would unlock those

9:34effects and i think it's a bit of a i wanted to say p in the ocean but that might be nothing [Laughter] well one of the one of the companies i have seen starting to make a move in this direction i don't i don't think it's necessarily data incentivized but reflectly has has been buying up quite a few apps in the space and kind of building this kind of mental health and fitness and kind of brand around the entire kind of core proposition of their original app um so yeah it will be interesting to see and eric so i was asking you the question as you dropped off do you think uh you know

10:07companies like reflectly that are starting to grow this kind of broader ensemble of apps do you think we're going to see more of that and even at a larger scale uh or do you think that's not something that's gonna gonna start to take hold in 2022 so so first of all i was almost done with my rant so i think uh we're it's okay to move on yeah i feel like that is maybe it's a strategy but it's that's hard to pull off right like i think what what we're going to see is and this always is the case you see these big platform policy changes it's

10:37going to benefit the biggest the biggest participants and so i think like yeah maybe reflectly can i don't know how big reflectly is right and and i hear a lot of great things about them so maybe they can execute this but it's really really hard to start from a much smaller like mau base and do like a roll-up strategy right usually you need to be like much bigger scale to pull that off so like it's it's like the people kind of in the middle um maybe some of them can roll up and become big uh probably what happens is a lot of them just end up losing uh losing

11:11momentum and then getting rolled up themselves yeah and i i think one of the more interesting trends there that i've been watching is apple um becoming their own uh app content fortress so it seems like they're kind of picking off the major kind of subscription app use cases one by one they made a big push in their weather app which that's a huge and i have a weather app so i pay attention to that closely uh fitness plus you know goes to head to head against one of the biggest categories of subscription apps in the app store um it's gonna be interesting to see music yeah um did you see that news plus

11:48and i mean it goes on podcasts the thing yesterday was like neil young uh the folk singer he he left spotify because of joe rogan and like the next day apple music had like uh had uh uh contracted him with like exclusive access yeah so so yeah it's gonna be interesting to see how google and apple play this because they're in some ways best position to actually go after you know all the kind of biggest use cases on the app store and apple's clearly headed that direction already for services revenue but then that brings us to the second topic that i want to ask thomas about um

12:27you know should apple be regulated you know they're competing head-to-head against spotify fitness plus is competing head-to-head against peloton and other apps in the app store you know between the epic lawsuit the open app markets app small app developer settlement i mean the list just goes on and on apple's being bombarded from every side uh and again thomas wrote extensively about this in the guest post you did on the revenue cat blog uh but i'd love to hear kind of where does a rubber meet the road in 2022 for app developers thomas what do you think we're actually going to see where do you think we're going to see

13:02meaningful impact it's like there's a lot of noise right now but there's not a lot of action so are we going to see action in 2022 and what's it going to mean for app developers i'm afraid we're not going to see like a meaningful action like worldwide on many points at the same time and the problem for regulators is there's so many different aspects that they have to look into and at the moment a lot of the conversation has focused on on third party payments and the fee and on that particular topic i think absolutely nothing is going to happen because apple is going to push back

13:35because it's going to take a while at the moment what we've seen is very localized a little thing here in south korea and then just the dating apps in the netherlands i remember on mobile dev memo somebody joking like what's next productivity app in the vatican like and i think here like it's kind of the the okay third third party payment may be a thing for a bunch of developers and the fee may look high for a number of business where it doesn't make sense but for most developers this is pretty relevant because iep are efficient and even if they're allowed to i don't think a lot are gonna do it just because the

14:16the difference in cost is not gonna be justifiable and i i don't think we're gonna see huge maybe huge change in terms of regulation but not huge change in terms of how user pay normal developers this this would be a huge bridge if suddenly the biggest one the biggest revenue driver which are gaming apps could start building their own and maybe it would have a den but that's the one thing they're going to resist that's why apple uh lower down to uh to 15 for subscription only because it doesn't hurt them that much and that's why they're opening here and there but i don't think we're gonna see massive

14:54change here and in all of this there was conversation on on side loading like allowing you to install from third party which i don't think is gonna be as easy it's a load on the google play try to do it it's nightmare so nobody does it and in the meantime the conversation on how the platform actually competes with developer with like fitness plus and apple music and news and so on just doesn't happen and i think here there's a much bigger bridge in a sense because okay the platform has a lot of control but as soon as the platform is also a developer in a way it's kind of directly

15:28threatening for for the developers and i haven't seen that conversation happen at all at the moment spotify kind of brings that up a lot but but we haven't seen enough actual action on that kind of stuff eric what do you think do you agree with thomas do you think we're going to see much impact in 2022 it's it's hard to say i i think you don't see anything meaningful unless the u.s steps in and i don't know that there's a lot of like political willingness to do that um i do think maybe you see the the the eu is probably more likely uh of a sort of

16:04governing body or the ec rather to to to make a decision there like but you know the spotify uh lawsuit predates the epic lawsuit right and like they ruled on it but they didn't really issue a judgment and so we'll see what happens there i i don't know it's just hard to say i think the way that apple is playing is now is like we go geo by geo we go category by category and we make it so difficult for you to even uh embrace these options that we make available to you that you're just going to revert to the defaults right like the thing about

16:33what's really frustrating about the the dutch ruling is that apple said okay fine we'll let you do alternative payments but you've got to upload a dutch store exclusive sku who's going to do that no one's going to maintain a an app skew and then a separate one for just the dutch app store which probably represents 0.5 percent of revenues or something like there's just no way now the dutch regulator did push back and they find them and so they're going to find them every week until they actually comply but that fine is nothing and that's just like a fly buzzing around apple's ear it's it's not even irritating um so i

17:06don't i don't see any real movement there my sense is that like if you're an app developer you should be planning on paying the full platform fee and utilizing the native app store systems for a long time unless you want to unless you want to really try to build out in the direction of the web and build a real workflow around pushing people onto the web right and that means doing ua for the web that means communicating via email to get people on the web to try to get people to make their subscriptions on the web now that takes a lot of work as thomas will tell

17:34you and i think you know that that's probably a really interesting discussion to have but like how do you make that work it takes a ton of iterative testing it takes a big team it takes like a growth team it's not something that you know most you know one two three person developers can actually pull off yeah and and um to kind of bring us back in i think the most interesting thing we're learning from 2021 that that predicts what's going to happen in 2022 is that apple's going to fight tooth and nail so yeah so like you know it's a perfect point is that you know if

18:05you're if you're a big developer and have the resources in time to try these things you know more power to you and there are successful strategies on the web and win back campaigns to push people to the web instead of the app and you know then you can actually measure performance because you can do it in a more sophisticated way but it's just going to be hard and with apple pushing tooth and nail anything's starting to potentially come down geo by geo it's just going to introduce more and more complexity versus more and more simplicity for developers more regulatory burden than kind of regulatory creation of freedom among developers um

18:42so yeah apple apple fighting the way they have i think is is is in some ways a bad sign for the the ecosystem more broadly that they're they're putting up a fight versus kind of starting to make some concessions in the direction of of uh making things easier on developers but with that i did want to shift to break out app category so thomas uh had a great section in that guest post about uh apps that he thinks are going to kind of break out and kind of trends happening in 2022 uh yeah i'd love for you to step through that thomas tell us about some of those

19:19app categories you think are going to do well this year well that was a bit of a risky bet you know i don't know what's going to happen but uh in some spaces i i see kind of the evolution and i try to sort by by big blocks and like kind of health of fitness is one i was very involved in and i was lucky to take kind of the first wave when suddenly all the fitness app like had a big boom and i was just in the right place at the right time and like oh yeah i can do workouts based on my mobile and and it's been

19:50fairly growing big in 2016 17 i'd say and then suddenly you see another wave come comes and in maybe 18 and 19 it was like a lot more uh focus on on meditation and the space the whole category was mostly like okay first fitness then meditation and now it's very exciting because we're starting seeing like a very innovative product that are not as simple and i think like those waves they keep going at the time rift for example i believe reflectly couldn't have grown that much if before headspace and calm didn't open up an adjacent space to theirs they're not doing the same thing but they kind of

20:31open up the next wave one thing i'm slightly worried about here is those wave they tend to go more niche which means there's a lot of business to open for indie developers and small size company but a lot of the ideas i'm seeing coming now i'm not sure they're gonna be a billion dollar company like and it's fine it's just you have from the get-go i'm more worried for some investment that things that some very niche mental health or whatever mental health is huge but the approach that we start seeing are more and more niche and i'm not sure those are gonna be billion dollar company but it can be

21:10very viable business for one five ten fifty people uh no problem and so a few of them were around um around sleep a lot of them around the workspace as well and um in the sense that a man also was covered the way we work has changed a lot and there's a lot of like a little bit of a merger between b2c and b2b in that sense um maybe it's not a huge job but i think it was kind of relevant that alan a french startup that works around social benefits for worker acquired uh reflected competitor jour and to integrate it within their services i think that was kind of a very

21:50interesting move uh among others but yeah i'm i'm not sure we're gonna see another calm in those subspace there's just so many of those subspace like professional development i mentioned an app called bunch bunch uh ai in there um and the app is fantastic like it's it's amazing like in in a way like in personal development kind of blinkist open the way for a lot of new products that i'm i'm seeing now in that space so so that's one if i look at productivity in in particular something a little bit similar happened like first it was like okay i'm normal photo editors like general generic photo

22:29editors uh basically doing photoshop on your mobile in in a simplistic way in a more simple way and then now what we're seeing is a lot of the space is gearing towards creator how to make better tick tocks how to make more professional stories uh because there's a huge demand on that in a category that is not only at a personal level but also at a semi-professional level like not not multi-million dollar youtubers but actually a lot of mid-sized influencers that want to grow professionally and and that those apps gears to work so it's kind of uh also a blurring line between between b2b and b2c here lots of uh apps

23:10targeting small businesses and and individuals and i'm seeing a lot of innovation in that particular space in in photo and video editing capcat is going crazy and and i think they're going to drag behind them 20 medium-sized apps that are going to grow 20 or 50 million a year but none of them might become a billion dollar company and maybe capcat is going to be the only one i don't know or tick tock is just going to buy them out and that's it and what do you think is going to happen in uh web 3 and crypto in 2022 kind of a a big topic uh every everybody's talking

23:44about it uh at the end of 2021 uh and with with crypto crashing a bit the past few weeks do you think that's going to kind of put a wet blanket on on all the hype no i don't think so like i mean the price of crypto is doomed to go up and down like the fluctuation is part of it and now it's it took a little bit of a crash maybe there's a much bigger one coming i have no idea i was just mentioning this category because i think at the moment for for very understandable reason like kind of this whole development has been done entirely

24:15outside of of the app world and i i see that something limiting adoption going mainstream is ux of all this product uh in web3 is generally terrible like it's a lot of product made by developer for developers but without without like the accessibility that that uh that that grandma needs to to start using it and i think the mobile because it's so personal and everybody has it is the way to open it up in some sector it's going to be blocked just because you can't transact a crypto so easily and the platforms are not going to be too happy with that they're mostly blocking a lot of them yes you can use

24:58con base and there's an open c app but there's a lot of usage that they want to know i still think that there are a lot of of things to open up in that space where you don't need to transact to actually unlock the the benefit of that and and it will it will benefit web3 in the way that this is what can allow adoption to really saw beyond the because right now everybody's talking about it but if you look at the the the people really involved in it it's actually a very small small amount of people and it was more wishful thinking that if a few

25:31innovative apps come there that can really change the game for for web3 in the sense that normal people will start having real usage and won't be only speculative or only uh developer minded application um so hopefully yeah we we need to see that breakout app in 2022 or yeah i think it's gonna continue to kind of flounder and be more hype than than delivery um i see there's a lot of chatter in the in the chat more focused on how to grow uh and so 27 minutes into the uh webinar let's uh switch gears and start talking more kind of rubber meets the road of like what do you know all

26:16this stuff is going on so many changes like how do we actually adapt our businesses in 2022 and with that i wanted to start with you eric um one of the things you talked about in your post is the battle for measurement authority and i i found that really fascinating um you know a lot of people have talked about even pre-att uh you know mmps self-attributing networks like there was a there was already a battle for measurement like it was not as accurate as people pretended it was uh but now we're moving into a place where not only is it not accurate as people want to think it

26:52is but it's just hard to do period and your point was that you know we're going to have you know facebook coming out with one solution and claiming installs and we're going to have google coming out with other solutions and there's going to be a battle for whose source of truth that are we going to use and we i don't want to rehash that thinking here but i would love to hear from you how do developers and then especially developers in kind of an earlier stage where they don't necessarily have the kind of volume and the budgets to um to explore at scale how do we find a way to like

27:28somewhat reasonably accurately in some vague way measure roads yeah so i mean i think you've got to think about those groups um like as being very distinct from each other and and the strategies are very different right so like i think if i was launching a subscription app today it was just me right let's say i developed it myself um for growth i would be just very focused on like what i think my most viable channel is probably facebook right i would be driving as much traffic as i can to the web and trying to wrap my arms around that as much as i can right

28:04because everything you send to the app store now is going to be mostly like muddied right in terms of what you can measure and what you can push into a model right so i would be trying to drive everything to the web using only facebook right and i feel like i would just start there and if i felt confident that i was i had very uh clear and sort of like systematic uh uh growth that was that was kind of informed by my model then i would start thinking about expanding from there right because you can't with the problem is now you can't really rely on these ad

28:36tech partners that are supposed to do this for you just can't they're not doing it uh in a way that best serves your interest right and i'm talking about like mmps and i'm talking about many of the other kind of ad tech solutions right so i would be just trying to do this myself using one channel simplified as much as possible drive as much as i can to the web try to capture as much information as i can from the user on the web and then push them into the app and i feel like if i could manage that workflow and i felt confident that that that that my model

29:04was reflective of reality then start to grow diversify in other channels start trying to drive people to the app store but i feel like that's where i would start and that's what i would try to master and perfect before i got any before i did anything else and you could do the one person can do that like one person can manage that now the the website is you you might you know outsource a team to just do the create the content and create the onboarding because you're going to want to test that a lot um but i feel like if you're able to do that you're able to get people through a web

29:30on board and you're able to capture a lot of data about them and then push them to the app that's like that's like fairly transparent uh measurability but if you're trying to push people to the app store without any of the the tools that like the bigger teams have you're just you're never going to be measuring that correctly now once you get into like a medium-sized company then you start thinking about okay we're going to do incrementality testing um we're going to do you know survey how did you hear about us when you hit the apps that we can kind of try to we can try to triangulate like the source of

29:57the users but all that stuff takes people it takes analysts right it takes models and it's hard to do with you know one person show so i think like if i was a one one-person developer building a subscription app i that that measurement i would manage it that way because again with if you drive people to the web you have utms right that doesn't go away so you still capture a lot of that information then you get their email address right away they potentially subscribe right away you can do a lot of things that allow you to like close a loop that doesn't violate att right and and keep in mind all this

30:26stuff is coming to android too no one's talking about it but it's all coming to android it's gonna be slower it's gonna be less extreme but in three years android's gonna look like apple looked like right before att which was a high penetration of lat on right which made the sort of mmp claims such an egregious farce right you had almost 50 percent of people in the u.s that had had lat on so what were the mmps doing but anyway um i think the other thing that i would be doing if i was um a one-person subscription app developers i'd be testing pricing rigorously right and i'd be really trying to think what's

30:58the optimal price and what's the optimal subscription length to keep people engaged because really your goal as a subscription app and like any kind of sas business right like the the model is kind of the same you've got to compound subscribed users you just have to make that compound over time that means you have to retain those subscriptions so if you're doing a one-year subscription your most important metric is year two renewals right if you're doing a three month subscription your most important uh metric is you know month four renewals that that has to be the core focus making sure that you retain those people and pricing plays a lot into that

31:28but also like the content journey like what content is available why should they stick around do they get everything you need in the first three months right all that kind of stuff is super important and the way you do that the way you bake in a lot of that retention is with social features that that that that make the app really sticky and then make the content fresh yeah and then so so i kind of framed the question around you know small and growing developers but we do have some some fairly large apps and and people who work with fairly large apps tuning in what's your advice to to apps that are

31:56doing a million to five million dollars a month in revenue and have the budgets and the people is there anything that they that you're hearing from the people you talk to or seeing with your own consulting of of things that are working right now for bigger apps you've got to get them you've got to build the measurement apparatus you can't depend on mmps anymore you've got if you're going to be using you know multiple channels at scale you've got to do the measurement yourself it's hard you've got to build the tools to do that right and that's doing incrementality testing media mixed modeling having these kind of probabilistic models that

32:28give you some sense of clarity around which channels are providing the best users right and and that's hard it's just a lot of work and it takes a team um but it's super important because you know you outsourced that to the mmps before well they weren't they weren't really doing a good job of it right but now they can't do the job at all um and so it's it's the onus is on you to do that do you think the mmps and other solutions are going to help bridge that gap or do you think it's a gap that that the technology has to be so tailored to the individual app and an

32:59understanding of that individual app that it's not going to actually work as a software as a service as it has in the past no you could build those i mean those tools could be you know platform tools i mean that's what that's what i was talking about the blog post i think uh facebook's gonna offer these kind of tools right right um but you know they're gonna work best if you only work with facebook or the vast majority of your spend goes into facebook you know what i mean and i wouldn't trust a tool like that offered by facebook that's the problem there's there's a bias there

33:25right um i think but i i'm shocked that the mmps aren't pushing into this space they're trying to cling to this they're trying to claim to the status quo like even a clean room is not recognizing what the future looks like the clean room is not a robust solution a clean room will not be allowed it won't be able to operate once you lose the ip address the clean room is not gonna it's not gonna function like i really don't understand why they're just clinging to the status quo and this idea of deterministic user level attribution or even now they call it probabilistic user level attribution that's not going

33:56to fly it's not going to work it's not future proof yeah and thomas yeah i mean i i agree here that for me it's a bit of a surprise that they haven't jumped onto okay how can we become the standard for media mix modeling or incremental if i was leading adjust or branch or absorb right now what i'd do is i'd snap a company like incremental or metric works and or build it internally which maybe they are but they're not selling it yet because it's the continuation of it and it's going this way anyway and not everybody can or won't build this this internally if i

34:33take one one example of a mid-size app like like you say we did build this in-house took us 18 months to get to first active actionable results of course if i have a sas that package it uh the time i would have saved on that and plus those engineers and data people that i have working on that i have other things to to get them to work on it's just there was nothing in the market that was that was good enough like i'm not saying building your own is not is not good i'm saying there is definitely a space there and it's surprising not to see mnp go

35:10towards it because it's completely aligned with the mission they were fulfilling um until until there then not thinking about vendors but thinking about the developers themselves you have to be aware that it doesn't fully replace it this new reality is never going to be the same as before and that the result that media mix modeling can give you or that incremental incrementality model can give you they're not they're just not the same level of granularity they're not the same level of confidence and you have to live in a world that is more blurry this is just the way it is but i'd rather see in 2d with one eye than being

35:50completely blind like it's a no-brainer so we're not going to have 3d vision which was a bit of a fake 3d division like eric said but at least i i want to triangulate this reality in different ways and in in this particular case that i mentioned where we built our own media mix model we also have a provider for incrementality that is a that is a sas that we're paying for because the two things answer slightly different methodologies and they help us raise a little bit confidence when we see that different models are pointing towards the same direction yeah you know just to piggyback on your comment um you

36:27know the the the biggest issue like first of all i don't think the mps can build this stuff i just don't think they can like they have they they were they they're not product led companies right they're sales led they've got kind of commodity tech um i think the other thing though that you see is like it's it's like okay you build a media mix model and even if it's working you you still have to adapt to a lot of the a lot of the changes that att uh created right and the the biggest issue that i see a lot of i would say mid-size and and smaller right so

36:58one-person shops but also you know medium-sized companies that are spending a decent amount of money is like the whole creative paradigm change like you can't it's not just spray and pray anymore right like that was the idea i just create a ton of different stuff and try everything um and facebook will figure out what works well that doesn't work that can't happen anymore because of the restrictions with att and so you know my sense is like there was a reliance i think pre-att on like this creative outsourcing companies right like agencies that do all your creative for you and that's why they were so valuable because well how are you gonna

37:25do all that credit yourself and they can they can pump out 200 pieces of creative every week and you can do the spray and pray thing well now you've got to be a lot more thoughtful and a lot more considerate about what what you're building right because you don't you can't deploy 200 crates a week you just can't you can employ like 10 or 20 maybe um and so you and so they have to be like like conceptually very distinct right you can't just be doing iterations on the same thing um to see like hey does the blue background generate more uh higher click-through and better rows than the green

37:55background or you know the the character has or whatever like um you know blue hair versus yellow hair you've got to be just much more sort of distinctive and and radical with the differences between the creatives and so that to me means well maybe you don't use these outsource shops anymore maybe you really do have to ins you know in source that or in-house it uh uh or you know have like kind of dedicated freelancers to doing that because it also requires a lot more knowledge of the product right because a lot of these creative shops the dirty secret is a lot of these creative shops

38:23had templates and they gave you the same ads they were giving to your competitor right and like you never knew that because there were so many ads right how would you ever even see the chances of you seeing that are very low but they would give you that you know they would change it they would change a little bit it's not the exact same they would make it you know they would sort of make it a little bit bespoke to you but the general template was the same and so that was a big problem because you were just competing with like basically the same content against a company that made

38:50an app that was you know very similar to yours and so you're just driving up each other's prices and you're zeroing in on the ads that work for each other and so there was kind of like a death spiral in terms of prices right well you you can't do that anymore you've got to build this stuff yourself and it's got to really be informed by deep knowledge of your product yeah i'm going to bounce a little on that i agree i agree with that it's just because i saw in the chat that a bunch of people were talking about look alike and is this the return of

39:17interest targeting on facebook what i believe is that this interest actually never works at all and that the look-alikes they are also slightly not like damaged let's say they're not as efficient as they use but then that's where you have to approach like creative is the targeting the way you the way you target audiences is by actually crafting the the targeting into the into the ad itself and and facebook still has like first party data on engagement on the ad and click-through rate and view rate that shows them oh yeah they said it looks like these people like it and that's how you're gonna do a lot of the targeting

39:57which is another reason to bring it uh more in-house because you'd have to work for a very long time with an agency for them to understand that deep level of of user persona and on how your product is different um but i think that's a good way of thinking about it like that the creative is the targeting right now yeah and um a lot of the questions that we we have in the in the question section is actually hit the next few topics i i wanted to cover so uh with that let's go ahead and shift to uh to start to take questions and i want

40:30to kick it off with um karthik's question with 18 t with att can paid ads still work for small startups what platforms and methods for running ads do you think will still work um so eric you already kind of talked about this a little bit and then i was actually really interested in in how you were talking about resisting the temptation of brand centric thinking so so in response to att there has been a lot of talk about you know just just spray and prey on brand advertising kind of stuff and don't worry about measurement and just you know get the message out there um so

41:09so first i'd love you for you to just kind of touch on on why you think people apps still need to do the hard work of making direct response advertising work and then piggybacking on that um are there some high leverage organic channels brand marketing that you do think can complement the the direct response advertising yeah i think people get confused when they talk about brand or they confuse the term brand marketing for for what for what it is right brand marketing doesn't mean just like unmeasured uh spend right like like spend where there's zero follow-up on on what the result of that was right like

41:51there's direct response marketing which is i show someone an ad i expect them to do something or i hope that they do something immediately after seeing it there's performance marketing uh which is more of a mentality it's more of a mindset it's like i spend money and i've got some sort of model that evaluates uh that spend and there's brand marketing which is the the the purpose of the advertisement is to is to sort of build some sort of association in the person's brain so they make a purchase at some point in the future right and the direct response in the brand should always uh sit under that umbrella of

42:23performance marketing there's no there's no non-performance marketing there's no opposite of performance marketing like brand marketing is a is a distinct tactic from direct response but they're both performance marketing like there's no such thing as like non-performing marketing because you wouldn't hire someone to do that right so i think if you're doing brand you've got to understand what you're actually trying to achieve and what you're trying to achieve is that if you have a digital product the next time someone sees an ad for it they click on it or they're more likely to click on it than they would have been if they hadn't seen your brand ad the

42:52brand ad should create this sort of like ambient pool of recognition in the user's brain so that hey i remember i remember seeing an ad for that product that looks pretty cool i remember i remember thinking when i saw the ad for that product i should check that out i didn't go to the app store and download it because i'm busy and i got stuff going on but now that i see the ad and i can just very easily access that product by clicking on it i'm really happy that i did right it should the brand marketing should elevate the performance of the direct response right and what

43:16what what worries me in this environment is you get a lot of people that come from like big brand agencies or they come from big brands and they they don't they never worked on digital products right they worked for brands they were for cpg brands right and so they don't really grok that that that sort of um you know fundamental difference between i'm trying to sell a brand that you're going to see in a shopping environment when i go to the grocery store and i'm primed to buy stuff like i've built that association the user's brain so i don't have to follow up with showing them an

43:49ad because they're going to go to the grocery store they're going to go to best buy or whatever and they're going to go to amazon and they're going to see my thing but if you're an app the idea that someone's going to see your product without prompting them first with an ad is insane no one goes to the app store and just browses around you go to barnes and noble and you browse around you go to amazon and you browse around you don't do that with the app store you don't go to the app store you only go to the app store after you've clicked an ad right and so that

44:14that brand thinking just sort of poisons the sort of marketing um mentality at these companies and the problem is it's almost like you know it's it's non-falsifiable a brand person comes in and say oh no we're gonna do all these brand cameras we do tv we're gonna do podcasts we need radio we don't need a we don't need a model because well well it's just gonna remind people about the product they'll go seek it out they say no they don't that's not a behavior on the app store it's not a behavior on mobile people don't seek out stuff on the app store they know they don't open

44:40the app store and on a day-to-day basis no one just opens the app store let's see what for sale today not in the same way you do when you go to the grocery store right and so but the thing is like that magical thinking is so intoxicating to ceos because what choice do they have it's like we don't want to do the hard work of building a medium mixed model we don't want to do the hard work of hiring five analysts and and for you know ua experts and and tying this all together with like you know a statistical foundation this guy says we can grow our

45:07audience by running on tv and we'll and i can i can brag to my friends that my company's on tv right now isn't that cooler than having this team of people that speak a totally different language to me running kind of you know running sort of independently um so i just i i worry when you know we come into this environment that like a lot of people are gonna be um i don't say duped but it's just gonna be like the brand idea is gonna be way more appealing than it was right and now so i'll counter this because i can already hear people in the eye and say

45:36no that's not true eric people do search the app store but i think what what you're trying to say is that at scale people aren't browsing the app store and i see that like when my apps have been featured in the last few years it's nothing like it was in 2010 2011 2012 where people really were going to the app store like hey let me see what's new people still are but not at the kind of scale that's meaningful enough to build a business around similarly and this is this is you know advice thomas and i both give to to anybody who asks is that you know when

46:06you're first starting out app store search ads are some of the best paid marketing that you can do and so so i want to try and fully answer this question can paydad still work for small startups so part of my answer would be start with app store search ads because there is really high intent when somebody does actually open the app store and search you know weather app or you know get fit or whatever but to eric's point that doesn't scale like that happens but it happens at a much smaller scale you can't buy your way to a large app with app store search ads it's a great channel for the for what

46:43however much you can scale it up to but it's it's just not going to scale big so any other advice eric as we wrap up the answer this question of of how smaller apps should be thinking about um making paid marketing work instead of just trying to to find organic channels or or just trying to get the name out there well one thing i point out is yeah sure there's there's some people do search right some people do open up the app store and they search right of course um but that's a there's a fixed volume of that search exactly right that doesn't really grow over time

47:14right what what so that's not a scale channel like you'll you could saturate that and then what right and and the thing is like when i see scaled companies spending let's say i don't know two million plus a month um app store search is like two to five percent of spend it doesn't scale it oh it only shrinks as you grow the as you grow the spend because there's a fixed number of people searching every day right you can't grow that right um but yeah i mean i think um yeah i i i would just like i i would really hammer on this idea of like i

47:43would push i would try i would try to be pushing people to the web and capturing as much data as i can right not just not just like first party you know identifiers right like email or whatever but trying to catch as much intent from the user as possible what do they want to get out of your app right because if you can if anything you can do to sort of like and you have way more you know way more opportunity to sort of personalize the experience on the on the web than you do on the app right because if you want a personalized experience on the app you've got to

48:09develop all of that it's in and if you want to like do any sort of like personalization it's a lot of work you got to update the app every time you want to change something for the most part um with the web it's super easy to make a change to a website right and so you just have a lot more uh flexibility there and i think it's just a way better way to onboard people um and then to to capture those really really high intent users and then drive them to the app yeah that makes a lot of sense um thomas this next one is for you and

48:35i'm actually really curious about your answer here uh for deaths that run one facebook aaa ad is it worth investing in an mmp and then i'll expand on that answer kind of where do you see mmps slotting in currently in kind of the the growth stack you know from a smaller app to a medium-sized app to a larger app at what point do you think slotting in an mmp and what level of sophistication of ad spend do you need that kind of tool yeah i i won't be as radical as eric like in some cases it does make sense to have one and i'm pretty sure actually

49:12most apps eric work we still have an mmp so there must be a reason they're paying them all but uh i guess when you when you're just barely starting like putting an mmp is not the first thing you need to do basically because you can operate the basic networks without one uh apple search ads as a as its own attribution that you can build uh facebook you can go just with just setting up your event through the sdk you know for scan google you can use with firebase all of this is free and it's not very complex technically to build you're not gonna take months to build them uh influencers

49:50you're just gonna extrapolate the results so i guess you can survive for actually a little while at the beginning then comes a time where i believe like the mmp still makes a lot of sense because then you expand to network where they do operate probabilistic attribution which is helpful because you may find the value for android and also because on on the on the web to website actually uh it is extremely helpful to have that done i mean you can build your own but uh i i don't know a lot of people who do they just rely on the mmp to do that and it makes a lot of sense it's technically

50:31legit or at least tolerated under att because it's your own media a user is on your website so you're crossing your own data towards the amp and in here you need a lot of like you want the granularity of okay that user is coming from that flow or that flow or that campaign and so on because then you can inject those utms into the app so at that point it does make a lot of sense in the very very early phase unless you make a strong bet from the get-go on the web and maybe you build yours it does make sense to have it but it's true that

51:03historically i would have put on mmp much earlier two three four years ago than i would do now uh there's still a moment that uh that i wanted at the moment because there's so many holes uh in in scad network and especially there's nothing for web to app which uh i think is a is a big problem so a lot of people have the mmp um for what to app for android for probabilistic printing and in some cases also for the for the double opt-in if if you have a att so there's still a number of reason to have it but if you're just starting it's not

51:39necessarily the first thing you need to do yeah and to piggyback on that because you you actually already started talking about it um and this is a this was actually a topic on eric's prediction as well um the question from us man some platforms developed probabilistic measurement models what do you think about probabilistic models is it reliable for 2022 or is it still on early stage so eric you have a lot of thoughts on this one give us the give us the two to three minute answer on uh probabilistic measurement in the future of it but did i say i mean i don't think i said you don't need an mp at all right i

52:17mean i think you need one right i mean you need you're going to be operating on android you need one so i wouldn't i wouldn't i wouldn't advocate for not getting an mmp i just want to be clear um yeah probably yeah so probabilistic measurement yes fingerprinting no right the problem is apple doesn't say what fingerprinting is and so the mmps ran with it right um what i don't think is going to be viable is what's happening now uh when i think about probabilistic measurement it's really like probabilistic not a fingerprint where you can say well it's probably this person uh because the fingerprints match right

52:48that's what that's what that's what probabilistic attribution looks like right now it's not you know using actual probability models which is probably what's that's the more forward you know forward-looking sort of like future-proof solution i i think the way that fingerprinting's being done right now is going to be shut down my my i have like let's say i'll call it i've 60 sort of uh certainty that apple is gonna restrict the access uh from apps ip addresses um with the next major release of ios and so you know by the end of the year it won't work so make hay while the sun's shining phase then just go ahead and use the

53:28probabilistic while while it's still fairly accurate well you don't have much choice but that's a problem it's not that accurate it ends up cannibalizing a lot of organics right and so yeah do it do it and rely on these ad networks that that are relying on the m ps for that i mean it it'll help you grow but understand that it's not future proof yeah all right moving on um uh and actually thomas i'd love to to get your perspective on this one and eric of course you can jump in i'll i'll try and give you opportunity to respond because that that was a an important

53:59clarification on the mmp but the next question is uh how do you suggest testing pricing rigorously so we you know eric you talked about that earlier but i wanted to start with thomas's thinking on on how do you price tests right now the the first thing i'd say about that is i think there are way too many people who test this like try to a b test it way too early when they don't have the cohort that is required and those things it kind of looks simple to put like okay i put a monthly here yearly here oh i put 50 a year and a hundred dollar a

54:33year they're so easy to screw up in design they're so easy to screw up in analysis but let's let's admit you do it right there are tools that are popping up or maybe you've got experience with that and you can do it this by no means as easy as it seems uh i'm working on that with a team that has like six people only on this and they still screw up once in a while you know in this time but let's say you pass that i mean the amount of of data you need to have relevant uh result that have statistically significant result is kind of big i mean

55:06i think at the moment we're taking roughly 400 pairs at the first renewals which means like a massive amount of users like dozens of thousands of users and there are a lot of people who try to test way too early um my answer here is in the if you're in this case don't take the test make radical choice go for it and if it does make a huge difference up and down you'll end up seeing it just because you have to release and move on you don't have the luxury to to go into the rabbit hole of this testing and there's so many things you can test in

55:43terms of the price the layout how many options the free trial is it seven days is it 14 days like it's just never ends so you have to take like extremely radical choice and i think a lot way too many people just just there is definitely benefits to get there and and you can at the beginning unlock twenty twenty thirty percent output just because you change your paywall but after you iterate it a little bit on that you realize that the gains they're incremental but they're like two three percent they're hard to measure and you realize that it's more of a whole change of experience that makes the

56:18like stop doing incremental and take big leaps into okay maybe i put the paywall as the first screen and at the end of the unbounding or not at all or choices of how much freemium and premium are you giving is a much better question than should i price 50 a year or 70 a year like the way you think through your strategy about about payroll is gonna it's gonna churn people more or less at the same time and it needs to be linked to typically do i have strong network effect i'm strava or i'm all trails or commute i have strong network effect you don't want

56:53this plus 10 percent output that are actually churning people because you depend on the activity of the rest of the user to to bring more and that's why you're seeing apps that have very very little network effect having extremely strong aggressive payables especially in the fitness space because they don't have any of this network effect and i think it's much especially early on it's much healthier to think about where you put the cursor in this strategy of premium premium than to iterate the hell out of your payroll i'm not saying they are not huge benefit there but but i'm i'm saying people are usually testing too early and too early and two

57:29small details test if you go and want to test okay go for it but do huge thing like not small things so eric one of the the things i've learned from you um is just how different different cohorts that you bring into an app are going to perform so for a small app that does some price testing early on makes a big change like thomas was saying they go from 20 to 40 and they see an amazing improvement but most of their traffic is coming from uh organic you know search it's a smaller cohort as they grow and start doing ads that price that was like exactly dialed in for that early

58:11traffic might not actually be the optimal price for for the traffic that they're buying as they grow what yeah what are your thoughts on price testing and then potentially how you evolve that over time and re-test some of your early assumptions as you expand your your marketing channels yeah i mean i think the the smaller the scale the larger you know the effect size is you should be testing for right so it's like and and i think there's two things to test it's not just the price point it's the duration of the subscription right um you know because that can play a big part right in renewal rate so you know

58:44if you've got a yearly subscription obviously the price should be bigger than if it's a quarterly or you know monthly um you know but you got to test those things in in a way that in a way that gives you like valid you know sort of data right or you know statistically valid data or statistically valid results actionable results and and so they just start big and move smaller as a scale grows right so you know at ten thousand dau you're probably looking at like yearly versus quarterly or something with like just big price differences that you're as you're at a hundred thousand uh dau then your your

59:17sub your you know you're testing within that yearly package you're testing within that monthly package or whatever different price points and then as you're at a million dau you can test kind of everything and um but i mean at some point especially with pricing you can't test forever it's not just something that you always leave on you should be looking to make a decision um but you know you get more sort of ability to go granular with with more scale and so i would just be thinking about at first like okay i'm going to test just different durations and maybe even keep the price the same right uh you

59:47know just to see which one people are which one improves conversions the best um and start there but like you you can you can get more granular as you get more scale because you'll get more users into each group and you'll have there's more likely statistically valid results yeah that's fantastic advice uh i'm gonna i'm gonna skip a few so so it's 1202 the the event was you know technically supposed to be over two minutes ago uh eric if you need to balance thomas if you need bounces feel free to just just drop off when you need to but i did want to try and answer a

1:00:16few more questions and this one i thought was particularly interesting because i just hear it come up over and over and over again and it's from ak any thoughts on affiliate marketing for utility apps which network to go with what to expect so uh thomas let's kick it off with you i mean you hear it all the time you know how do i do referrals you know our referrals going to work what you know what is affiliate marketing something that's a viable strategy to bootstrap it feels like everybody's asking these kind of questions so what are your thoughts to some extent if a referral can work

1:00:52when it's between from your users but uh in terms of affiliate i i've seen some people being successful on the web in the app world what i've seen is just like the amount of fraudulent traffic and nightmare you have to manage it's just never worth it uh i can't think of a single app that is uh small or medium that actually has a significant share of traffic coming from from affiliate or even even smaller i mean it's kind of weird that it never happened but um and there are companies out there i'm not saying they're all scams it's just they are trying to to also uh fight against it but it's just

1:01:34everyone i know who tried has just dropped that ball on mobile is just just a nightmare yeah the way i've i've come to think about it more and more is that um for the companies that do it and do it well it can be incredibly successful but as with almost anything it's hard to do right and so if you're going to spend the time and effort to build out the tools to invest in the strategy to find the affiliates are there potentially lower hanging fruit where you're going to get a better return for your investment of time and money and from what i've seen and as you said

1:02:14like there just aren't great examples of it working and like really blowing an app up i mean yeah you have the ubers with like referral marketing where where you have a twenty dollar you get twenty dollars free if you're for a friend and they get twenty dollars free it's like yeah those things work but they but it's also like they work at uberscale and so um so yeah i mean personally i think there's there's often for most apps there's just better places to spend your time and money especially early on in the app journey yeah that's that's also my point but i make a correction because i just

1:02:47remember now that the question was specifically for for predictability app yeah and uh in that space in some cases it might make sense but i wouldn't go and look for one other mobile affiliate network what i would look at is how do non-mobile productivity tools uh use affiliate something like i don't know appsumo where you where you discount 80 temporarily or something and just promote it there even though it's not made for nap i was just like use the mechanics that work for professional tools that are not apps and just go for it instead of looking for general mobile affiliate networks and then try to plug there so they still may

1:03:33in the case of productivity apps be some some particular cases that absolutely make sense but for most of the other verticals i would rather stay away and and work on on on other tactics that seems to be more uh efficient for many people they're always exceptional it's just in most cases yep we should probably start wrapping up let me see if i can um hit a few of these fast uh what's the average churn you are seeing for paying users after month one month two for utility apps part two any recent learnings from testing you may have done to reduce churn on trial paying users early on so i'll

1:04:16defer the answer on the first one so at revenuecat we just hired a data scientist and i am beyond myself excited to finally after two years of being at revenue cat uh start doing some benchmarking posts so uh no promises on when or or exactly how detailed they will be our data scientist is also working on other things and i can't uh steal all his time away from our product team immediately but we will be posting much more of this kind of thing to the blog and maybe even doing doing some events around kind of understanding benchmarking and stuff so i'm going to defer that question but i think this the

1:04:57second question is really interesting for you thomas any recent learnings from testing you may have done to reduce churn of uh trial and paying users early on so actually i think the two the two questions they're linked you know when you take one step in in isolation it's it's it's hard like to to understand what's what's happening overall and typically here let's say you've got an extremely high churn just after the payment so like kind of the first renewal is extremely low and much smaller whatever the benchmark is maybe it's because you force too many people into the payment in the first place so the the first thing you you

1:05:36like not the first thing but one thing i would look for is actually how aggressive i've been before like what kind of traffic i've pushed onto that step uh because maybe there's very little to do like because the traffic composition and the experience they had was so bad that you had to anticipate it and very often to improve a step you need to go to the step before one example that was kind of interesting last year and that a bunch of companies have adopted is uh what we call the blinkist paywall where basically you tell people you're going to notify them at the end of the free trial to try to

1:06:11improve the free trial to payment conversion and i think here once you add that step at the conversion step the biggest driver between first payment and uh first renewal is pushing people to use at least each time the the app or i i've done that what i call activities whatever your app is if it's meditation that they complete it through meditation if it's a workout that they completed three workouts if your photo editor that they shared three edited photos or something and you really need to push hard on that to improve payment rate uh if your app is good enough like because usually people turn because they don't

1:06:48use it so it's a lot of on boarding improvement so that people would actually realize these activities and habit forming and at some point push notification as well if you see somebody has completed two of them but it's not coming back and you know that the regular pace is twice a week you have to win them back once they're still there and typically if they still open the app but don't complete the the action uh move through in my message or remove some feature or be a lot more explicit about way too many times i see like apps that have many many features and people ask

1:07:23hey why don't they complete that one that is the main one it's because they're distracted like maybe made something simpler that drives people to do that action that is driving retention which in turn is driving renewal so maybe simplify a little bit the the app experience itself in-app messages like dynamic in-app messages are very efficient and eventually if they're already of the app a push notification would be a main driver but i guess my answer here is you're not going to convince people not to churn if they stop using the app so that's the only way well i don't have have much to add there so there's one question here that i'll

1:08:03take because i think this is a really fun question and something i think a lot about how viable is it really for solo app developers to earn a living in 2022 on the app store i've heard apps are dead etc which of course is not true but still it seems difficult to make a living off it with such a crowded app market i guess i need to learn marketing so uh that's a that's a fantastic question and my answer is that in some ways it's easier in 2020 to to make a living off of absent it ever has been but there are a few key points to make

1:08:39around this one is that and i'm not just saying this because i'm a revenue cat but i really do think that the subscription model has opened up the opportunity to for smaller niche apps to make enough money to make a living off of but that's that's kind of the key number one is that what you need to do is like don't go out and try to be the next headspace if you're if if your goal is to be the next headspace that's just a you're building a different product you need to start with some level of funding because yes you know competing and growing is going

1:09:11to be brutally hard but if you're a developer and you want to make a go at being an indie developer and and making a good living on the app store instead go the opposite direction go really really niche but in a niche that that people are willing to spend money and that people find valuable and we've talked about this on on the on the sub club podcast quite a bit if you haven't seen that uh subclub.com uh fishbrain uh we had the cmo on recently and and you know they're actually a huge app so this is not even solo uh developer kind of stuff but the fishing hobby people spend

1:09:50thousands tens of thousands of dollars on boats and trips and other stuff so if you're a solo developer looking to make a living right now go find a niche one where people are gonna find it valuable enough to spend money and then two where there is some form where you understand how you're gonna get attention for it don't don't go build an app and like have this if i build it they will come kind of mentality you need some level of built-in marketing so uh i think knitting apps is a really interesting example there's there's three or four uh good ones and and um there's one from uh

1:10:25this solo developer becky who i don't you know i don't think is is making a living from it yet or anything but it's a really interesting niche where if you can deliver enough value and if you can embed yourself in a knitting community and you know if you're part of a really big reddit forum where you're not pitching your app but you know you're asking for feedback or other things if if you can find a community a niche that has some level of built-in marketing that people are going to get excited about it they're going to share it on their knitting youtube channel they're going to share it on

1:10:57reddit they're going to tweet about it because you're just bringing so much value to this little tiny niche that's just underserved if you're going to make a go at being a successful indian 2022 i think that's the approach and yes you absolutely need to learn marketing and think about marketing from the very beginning it's that you have to you have to know how your app is going to get attention before you go build it i mean you know you you can throw things against the wall and hope they're going to stick but if you're going to spend six months building an app um you need to spend a

1:11:30month doing some market research really thinking about how you're going to get attention really kind of you know validating some of the ideas that people actually care that people are actually willing to spend money for it so with that i think that's a pretty good summary any any uh any follow-up there thomas yeah no i i i also believe there's still lots of opportunity and i'd say almost almost even more like because the big space are taken by big guys and and and it's not done but yeah you're not going to move at space and calm it goes more niche more niche and more niche but then

1:12:04vc back company they won't have the scale to make that niche go to the vc goal which open up a space for maybe not solo people company but small small teams to actually make a really good living out of it and and i think there's so many unexplored of this of this niche that we haven't think of and it's kind of exciting but then when we said you think about marketing probably that marketing is not going to send all your money to facebook you're going to have to be a bit more creative because that niche as a particular community that goes with it and and this is where

1:12:37you're gonna look for it it's not gonna be as simple as okay i'm just gonna put my money on facebook and it's gonna come back because the more it goes and the more facebook and google works for the bigger guys so you're gonna have to go specifically to your niche to go to your community and be super active on that reddit is on that subreddit or be inside and i don't know recruit the one influencer of that niche and and have him as an ambassador or something you're gonna basically have to embed yourself into the community of that niche which is a very different kind of

1:13:10marketing that just uh putting a hundred grand on facebook and see and see if 200 grams are coming back uh yeah i think for these niche apps uh marketing means the totally different things that it does for the for the bigger guys absolutely so we do need to to wrap up but i i we can't leave andy carvel's question just sitting there and he's a good friend so thomas i'll let you take this one uh which apps do you see doing really innovative stuff when it comes to subscriptions either in terms of paywalls bundling pricing or something else well one uh that that you mentioned so

1:13:46it comes to mind that is very interesting for me is is fish brain because they're they're they're having this this subscription model but that's just one part i mean first because they're community they can't push the payroll too hard otherwise they're going to churn a free user and they need the network effect so they can't go too hardcore but they complemented it with other business models that makes a lot of sense for them and of course if you're an angler you're going to need some some material some hardware at some point so i think for them it's like extremely uh natural to go towards hybrid model

1:14:22and i see going towards hybrid mode so in their case it's subscription and e-commerce but it can be other things can be subscription and ads can be subscription and non-renewables can be subscription and offline revenue maybe you're you're an amazon affiliate or whatever uh i see this as extremely interesting and and relatively under-tapped at the moment like most subscription app they're like yeah we have subscription that's it that's what we do and they don't they don't go a lot beyond them i i think we're going to see a lot more of of this example so uh fishbrain is one i'm mentioning a couple of others on on

1:14:56my post in the in the on the revenue cat blog another one was a fitness app sweat that is has bring this has built kind of this brand around around the their leader and so they can't sell branded goods around it and of course you can put a totally different market when you already have the audience hooked and convinced towards your brand that you would sell a random object so basically my answer here is i'm seeing relatively literally motivation in terms of it's not how you design your paywall or the pricing or you made that trick plus you have the tools that apple gives you and there are ways to to to bring

1:15:35them creatively but it's mostly for me complementing subscription with other modules that is that is the most innovative well i think that's a great great way to wrap up we talked about from the smallest apps of you know how do you potentially make it go in 2022 to don't think you're gonna make a lot of money on merch as a small app but for the larger apps uh are finding a lot of innovation in in diversifying um so yeah if you're a small app don't have six tiers of subscription and non-renewables and and all this kind of stuff but as apps grow there are opportunities to

1:16:10really diversify revenue and and i do think that's uh something we're going to see a lot of in 2022 is experimentation diversification and innovation in broadening the the monetization beyond just that 9.99 a month subscription so yeah with that wrap it up thank you thomas eric has has already left but uh really appreciate him joining us today um so and thank you guys for participating and uh for asking so many fantastic questions and uh sorry we weren't able to get to all the questions um we did almost go in an hour and a half um but uh we're going to be doing more of these sorts of things here at

1:16:50revenue cat so keep an eye out on on your email for for future events thank you to make sure you never miss an episode subscribe to the show and your favorite podcast player thanks so much for listening until next time [Music]