App Growth Strategy: Alex Ross, Gregarious, Inc. - Next-Level App Marketing Tips and Strategies

0:00the two steps in making a successful app business are make something worth using and then put it in front of the people who would use it if you have a plant and you don't know what to do with it we solved that problem so what we did is we reached out to a bunch of plant retailers hey we will help your customers have a positive outcome with your product can you put in our little qr code and now like when these retailers ship out a new plant every single one of them has this little qr code in it it led to our first 15 000 users i'd say

0:32[Music] 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 welcome to the sub club podcast i'm your host david bernard and with me as always jacob biden hello jacob happy to be here you sound incredibly happy that's great it's a friday david the sun is shining they're they're they're grilling a bunch of chickens in my hometown i got nothing to complain about it's gonna be great our guest today is alex ross founder and ceo at gregarious

1:09makers of greg an app to help you grow healthier and happier plants prior to founding gregarious alex spent four years as director of engineering at tinder alex also co-founded nplug a digital signage company that was acquired earlier this year here welcome to the podcast alex thank you guys good to see you thanks david jacob hi so i'm gonna try really hard this whole podcast to not call you greg but i've made that mistake i was thinking like i get like annoying company name questions sometimes i'm like i'm sure you get all way worse than me i'm considering just legally adopting greg as like a you know alias or something

1:48yeah you know that's a news cycle right there a little bit of earned pr yeah so i wanted to ask you um so obviously you know director of engineering at tinder that's i mean what a rocket ship that must have been quite a wild ride so um tell me a little bit about about how you ended up at tinder and then um you know if you do have any fun um war stories from there that'd be great to uh to hear yeah definitely it was a rocket ship uh definitely some some war stories some wins some losses uh so i came across tinder um i was

2:24looking to get into like a consumer application um so i was interviewing with uber and twitter and then i came across tinder on a angel list actually the head of recruiting at the time reached out to me and i kind of took it on a whim uh to be honest i had not used the app before before even interviewing or anything that's kind of a challenge for tinder is like do you how many of the teammates need to use tinder because a lot of people are married and in relationships and those are great people to have on the team and so it sounds kind of difficult or

2:55complicated um but basically i joined when it was around 70 people if i recall so it's a pretty small team there was already a global user base so it was one of the scrappiest global brands i think probably has ever existed because this was all right before tinder or right around the time that tinder launched its first monetization efforts and so there wasn't really awareness as to like great there's this like large global many millions of people are using this thing but is it gonna make money right that was still an open question um at the time that i joined um so yeah basically i joined and it was

3:34very um it was definitely still a startup uh and so there was not a lot of structure and uh i think my manager changed on the first day like the person i was actually working with desk changed and uh but i had a great time and um basically i ended up creating the growth team so i became very focused on um growing the international user base and uh one of the coolest things that that team did is we decoupled tinder from facebook and this was from facebook login because like tinder came to came to fame by having you know you tap one button it imports your facebook

4:09photos it basically made online dating as easy as it possibly can be because like you push a button you're in and then you're dating right and by making it that simple it made it so you felt less desperate by using it i think it's like one of the important uh psychological you know dynamics because if you feel like you have to work to start using that application then maybe it means that like you aren't having as much success dating in the real world and so by making it simpler it made it less stigmatized more cool right uh and so when we decided to then allow people to

4:45create accounts um with a phone number that introduced all this complexity around like well are people going to want to do that work um then they have to add profile photos they have to type in their name you have to introduce an onboarding process you have to worry about spam um so in any case my team led that decoupling of facebook and tinder and this was like pre-k analytica pre-gdpr so it was definitely prescient it was like it was a lot of good foresight and it did lead it was a very successful project um and so that was kind of what i cut my teeth on at tinder and then from there

5:18i ended up creating the trust and safety team so we then kind of took on anti-spam which is a major problem for any global consumer especially a brand that you're introducing people to each other like you're introducing strangers to each other mm-hmm that is a spammer's dream there's so much abuse on tinder so much of this

5:35it was oh it was staggering yeah 24 7. um and so we ended up creating a team kind of bottoms up this is a cool effort because it wasn't like an executive said like oh tinder needs to needs to create this team but rather is a collection of engineers that were very motivated to solve this problem and so we created a trust and safety team again before before gdpr like this was before the world was really focused on um privacy and and data security and protecting users very consciously it's interesting because now um you know i think even with like clubhouse recently had had issues here i think now

6:08the expectation is you need trust and safety from day one yeah even five or six years ago wasn't really the case it was kind of like well just grow and then you'll solve it later um so that was i would say early days for even that concept of like a whole dedicated team this aspect yeah if you're meeting people in public my god like you need good safety features yeah you really need to completely try to protect people because there are there's a rare selection of people that are not great right so yeah so then tell us a little bit about the the transition from being a tender to

6:42founding a company because you've founded companies before and plug um and bennett um other large companies before tinder but yeah what what led you to uh to found gregarious yeah i actually saw jacob and i shared an experience interning at cisco systems is that right yeah

7:08internal auditing um it was crazy i was on a team that like investigated other people for for like uh you know abusing their corporate cards and stuff like that so there'd be like interesting internally internally yeah it was a very they've had interns on that team right now this is definitely the only yeah wow i was testing uh i was testing phones so i'm actually not sure which one of those is more boring so that's it that's a tie that's a tie for sure um yeah so i got exposure cisco is interesting for anybody who doesn't know because you have to drive between meetings right because the

7:46campus is the tasman campus yeah yeah yeah it's talk about oh my gosh culture um yeah so the the process leading up to to starting greg was very deliberate um because i had done a startup before and um that company had gone to success successful outcome but it was a lot of hard work it was honestly grueling uh definitely like uh hardest challenge in my life and uh so i knew that i wanted to be involved in starting a company and building a culture from the ground up again um but i knew that i wanted to do it differently and so basically there was a lot of preparation thinking about

8:22really that the main thing i was thinking about is what is the industry that i want to be working in because i think that startups often don't go the way you expect um but you can learn so much and so i was really thinking like okay what do i want to become an expert at right like what do i want if it doesn't work out in the way we expect what would i like to have learned four years five years seven years worth of information about and uh i really kept coming back to science and i wanted to to kind of use my engineering experience and pivot that

8:52into more real world like physical phenomena right and like understanding how the universe works that's amazing and so that's really a lot of the thesis of greg is that we apply computer science and software engineering to this specific uh domain of how do plants work right and basically the the dots kind of connect looking backwards but it was a process of discovery of like what's an area that's emerging and like kind of changing like where is there an opportunity right because i think it's helpful to position yourself at a place where either you can cause change or this change already happening and uh right now like a lot of people know

9:31there's climate change um and there's also a lot of rapid things happening in plant science world um specifically around like crispr and plant genetics and stuff like that really at the deep end of it which we can get into it's like way deep but uh but basically this was before the pandemics we were actually looking into plants before covid and already there was like the rate of people bringing plants into their homes was growing by 50 to 100 per year and we wanted to validate wow wait wait really yeah that seems like that seems like a thing that would be fairly stable like uh is it is it is it a is it a

10:10generational trend like millennials or younger folks being i have a lot of people on twitter i follow that seem very interested in plants more than i have ever been there's a couple converging trends yeah i think a part of it it's associated to like the mental wellness movement so it's kind of this trend line follows one that's very similar to like meditation and yoga just five years later so i think it's a very it's a lot of adjacent interests there but then there's also an aesthetic component to plants where like people are kind of decorating their spaces and they're getting more like trendy and in how they

10:43you know how they even people who are dating like you want to have like a space that you invite someone into and it's very nurturing right um so yeah there was definitely a generational kind of tailwind already happening and then kovid just like cranked that up right because then everybody's on zoom and you look in the background and some people have plants and you're like oh that looks kind of nice like i'd like that i have this i have i still have this like barren white wall back here that it was all embarrassing yeah i need that's why i was excited i i installed greg today and i was

11:14disappointed i couldn't buy the plants in the app yet so we'll have to talk about that it's coming that is coming that is the segment yeah definitely um yeah so we kind of saw an opportunity and we did some due diligence some interesting things i think to identify like is there a revenue opportunity and my favorite stat that i like to share that blew my mind when i learned it is home depot is a publicly traded company so you can look up their you know annual statements and you can see how are they making money and if you look up their statements you'll see that they make more money

11:45on indoor garden than on any other product segment it's like home depot sells lumber paint appliances uh all these other things that's like that's like actual revenues is that also a margin because i would imagine these are high margin items as well i would guess yeah yeah depending on where you're following them but yeah they're they're pretty high margin um and no i we only looked at revenue but they make like last night like 11 billion dollars per year in revenue um which is uh and they're like that's one store right that's one sport yeah yeah and there's like every town has four of these right exactly yeah and home depot is

12:22like 10 or 15 percent of the plant retail market probably it's hard to estimate that okay yeah so it's like rough like 100 billion dollar a year kind of thing in the us yeah and other estimates pin like that's the size of in-app subscriptions for anybody who's curious like roughly like in that ballpark yeah yeah exactly like apple's app store subscription oh yeah sorry app store it's not even subscriptions i think that's the app store broadly yeah that so we so we combined the plant tam with then the app store growth in subscription revenue and there's our business model there you go did you did you

12:58i mean yeah you mentioned like wanting to get into something physical into something science related did you have like a passion for plants or was this something that is like deep in you or or was it more like me in an app subscriptions which was like well this looks like a good thing i could work on and i actually care about it and know a little bit about it right so how did it uh how did you go like yeah this is what i want to do that's a great question it was like 75 percent the latter same as you where it was kind of i got

13:22exposed to it because i started getting plants and i realized i did like them but there was no brand to guide me and there was definitely no science to help me keep them alive right um but i i grew up in the mountains and so like i i my family we i lived in mammoth lakes california for any of the listeners and so i you know i went on like a solo backpacking trip like shortly before starting all this and kind of communed with like being in nature with more people around me and maybe that put me in touch with the plants a little bit more

13:52but it was mostly uh kind of identifying this is a realm of science i'd like to work in because plants are mostly physics based this is something a lot of people don't don't realize but because they're stationary you can almost view them as like like a civil engineer would a bridge um so there's not so you kind of really think about like the water physics the light physics and so they're a really great vehicle for learning um just physics generally and also how like the sun and earth orbit matters to that plant in that location there's so much science there that we learned that there's a depth that was

14:27we were very interested in diving deeper into yeah not to mention not to mention biology right right yeah it's a big part of it yeah biology is difficult though right like if you're like an engineer who's trying to approach it right yeah it's messy you know exactly yeah yeah but if you think about it as a closed system right like yeah you have it's potted it's planted you know uh lumens in you know water in you know nutrients in yeah you can uh yeah you can you can make some approximations right as we like to say the closed system is is really important i can uh so so what greg does

15:07is greg predicts when a given plant is going to need to be watered that's like the super simple like simplified functionality it's one of the main things you need to know um and the way we figured that out talking about closed systems is kind of a fun fact you can very accurately measure the amount of water that a plant loses by weighing it on one day and then weighing it the next day and the change in weight is the water lost in grams and it turns out so what we did is we did that for like 700 plants for like six months and we then graphed what it was the

15:43grams of water lost per plant per day and you get this beautiful pattern um it's like this isn't random like this is a very clear like almost a heartbeat of a plant um which is a great fit for like machine learning right yeah so so so how did how did you pull this off like practically did you have like a big garage or warehouse or something like that that's that's more work than i usually do for software so me what that process was i definitely did so at one point i had like 150 plants and they all had uh plastic uh little pots and i had like

16:15labels i named them like a one through nine and then c one through whatever because i had to keep track of it right it's all in our postgres database and uh but that didn't scale and so like me and my co-founders we were all measuring every day every single day hundreds of plants that didn't scale so then we went on craigslist and we started saying like hey we're looking for people to weigh their plants every day twice per day for a couple months and we had hundreds of responses like people people care about their plants and they thought that it was cool to be doing like

16:43citizen science right and so we ended up with people in berlin and then you know sydney and all right because this has to be local right yeah and actually it needs to be in like southern hemisphere versus northern hemisphere because the location of like the sun and solar radiation affects it yeah so we needed a global distribution for sure this is like way off topic for um for subscription apps but if you if you squint it's there are a lot of similar problems in understanding user patterns and user life cycle and like there's so many hard to understand variables um yeah but one thing i'm curious about on

17:19the plant science front like how much does like humidity and other things play into that so if you if you have you know 40 humidity one day and 60 the next does that actually impact things no humidity we don't really need to model humidity very much um it's actually there's a couple of misconceptions um you don't really need to worry about misting or humidity and you don't need to worry about fertilizing like all that is overdone um for the most part like there's some cases where it matters but um i'd say for like 99 out of 100 plant types that you're likely to own doesn't matter and even more

17:56people don't realize that the humidity reading that we see in the weather is what's called relative humidity and it it's not actually like a super scientific way to measure like how the water in the air relates to a plant you need to look at absolute humidity the whole totally different calculation there's like basically relativity changes according to the temperature and so right yeah humidity you can almost to be honest like uh ignore except for a couple of plants that like really evolved to be in like you can picture like uh you know in england like a united kingdom like bog right whereas there's so much water like

18:33okay well those like some ferns like are from like the pacific northwest like washington area where it's like constant rainforest those types of plants yeah you're gonna have a hard time if you're not um in a very humid environment but the vast majority of you buy don't have to worry about it i have i have more questions on plant physics but i think uh i think i will let i will i will have to like save my curiosity have to do the uh we'll have to jump on your podcast and uh talk talk plans just invite if you need two two newbies on there just ask questions

19:04we'll be there so from um from all of this you you've started to allude to it a bit but one of the things i was really impressed talking to you a couple of months ago um was just how ambitious your plans are with greg so you're kicking it off with a consumer subscription app um but tell me a little bit about like where you want to go from there yeah definitely that's a part of like going back to like how we started it why we started it um i i have seen or like i've worked at companies and like not naming names that are very very revenue focused

19:39like just purely prime directive is we just need to make coin and as much of it as possible right and then the question is well if you get there then what do you do because if you do accumulate a lot of revenue and a lot of influence you kind of inherit a social responsibility right because like you're accumulating all these resources if you're like a facebook or an instagram i think there's like general consensus like you kind of need to think about the impact that you have because you're too big to not think about it right and so with greg like we really thought about if we

20:12managed to navigate this very challenging process of getting to scale well then what right and our goal what's really interesting that people don't realize is that plants in our homes are just plants that were taken from various places in the world and put in our homes right like there there's no such thing as a house plant it's actually just like a giant jungle tree that somebody took a cutting from and then transported it to england and then ended up the united states right so the physical principles that govern being able to predict how to keep those plants alive is are the same as the physical principles

20:49required to predict how to keep like crops alive right um like plants that are grown for our food system of which they're like billions right and those plants like it turns out plants are really like an infrastructure piece of our planet right like plants are our life support system on spaceship earth and it's kind of interesting it's the it's the first stage of catalyzing the sun's resources right like that's exactly it and a lot of people don't realize this that basically all of life gets its energy from the sun like that is the input of all of energy into what we know as life as you know maybe

21:27there's more on other planets that works differently but as far as we know all of life depends on solar energy yeah uh alex you're leaving out some very very sensitive uh bacteria that live by vents okay i love it i love that you know this jacob this makes i'm disappointed myself i can't think of what they're called they're extremophiles some kind of yeah it's all it's all uh it's all discovery documentaries there's a vanishingly small number of uh like living things that uh thrive on geothermal energy from the earth's core right but that's like less than like one percent as far as i know yeah um what people don't realize as an

22:04example is that like plants a lot of people think that plants are just taking things out of the ground like sucking nutrients out sucking water out they're actually also putting things back into the ground at all times and so plants like for example they photosynthesize so they take energy from the sun and they are the only thing on the planet that takes energy from the sun and then converts it into energy that all other life can use and it's not only insects and birds and mammals like us but plants are also depositing sugar into the soil so it's a bi-directional flow and that sugar feeds the bacteria is

22:38that an active process while they're alive is it or is it during decomposition no that is an active process like plants are actively um depositing sugar into the soil and that that those sugars feed the bacteria and fungi and those bacteria and fungi are responsible for breaking down the inorganic nutrients like nitrogen into a a format that plants can absorb because plants can't just like suck nitrogen out they depend on those organic you know facilitators and so it's a very symbiotic relationship and there's growing awareness now that like having a quote-unquote living soil is crucial for our planet and i'll tell you like an example of how

23:19how much awareness there is around this um during my due diligence for greg i went to a plant genetics conference this is like right for any engineers in the call like imagine like aws re invent except it's a geneticist right and so they're like presenting like how they run their projects and it's a really cool parallel world but half of this conference was dedicated to soil like microbiomes because that's how important it is it's like truly like a resource it's an infrastructure for our spaceship earth right that's amazing so so one of the things you and i talked about was not just you know consumer subscription to then

23:58like funding science which is kind of what you were talking about now but then also the potential to take this from from b to c to b to b so like you have um nurseries who have to manage the plants before the people buy them you have office buildings that have thousands of plants you have you know commercial facilities like there's you know plants existed on so many different layers of our of of of use um so tell me a little bit about kind of the the long and short term plans of potentially transitioning or not transitioning but but kind of building on top of what you've done for consumers

24:36to then expand into more b2b um uh use cases yeah definitely some other examples um people don't realize that cities have to like municipalities have to maintain their plant inventories right like there are people who manage the inventory of plants they don't just exist you know or there are small businesses uh there are people in most towns that grow food for their farmers markets for example um and so those are like smaller scale farmers and then there's large-scale farmers right and there's a real dearth of like talented software teams writing applications for any of those parties that's really the long-term opportunity to be spotted if we can pull together

25:16a talented team to make products for those people that's a long-term opportunity and my my thesis on this um which i think we're aligned on is that uh like delightful simple consumer user interfaces like simple software is appreciated by everybody right like enterprises don't want to use complicated interfaces there's taste now in software right in all levels of employment i think it's it's a bit of like our my generation aging into the the enterprise buying world and um also just like people have enough software experiences in our lives they've learned to discern like oh this is good and oh this is bad um and i think there's yeah i think it's

26:01really i mean we i've i've done it a ton in making revenue account i came from the computer subscription world i learned a ton of lessons about onboarding and and and and creating delightful experiences and like you know playing playing against and into people's like in you know habits and things like this that you carry into the enterprise world or b2b world and it can really supercharge software and it's probably what we're going to see hey i i i i i think i think there's still there's always this like technical leap or not technical in the sense of computers but technical in the sense of processes and and what not when you leap

26:36from consumer to to selling to businesses but as you said you bring those teams together you you build your data set you learn more about right the act of growing plants then you know someday you you you can you can launch into those spaces right and there are some some famous examples of this i definitely see it with revenue cat because like you compare the ui to a sas that was created 10 years ago and it's just more delightful right it's like simple and i know to use and i'm not like getting a headache while i'm on it it's nice right compared to this it's very nice of you to say

27:07yeah i'm biased um but but like some examples like stripe became famous right because like they had a good developer which is almost a consumer like like uh consumer say my mindset right just like make it easy make it simple make the make the shortest possible path to value right exactly yeah it's great slack would be another example right where's almost a consumer level application that just took off like wildfire because individuals liked it right and then they added enterprise grid whatever they have now to sell it to to walmart but nothing else they didn't need that to begin with yeah right yeah so it's just it's really cool that

27:45there's there's just such a direct path from selling to consumers right now and then selling to municipalities who are managing their plants in a few years and then selling to you know the companies who have to manage this at scale and then selling to farmers it's that's really cool um one of one of the things that again that you and i talked about you and i talked for like two hours a couple months ago and so there's there's so much that i would i would have loved to have recorded that and released it as a podcast but uh thanks david glad i can glad i can contribute

28:24one of the one of the fascinating things that you talked about was kind of your view on marketing and so i'd love for you to talk about that more broadly but then specifically what you're doing with nurseries is just such incredibly smart marketing like i mean it let me say change it for a minute so it's just so obvious talking to you that you're not the average like app founder you know like none of my apps have had even even like one 100th of the due diligence and like market understands i've never i've never bought something like i've never had a physical warehouse of plants um

29:04and so it's just it's just so clear that you you think about things in a way that that most you know app people don't most software people don't most even founders don't um and and so i i think you know we've talked about this on the podcast before this is just so many apps are trapped in this you know we just we have to advertise on facebook to grow we have to do this and like that playbook of just you know dump a money bunch of money in ads i think leaves so much on the table and so i just love that you're you're going to

29:36do that and then we've talked about that um you know you're gonna do paid marketing and and maybe you have already started experimenting with it but uh but yeah so tell me about what you're doing with nurseries and then just kind of you know some of your thoughts on on marketing and virality and stuff yeah definitely i think broadly like what i would i think i'm definitely aligned with that where uh your broader point is that like building an app is half technical and ui design and getting the product really really really right right but the other half that people are often uncomfortable about is needing to get it in front of the

30:14right people right and so in my mind the way i break this down is the two steps like i have a theory that like the two steps in making a successful app business are make something worth using and then put it in front of the people who would use it right and it's like remarkably hard to do either one of those but um once we had uh the beginning signs of retention so we got our first like i don't know 5 000 users by like posting on facebook and on reddit and like that kind of stuff then we started thinking about um what is like the most optimal time for

30:50people to be introduced to grade and what we came up with is well we solved the problem of uh if you have a plant and you don't know what to do with it how to keep it alive we solve that problem and so the most natural moment would be when you get a new plan right because it's like that's the moment you're like oh crap i have this thing how do i how do i keep it alive and uh so what we did is we reached out to a bunch of uh plant retailers like online in person brick and mortar all over the place and we basically said

31:20like hey we will help your customers have a positive outcome with your product right and so let's do this trade where like we will give them um at this point we had a subscription tier and so we said we'll give them free subscription tier for n number of months the first day was six and now it's three um and in return can you put in our little qr code flyer like nicely designed four inches by four inches recycled paper card that has a qr code it takes you to download greg right and so we did that and now like when these retailers ship out a new plant every single one of

31:55them has this little qr code in it and it's almost like a digital companion to your unboxing experience right and so that was definitely like a very natural fit and it it led to our first um probably like 10 or 20 000 15 000 users i'd say so can i ask like um did you do that yourself did you have somebody on your team because like yeah i'm i'm in the camp that that's outside my experience i don't like calling the pizza person like i you know i i don't know how to do that so how did you how did you delegate that and and and find the resources and a small

32:25team to pull that off definitely um so i i'd say i provided the oomph behind it but then i have a good friend who i've worked with in the past named colin who does like growth marketing stuff and that's his comfort zone right and so i definitely did reach out to a bunch of the biggest partners in the beginning um because the thing is that like with early stage stuff founder-led sales can be great right like you don't always need it it's better if you don't need it to be frank um but we were so early and we had no partners at all that i was like i have this is

33:01crucial for us like we need to have a better source of user acquisition that's like our next major challenge to solve and so i did reach out to them and then colin kind of like took over and scaled that right because like ultimately like i needed to be writing code and stuff um and so that now he owns that relationship and he's been able to to keep that going further um yeah just one of these unique channels that um you know i don't know you can as a b2c app founder i think david's point's exactly on i think we've a lot of us have settled into this world

33:34where there's one or two channels to like get growth and that's paid marketing there's a lot of good um growth resources out there um yeah there's a lot of good growth books i've read moving into the b2b world that say there's like seven channels or whatever there's only so many like ways to get and then and and in b2c we tend to be like well yeah there's these two essentially but it's not really true like you you can try stuff and i guess the trick is finding stuff that two things one is approachable like that's why i asked about you how did you make it happen well you were

34:06able to start it off and then you had somebody to work with you to to to bring it to scale but then the other thing is it has to move the needle right and so you and so you have to figure out and like for a price that's reasonable right and that sometimes is hard to find as well because i think with this you have this adjacent high velocity market of users you have a place your users are going every day which isn't maybe always the case for all apps right it's hard to find there's no meditation store that people are going to every day right

34:32but i thought there you go that's your that's your advantage you know i thought about parallels like i wonder if like fitness apps have tried partnering with gyms um yeah i'm thinking like fitbot i'm sure the gyms wouldn't uh be as eager maybe right well yeah i mean possibly i'm just thinking like if if like there's also like some there's also this like benefit right from the for the plan right yeah yeah yeah but i would just just like theorycraft like i'm thinking if there's an app that helps you track your workouts like i use football i'm a user um it's a great app and uh and it's a

35:06complete compliment to the gym like i can't do gym without i can't do fitbit without gym i don't really do gym without fit bod so i there might be a thing there or like with meditation i'd be curious if uh like yoga studios because here's the thing is find that adjacencies right yeah yeah and so here's the thing about a mobile app business that i have found is that one of our strengths is that we're building an audience right like mobile apps only really work with retention and so you're like building up this audience of people that are committed to your app and your brand over time

35:37and these smaller businesses are looking for ways to get audiences right and so in the scale of a mobile app is such that you might actually be able to accumulate an audience that is valuable to those small businesses that can be a part of that trade and so we've actually talked about that with our partners we basically say like well you're referring users to us we can refer users back to you and our scale is large enough that it could actually be a meaningful number um so i think you can kind of get it's definitely a b2b strategy where it's like i'm thinking of the strategic value i

36:08can provide to my partners in return for them providing value to us which might be why it's less common in the in the b2c like mobile app world right yeah any other um experiments that you've done or kind of things that you're working on in the in the marketing realm that you've seen fail or things that are being successful right now we really want to tap peer-to-peer referrals and that has not been easy and so that that is one that like have you seen have you seen the new store kit 2 stuff uh yeah they this is i don't know when this is gonna go out but they they dropped in in in the

36:43wwdc this this this week they announced there's a new api that's going to make that kind of possible now we'll be able to you'll be able to like extend somebody else's subscription based on some sort of like action i think i i don't know if they they made it as like um uh for extending for like a support use case so there might be okay maybe apple's like no we didn't want you to use it for incentivized referrals but it could totally make incentivized referrals work in like a really smooth way sorry on derail but uh it's kind of a change yeah well it's probably useful to listeners um

37:19we have definitely hacked around incentivized invites using promotionals i will say revenue cat has been helpful oh so and and so you guys are you guys are pushing folks but they have to go through like this like uh user driven process right they do yeah which is friction it's friction it's been fine but it's not quite as productive as we'd like so that one i have a lot of users that get confused about the process i would imagine yeah and it's like a deep linky thing so it's like not super transparent um the thing that's worked better the one i'm most excited about is i love this one um we uh

37:52created uh user generated content loops so basically people there are certain things you can do in our app that like publish web pages on the web um and so for us very specifically it's that people like greg uh we don't have a database of like every plant in the world yet right there's like 400 000 it's really complicated and like that's actually one of our core ips is developing that database and the only way we can do it is if we allow users to contribute to it right um we need to be like a crowd source like model and we get really good at curation so people can create

38:28new species in greg and then we curate that and then we publish that page on the web and then it starts showing up in google search traffic for other people searching for information about that species right and so i love the theory of this and like check back in in a year to see how it turns out but i love it because it's like okay a user publishes a web page which then more users find our app through so then they join the app and then they publish more web pages and then so more users find the app and then they publish more web pages right

38:57and so it's like a very like positive reinforcement loop and i think those types of recursive positive reinforcing user growth loops can lead to very healthy uh growth curves right yeah i mean that's the the the challenge of these apps you said it with retention is the big thing i think you you're you're you've got some tailwinds with keeping a plant alive plants live a long time therefore hopefully your app gets used a long time but then um finding these things that can take what is inherently like a decaying process which is people leaving your app and turning it into something more stable which is how you build this like

39:33yeah long-term business and then you know from your case like use this as a platform to move into other segments and whatnot but but but moving away uh from this like get them in monetize them let them go right model which like it seems just like the whole world's pointing us against right with with the way that ad tracking is getting less easy to do and all this stuff um so i was gonna say seo that's one of the seven channels right so you've hit at least three you do end up dependent on on google uh and right and then something can change in a moment's notice right but like i've been

40:08i've been watching seo for a while and i think that generally as long as you're not doing shady things you don't have to worry that much right make make content that people click on and find useful it will work right like but when i did our blogs for revenue cat initially the ones that got really good traffic for us kind of got us off the ground like i didn't i didn't think like i thought a little bit like uh what are people gonna google whatever but no it's just like i'll just make posts that people will read and spend time on and share and like that's all it took and you'll find the

40:36post that some of the posts that i did that were intentionally like i'm trying to be like seo smart didn't do that well the ones where they were just really good posts and like contained a lot of really good content and get referenced a lot those are the ones that still generate traffic for us so like um which is nice because you don't have to be like an seo master anymore you can kind of just make good stuff and do the smart things yeah yeah i was going to ask you so have you i think we talked about this but have you have you done some paid marketing and

41:03how's that gone for you yeah definitely we did use paid marketing to like uh scale up uh by like a 2x factor so that add a little bit of extra and um so we've been running on instagram and facebook um and it's been pretty productive to the point where it's almost net spend zero um so like we spend a dollar in advertising and then we make a dollar in revenue um we're still very early and so we haven't have enough months like the the pain point is if you do a trial it's actually a much longer uh payback period or like what finance people would call afloat than a lot of

41:38people expect because let's say you have we're generous we have a 30-day trial which is like a bit much for a mobile app but we do it and so 30 days and then the user subscribes um and then you get paid and then apple will pay you a month later right so you actually end up with like up to a 90-day float um and so that's not as tight as i would like hope for but it's better than nothing and i think that's the key is that like because we're a revenue generating app we're able to do the ad spend in like a reasonable way i think if that weren't the case it'd be

42:11very difficult yeah and at some point i mean with with your other strategies of referrals of seo of building a base of users that then you can get more and more partners you know so so if you went to home depot and said we have 10 million active users then that's a much more attractive proposition to them um so at some point you know spending at a loss might actually make sense but it's amazing that the subscription um model enables you to even spend break even but keep that flywheel going which is it's that's incredible and i think the netspend break even that creates an interesting exercise because then it's

42:57like it becomes we get into like financing but like if you fundraise that's then a good reason to fundraise because then if you have more capital you can put that capital to work um because if you know you'll make if you have a dollar now you'll have a dollar again in 90 days as long as you can carry that float well then at the end of 90 days you have a dollar and a user right yeah which is like has has value right like you've increased the value of your user base has adult you know dollar per user active value essentially in the venture market or however you value it

43:27right so um it does make sense so yeah i i want i want to ask like so you you guys it seems like your app's pretty developed for how long you've been working on it a year in change right um and you mentioned you mentioned this um like finding iterating to like a retention goal like how did that go did you start with just like the basic function like the most basic thing and then add stuff until you got and what what i guess specifically like what metric were you looking at to say okay retention is good now yeah it's a great question so we we did start with the most basic

44:03core functionality and i think one of the things we did that i would do again is we just solved our own problem so like i so we started the beginning of covid so like new york where i live locked down basically the day almost the day that i left tinder right and so and so i remember i'll never forget things were shutting down so i ran to the nursery nearby plant nursery and i bought like 30 30 plants because i was like i need to have the problem in order to be deeply motivated to solve it right because like if you actually have like over 10 plants keeping track

44:33of them kind of sucks a little bit it's hard um and so i knew that i needed the problem and that motivated us and our whole team really we basically just wrote like a prototype app to solve our own problem um and once it was working for us is when we started bringing like beta users in we did like a test flight version for a month brought in like maybe a thousand or i think it was two thousand beta users total and they're in like august 2020 and uh how did you get that list for the beta just facebook and it was mostly facebook it was mostly facebook like groups and

45:06stuff like that um yeah um and they posted on reddit reddit is hard um but uh we did a little bit of that ripoff middlemen made easy that's my favorite we posted i posted red it was where we launched too and i have this this favorite hater quote that i have like screenshotted on my desktop that i'll hold on to until we ipo yeah the hater quotes are something people should be prepared for i think yeah but let's see so we solved the here's the key is that we we specifically for our app we wanted to solve the retention piece first and so we chose the behavior in the app

45:43that would be associated with retention because the way that i personally think about retention is that what what happens is you have a trigger so a person needs an external trigger to think about opening your app right so it could be a feeling that they have like tinder it's a feeling i'm bored or i'm lonely and i want to see people and that's an external trigger that causes a person to think about your app then you need value to for them to actually open your app right like okay i have this trigger in this app can address that trigger so for us we didn't have like

46:13an emotion but we did have uh the need for reminders and so basically we uh leverage push notifications very heavily our whole app is like a water reminder app right now that's like the core value and so we built that specific functionality water reminders before anything else because we wanted to validate is that a sticky behavior is that something that people will actually want to do and use over like six months right and because we knew we wanted to get six months of data we had to build it first right because you have to really think about how long it's going to take to get that validation

46:47and we were bootstrapped and so we knew that like well we can't bootstrap for forever right and so we we needed to front load the questions that we knew investors would be asking when we went out to fundraise so speaking of which you just raised 5.4 million dollars seed round um tell us about the the process it sounds like you were you know having been a tinder and been in silicon valley in the industry um that was your goal you didn't come into it thinking you were going to bootstrap this forever and you were specifically kind of building up some of those retention numbers and other things that you knew

47:24investors would ask for um so how so how did fundraising go having kind of iterated into that direction uh it's definitely hard as hell um i don't know like you don't ever say that it's not um but it wasn't it wasn't like excruciating um i think recruiting is actually probably a little bit more difficult especially right now there's a lot of a lot of movement in the in the why people are working how they want to work it's easier it's easier to write a check than it is to take a job i think you know like to give in somebody to do you can write multiple checks

47:58right yeah it's not like it's not your everyday you know exactly yeah so um let's see we actually to go back to your first point we weren't um completely we hadn't decided that we were definitely going to raise vc capital so there was like like we did work through that as a team and we ended up deciding very specifically that our mission is one that we believe would benefit from us being good at raising capital because we think that if we can bring capital and talent to this industry in this problem domain um that's a good thing and then even from a life perspective like we wanted

48:36we want to move quick we want to like be able to grow we want to be able to like build delightful things for lots of people um and so that was that was the main motivation behind the vc capital i think it's a big trade-off um so we definitely did not take it lightly and we did deeply it closes off a lot of paths right it kind of puts you kind of really narrows what your future i mean kind of shoots you on a trajectory to something potentially much much bigger but it really kind of like brings down your your options a lot it does yeah i think you start to think

49:03about like am i okay with needing to focus on eventually providing an exit to these people who trusted with their capital right yeah and i think maybe something people don't think about is like the ceo or whoever is fundraising like you you build a relationship with your your vc partners right like i consider them like life journey partners at this point and so it's not that like it's definitely not an adversarial relationship it's more like i have a true responsibility to these people because we had a clear like this is their agreement it's like capital and then they have obligation to their investors too and so

49:37you know i'm aligned with that and i think you're right you have to think about like is that is that aligned with my vision for this this journey right and then speaking of of an exit um you shared with me you have a very unique approach to employee equity i'm actually curious to hear jacob's take on this um having gone through the whole thing uh himself but yeah tell us about your equity structure yeah we we definitely are uh experimenting and trying something different and i think there's pros and cons and investors love that by the way sure those were easy conversations surprisingly most investors were were

50:20okay with it um i definitely had a couple that were concerned about um the implications in the medium term but here i'll get to what it is so yeah tell me what it is yeah okay so basically like we um wanted to distribute as much of the financial ownership of the company across as many of the early teammates as we could um and the reason for this like the real thought that i had that whether or not other people think about this kind of thing i would i would encourage people to ask this which is um if i have an exit how big of an exit would i really want

50:51to feel very fortunate about right and like really think about like how much money do i actually need right because i think that there's a lot of people who get caught up with like i want a billion dollars right like i want like 100 million dollars and i've been fortunate enough like we pointed out earlier my first company was required for like a fine amount and then tinder totally exploded i didn't own as much of it but it was still a positive outcome and i can say that like it didn't change anything and i know it's a very cliched thing to say but i think it's a

51:20productive exercise that if anybody was founding a company i would recommend asking at what point am i again feeling fortunate about the outcome right and then what we really thought about is our ability to recruit a great team and basically the decision that we made is that um there's really two aspects to equity uh and i'd be curious again jacob's take on this there's there's compensation for risk so early teammates take more risk quote unquote right and so that that's a typical like reason for uh founders taking a large opportunity costs risk mostly right but yeah opportunity costs and risk and then the other dimension that i think about

51:57is effort where uh early stage companies are hard for everybody who's involved and my prior experience pointed towards like the first 20 people who joined the company or at least definitely 10 or 15 all worked uh pretty much as hard and definitely at least not like 10 it's possible we're 10 times harder right and so with less and with less glory to be honest right like less glory they don't they don't they don't get all the likes on follows on twitter or whatever right try to distribute it but yeah it's it's it's it's a grindy place to be for sure not getting the glory is like a it's

52:34definitely a double-edged sword because i think that that glory is also a responsibility right but right um yeah and so basically we decided to try this approach where we wanted to do this exercise of distributing that equity as equally as possible and so we set up a mathematical curve where whenever i make an offer i just look at this math equation of like what is the amount of equity this next person gets right um and and so and we did that and basically projected out like okay each person gets to like like if we reached a billion dollar company each teammate should have an outcome of

53:09something like 10 million dollars or more right like something something above that number and it was really important to map that out because otherwise it can go sideways and yeah and so basically that was our exercise and we basically said like okay can we can we turn that around a little bit and um the side effect that i like so again we're early in this like we're we're a eight person team growing to 15 and it may turn out to be complicated and again we check in in a year but what i like about it is that it did enable a completely transparent cap table right and that's nice because like

53:45i don't think it's like maybe required but i do like being able to show people like this is who owns this company with you right yeah exactly yeah so that's a positive side effect um but there's definitely it's complicated yeah well so david my take is actually we do something very similar yeah also like so interestingly and and inside inside baseball i think um it it's it's we we did um something similar no we weren't as scientific with it for the first like we had like a rough rule but it was like the same like each number like the the number like decrease like with this back off i found it a very

54:25it's a very hard problem to reason about because you you don't want to think about this you want the 100th employee to have some skin in the game exactly right but you you need to balance that with like hey like come join this company that you've never heard of and like probably has like worst benefits and you know who knows it's going to be it's going to be a mess right and so like finding that balance is really hard um and and you know i'm looking at where we're at 30 people now and the complexity definitely grows and then i think also you start thinking about like recruiting

54:52leverage and like what you know what how much equity do i need to offer to be able to like recruit these different types of roles and things like that and your systems get more complex but um but but it's still did you guys did you do something special special on founder equity to create like more more room on the cap table or did you how many co-founders do you have uh that's such a blurry line i don't know if this is just me but i never know like well is that the fourth person like no i guess that's true i mean uh yeah i guess that's a

55:21maybe that's a it's a yc thing is where they're like very clear like who are the co-founders and who are not right but yeah i i agree it's probably mostly a a label i feel like we have six co-founders um realistically there were two of us that were like thinking about this you know like that's not true there are three of us that were thinking about this like two years ago um so we i i call them co-founders and so we're all on this same plan so like we have this graph where like i am the first black yeah yeah yeah it's truly distributed like as much as possible and so the

55:54hardest this plan is definitely hardest on the first three people and it requires incredible cultural buy-in to that because it means that outcome like i i definitely worked on this for a lot longer than like the people who were joining today right and like it was stressful and hard but here's here's my my my personal take and is that i actually think the risk of doing startups and i feel like yc may agree with this the risk of doing startups is like so much lower than most people realize for people who have the fortune of having a safety net right like if you're if you have a

56:29family and you don't have savings then like of course that is that is a risky proposition but for people who are relatively early or mid-stage in their careers and they have savings and they're not actually going to end up in a really dangerous spot then i think that startups are almost always a net positive if you really apply yourself because the amount that you learn and grow by solving that many problems uh only accelerates your career right and so going back to the risk versus there's also opportunity cost and then there's effort i personally discount the risk for people who are fortunate enough to have that safe space

57:03i discount that risk almost to zero because i think that it's just such a even this time around for me my second startup i have learned so much and it's been such a good life experience that even if it didn't work out tomorrow net win for sure yeah so part of the reason i brought it up was that i when i joined i told dick of this when i joined revenue this is way inside baseball i don't know why we're getting this uh open and opening up on the podcast but when i joined revenue cat i thought more along the lines of you alex like i thought well why

57:35is jacob getting so much more of the company and then and revenue caps uh like the first 10 employees and then the next 20. it's actually it's very generous compared to the industry like jacob did an incredible job and has been great with equity so but but early on you're at a startup and you're like wow i'm working really hard he's working really hard like why why why is the outcome going to be so different but honestly 18 months in and jacob having raised the series b and like taking a lot of the hardship like you as a founder are going to have to do things and be

58:11under amount of stress and like there there really is for the and i don't it's probably somewhat true for maybe those you know those first early employees carry a little bit of that load but the but a founder just has to carry a different load and so it's always gonna fall on that first two you know whatever people on the cap table right whatever it's gonna keep rolling until it hits you at some point and you know as it gets bigger um yeah yeah i you know i don't know it's an interesting this could very easily devolve into like the nature of capitalism and ownership right

58:46because it plays very much against this like you know constant like marxist debate about like labor versus capital and like what are the value and what is like value and like because you know you like you had this whatever period it was one month one year whatever that's like such you know if you build the the greg of your dreams which is a billion dollar company that's touching all parts of agriculture and plant like how much how much of that is from that one month right like why do you get why do you get such an outsized return right and not yeah i don't know maybe it's you know

59:18maybe that maybe that's when the they get they'll be at my gates with pitchforks and stuff like that but like uh but yeah i know it is it is it is uh yeah i mean it's and for for you know i think folks our listeners i think this is interesting because when they're trying to make this decision of like am i building a b corp am i building an llc with my friends that we're just going to share revenues am i going to go venture am i you know one thing i kind of went into venture a little blindly like i didn't understand all of these aspects before i

59:52filled out the yc application that was basically like i'm doing venture i'm gonna fill out the yc application and luckily they kind of like taught me like okay this is what this means and like i'm still learning it as i go like and now i think i kind of know like what i'm in for um but i think it's something undereducated on and like it's hard to do without first-hand experience and like you've been in other startups and had exits and things like this um which are great educational experiences but um it's not something to be thought on lightly because it really will kind of it's really hard to change paths after a

1:00:25certain point right like you can go bootstrap to venture but going back is almost impossible um you can even even doing something like an llc where like you split it between a few people while okay somebody leaves like what do you do you know there's not a clear path for that these are really things like you have to understand um when you're when you're taking your app into a business or deciding what you want out of you know your work in your life so um it's great that you're playing with it though like i think it's great when when i think it's founders sometimes we don't push the limits enough with

1:00:58with just the status quo um but it's it's how it's how things get better like is is is by by you know people with a little bit of leverage being like we should do this right exactly and i think that that's the key is i don't think that like our approach is is better it's an experiment and i think it has trade-offs that are equal it's just what is your desired outcome right yeah and so what what we were really solving for is we wanted to end up with a team in four or five years of people who are very bought into still being at the

1:01:30company right because we really wanted to build a place where like we're not trying to graduate out into a exit to like another giant enterprise like i very clearly telegraphed our vcs that our desired outcome is an ipo and we do have to provide an exit to our investors um and who knows what will happen like gosh that's like so so pie in the sky right hopefully we get there um but in any case that's the problem we were solving for is i was thinking about like ultimately i'd wrap this up into working backwards where like we thought about our end state and i wanted to have

1:02:00you know 100 teammates that were like i felt very authentically were like just as bought into this as i was and so i optimized for that objective function right but then it comes at other trade-offs where like david you're completely right that like the amount of stress that i have gone through in the last you know year and a half is soul-crushing um it's like and even i do have thoughts like well why don't i own like 25 of the company or something right um i definitely do not um but i'm very at peace which by the way that's that's that's i mean i don't own 25 percent of the

1:02:35company anymore because like delusional stuff but like at that stage that's that's that's pretty like very open-handed right like you've shared a lot and you've got other founders obviously or you know yeah that was the clarifying thing that makes what i think what you're doing so unique is that you started with employee zero right um right right typically more common practices you have some like group that you call co-founders they get some like chunk of the pie and then like you have like an option you set aside some amount of equity for um for employees and you work backwards from there like we set a goal to be at a

1:03:07certain percentage of employee ownership by the end and we worked backwards from there but i think that's the whole point is that you do have to start with this end state and that's not just for equity planning that's for all of this like what is the end state have an idea because you got to convince 100 other people to go there with you you've got to like convince yourself that you're going to want to do this that whole time and so you know we've we're pretty settled on that ipo path as well like of course it's a very far journey and like lots can happen between

1:03:33here and there and like i can't promise i mean it is an unlikely outcome just by the definition of it but if but it's useful even at this stage to be like that's where we're going we get there i don't know what the journey's gonna look like but that's where we're going so i i i think it's a smart way to run it yeah and then what you say earlier jacob is so true too and i think a lot of the people listening will fall on a pretty wide spectrum from just you know indie developers like i was a few years ago where i still had to think about this

1:04:04and i actually made mistakes around this we're like you know oh let's build an app together we'll do it 50 50. no exit plan no like what if things go wrong what if we bring in a third person and i learned through hard knocks that like you you need to look at that in state and figure out yeah what can go wrong between here and the end state and and make some decisions early on that account for those things because if not you're going to put yourself in a bad spot so so anybody working on a on an app business or any business needs to think through these things like how do

1:04:39you split up ownership how do you manage potential exits how do you vest the ownership over time so that if somebody leaves early they're not having an outsize um return on a minimal investment but anyways i i really appreciate you uh opening up about this alex and then jacob i kind of put you on the spot that's i um i think what you're doing with revenue cat is great and i mean i you know i feel like i was you were very generous with me on stock and and and the first employees we'll go ahead and link to david's compensation package i love the point that like it is it is

1:05:16philosophical right and i think it is worth like entrepreneurs talking about the options um it's fast sometimes there are companies there's like the whole open comp model like buffer you know actually helping their their salaries and equity and stuff and uh that's an interesting approach too um yeah being intentional about it i think is my advice right just don't just don't fall into it like not not having a point right think about it you know not a lot necessarily but do think about it well and really the the working words thing like what is what is your desired destination can you kind of picture that world and then

1:05:50reverse engineer what steps will get you there because that's really that's also product development it's company strategy financing like if you are raising capital you have to be able to describe where is this capital going to get us because it's not going to last forever it's always going to last less long than you think it will right right yeah well there is so much more i wanted to talk to you about but i think that what we did talk about was really fun and interesting and honestly really different you know we've had a lot of podcasts that that talk about monetization and talked about retention or other things and so

1:06:22hopefully this is a really unique take that i think a lot of people can get get some value from um so yeah thank you so much alex and uh definitely looking forward to uh talking to you more in the future as a as a revenue cat customer that's uh nice um so i'm gonna put links to your your twitter and to the greg app in the um uh in the show notes but anything else you wanted to share as we wrap up you're hiring right so we are hiring yeah we're hiring uh uh senior engineers uh staff engineers and a product designer and a head of

1:06:55brand uh so if anybody wants to apply machine learning and help machines grow plants that we can make the ecosystems and the food system a little bit better reach out to us that's a great pitch that's really tight and get early in a in a very unique experiment where you're going to get more equity than you typically would in a startup so that's that's a huge pitch that's strong it is yeah yeah okay cool we'll we'll put links to your hiring page in the in the show notes as well so um but yeah thanks thanks again so much for being on the show yeah thanks alex it's a fun purpose i

1:07:25loved it to make sure you never miss an episode subscribe to the show and your favorite podcast player thanks so much for listening until next [Music] time you