thanks Pao and welcome everyone I'm really excited to have you this morning or this afternoon or evening depending on where you're coming in from around the world today um so my name's Phil Carter as poo said I uh teach a course for reforge uh and I've spent the majority of my 15-year career working with uh tech companies primarily consumer companies uh and I've worked with a lot of subscription businesses and um as I've seen a number of consumer subscription apps both uh internally as a growth and product leader and now externally as a growth adviser struggle with many of the same challenges around user acquisition U subscriber conversion monetization um I've developed this framework that I call the subscription value Loop um it's the unifying framework to my reord course uh it's also a topic that I've written about quite a bit uh on my substack and uh confidentially I have a guest post coming out through Lenny's newsletter uh in the next week or two that we'll go into a lot more detail on this but you all are getting a sneak peek um so we're going to jump into it today uh I'll give you all a little bit more background on me before we get started um so I'm currently the founder at Elemental growth it's growth advising uh Agency for C to serc Consumer subscription businesses um I'm I'm also an angel investor and so I do some investing on the side um prior to that I spent the last seven years leading product and growth teams at three billion dollar plus companies uh most recently at Fair where I led International category and up Market expansion um prior to that I spent almost four years at Quizlet uh which is one of the top education consumer subscription businesses in the world um was a senior director of growth there leading everything from top of funnel user acquisition to subscriber conversion and retention at the bottom of the funnel um before that I was a director of product at ibata uh here in Denver which is where I'm I'm coming to you from today um and then prior to that I spent a few years in Venture Capital at Trinity Ventures investing in early stage consumer business models this was 2013 to 2015 so right around the time that um consumer mobile apps were really starting to hit their stride and you were starting to see more and more of these big Venture outcomes and so I've been living in the world of uh consumer mobile for a long time now and uh love these business models um but they are challenging they do have uh some headwinds that they often face and so we're going to talk a little bit more about that today um here's our agenda so we're going to spend five minutes up front on the problem which is that consumer subscription apps are easy to launch but hard to scale then we'll get into the subscription value Loop framework um which is the proprietary framework I've developed for how to think about growing these businesses and then we'll get into a little bit more actionable solutions so how to quantify your Loop identifying some of your biggest growth opportunities um using a tool that I've developed called the subscription value Loop calculator and then applying those specific strategies and tactics to actually accelerate the growth of your business uh I'm hoping to get through that in the next 20 to 25 minutes so that we can leave plenty of time for Q&A if you do have questions I told PA I'd love to make this interact and as much of a discussion as possible so please don't hold back on asking your questions in the chat as we go and if pales a particularly good one uh he may jump in and and and we can sort of make it interactive as as we go all right so let's start with the problem and that is that consumer subscription apps are relatively easy to launch but hard to scale and when I say relatively like any tech company is difficult to build so please don't hear me as saying oh it's easy to just go out and build a mobile app um that's not what I'm saying but what I'm saying is relative to uh a lot of more complex business models like B2B SAS or marketplaces um consumer subscription apps tend to be a little bit easier to get to Market and I'll explain why in a moment um so the subscription economy has expanded rapidly um there are now more than a dozen major categories of uh mobile subscription apps um some of the big ones are health and fitness productivity uh education and then you've got a longer tale of you know travel and utilities and and many others and there haven't been too many major success stories yet in in the guest post that I'm doing for Lenny's newsletter I talk about uh there there have been less than 50 total consumer subscription businesses to reach billion dollar plus valuations that's across both public and private markets and there have been less than 10 that are publicly traded with um valuations north of 10 billion so there have only been so many major outcomes but there have some been some really big ones dualingo is a recent success story you've got Spotify Netflix and obviously a number of others but even those companies have seen their ups and downs and um and so to get into why we see that uh I I alluded this before um relative to many other business models consumer subscription apps can generally launch faster with less Capital it's not always the case uh but as a rule of thumb that's generally what you see and there are a few reasons for that so number one most of these companies don't require sales teams and they have very fast purchase Cycles they don't have to deal with complex complex Marketplace Dynamics um every once in a while you'll have a consumer subscription app that's a two-sided Marketplace but it's pretty unusual they have low marginal cost to serving additional subscribers in most cases they have high gross margins and those generally improve as the company scales and then finally they can leverage app stores the the Apple and Google Play App Stores for global distribution for payments and for TurnKey support tools and so all of these are advantages that make it relatively easy for Consumer subscription apps to get off the ground uh but then it gets tricky and I'm not the only person who's written on this Casey wiers a great article on why consumer subscription is hard and he talks about how you have these three fundamental challenges right number one finding users is hard and when I say that what I mean is um there are certainly examples of apps like Quizlet or straa or all trails that have hugely benefited from organic Word of Mouth um in some cases from SEO but a lot of these consumer subscription businesses are overly reliant on paid user acquisition through channels that are increasingly saturated I'm talking about channels like uh Facebook Instagram uh Google and as these channels get more and more saturated customer acquisition costs go up um Apple made things even more difficult a few years ago when they launched app tracking transparency restrictions that make attribution for paid ad spend much more difficult and so that has rendered paid acquisition even less efficient and so finding users is hard and it's getting harder number two keeping users is hard so there's plenty of literature out there on consumer subscription retention B benchmarks and how those compare to B2B SAS and I'm going to get into some of the specific data on the next couple slides U but as you might imagine you know consumers are fickle there are a lot of substitute products out there and so you don't see the same degree of long-term subscriber retention in consumer that you see in prosumer SAS and especially in Enterprise SAS and then the third thing is monetizing users is hard so ARP average revenue per user tends to be much lower for Consumer than it does for B2B business models and it's harder to expand right you don't have the land and expand dynamics that you have with an Enterprise account where you might enter with a certain number of seats but then as you prove yourself as a product you're able to sell more seats and expand the average contract value of your retained accounts and that helps to offset the turn of accounts that go away um and so it's it's just hard to monetize these users over the long run and all of these make scaling difficult easy to launch um but hard to scale and so don't just take my word for it there's there's data out there to support this so um there are a number of data sources you can look at recurly adapt uh there are a few others out there my favorite personally is revenue cat um they just came out a few months ago with their state of subscription apps report for 2024 uh and it compiles data from over 30,000 consumer subscription apps accounting for more than 200 9 million subscribers and billions of dollars in subscription Revenue so it's a it's a Fairly reliable robust data set and what you can see here I haven't pulled all of the important consumer subscription metrics but I've pulled a few of the most critical ones and the numbers are pretty telling so even looking at top cortile apps so apps in the 75th percent um these apps are converting less than 6% of installs into subscriptions and then they are losing just over half of their annual subscribers after the first year and over half of their monthly subscribers after three months and so that that's difficult right like building a venture scale sustainable business particularly one that's going to be heavily reliant on paid acquisition as it scales is not easy with those numbers the good news is as you get into the very top 5% of apps so 95th percentile subscription apps do have the numbers to support Venture scale businesses the numbers here look meaningfully different so you've got install to paid conversion rates over 177% you've got um three month three month monthly retention north of 60% and then onee annual retention well north of 60% as well and so this starts to look like the metrics you would want to see as an investor to believe okay I can put my money into a product like this and maybe it can be the next du lingo or it can be the next Spotify okay so that's the context what are these apps doing differently like how are these apps able to succeed where so many others either fail or you know they just hit a ceiling around 5 million 10 million in ARR that's what we're going to spend the next uh section talking about um and Paulo feel free to jump in at any point if if you have any questions you want me to answer but otherwise I will I will keep charging ahead here we had a specific question actually on back to the revenue cat data do you know what the denominator is for the trial start date uh for trial start rate yeah these are all based off of installs and so this is this is an important uh caveat which is different subscription businesses rely more heavily on mobile versus web conversion obviously some subscriptions don't even have trials it's just straight to subscriber conversion and so you know I'm trying to apply a general set of numbers across an ecosystem that is a bit more nuanced um just to illustrate the point but the um the numbers here trial star rate trial conversion rate and install to paid conversion rate trial star rate times trial conversion rate essentially is install to paid conversion rate and so all of these are based off of installs as a denominator great that was the only question so far great question awesome well please keep them coming in the meantime I'm going to jump into the subscription value Loop framework um so this is a framework that I've developed for how to think about growing consumer subscription businesses uh and it came out of the nearly four years that I spent leading user growth and subscriptions teams at Quizlet so the first component of this is the core value promise uh and this is true of any business right any business is built on a strong and compelling promise that it's giving to its customers what makes consumer subscription particularly interesting is that there's just so much competition right because these apps are easy to launch it means that many of these app categories have got very crowded and because you have a subscription business model you need a promise that isn't just compelling it needs to be enduring right if you deliver a lot of value in your first month or two but then you hit diminishing returns you're going to see subscribers churn and that that won't really support a successful long-term business so the best consumer subscription apps have unique core value promises that offer enduring value I've listed a few examples here that you probably recognize so Spotify listen to music you love build playlist discover new artists who match your taste do a link lingo enjoy gamified study experiences with an emphasis on gamified that make language learning fun um straa record and share your workouts with a supportive community of athletes you've got the Kudos and the whole you know if it's not on Strava it didn't happen um and then tender F match and connect with other attractive single people in your area and do it quickly in a single swipe and in a way that's really fun and engaging so these are examples of compelling core value promises that are at least different iated enough from the competition that it gives these companies a real advantage and a real Mo to build on and then the next step is a three-step compounding subscription value Loop that harnesses the power of that core value promise and so the three steps here are value creation which is building a great product that offers ongoing value to subscribers that work is typically done by core product teams you've got value delivery that's delivering value through cost efficient user acquisition typically led by marketing and in some cases with assistance from growth product and then finally value capture this is often the most overlooked step particularly for early stage subscription businesses that you know they want to give away a lot of value for free they want to drive organic acquisition um but you need to be able to convert enough free users into subscribers and Genera enough Revenue to subscribers to be able to reinvest in the business because otherwise you don't have the resource need to invest in product Innovation and paid marketing campaigns and that's what recycles and compounds the loop uh and that work is typically led by growth product so those are the four component components of the subscription value Loop the core value promise and then the three steps of value creation value delivery and value capture next I thought I'd go into a brief case study on each of these steps and this is content that I've written about on substack it's content that you'll hear about in my course from guest speakers um that have actually worked at all three of these companies um so first we'll start with value creation and the obvious example here is dual lingo they've been the darling of the consumer subscription world uh for the last couple years after going public I think it was in 2022 um they they just recently surpassed a 101 billion market cap they fell back below that in the last few months but you know they're a very valuable company they continue to do a lot of um Innovative smart things and at the center of all that is value creation and some of the specific tactics that uh dualingo has used to great effect um to create more value for their users and for their subscribers are an immersive onboarding experience so you come into dual lingo and with in the first few minutes they're not telling you why you should use dual lingo they're showing you right you're you're using the product you're learning a language you're experiencing streaks and badges and um extra rewards so you're you're understanding the gamification of dual lingo that makes it different than other language learning experiences um you're seeing your lesson plan get personalized to you based off of uh how many responses you're getting right and wrong and the feedback that the system is getting about you as an individual language learner and then they have demonstrated and proven efficacy there there have been academic Papers written on Dual lingo it's not to say that it's a perfect substitute for taking a language course in college um but it's pretty close in a lot of cases like if you're a diligent dual lingo user and you use it for uh you know 12 months 18 months 24 months you can get pretty good at learning a language and you can do it in a way that's a lot less tedious um so that's that's dualingo and that's value creation the next step is value delivery and so for value delivery again this is delivering value through cost efficient user acquisition hopefully not being overly reliant on paid acquisition to scale and I think a great example for Value delivery is straa um this is a product that grew virally early on particularly within the cyclist Community then they started to expand Beyond cyclist to Runners and other outdoor athletes um they've gotten a lot of benefits from users posting content on social media uh obviously you record your workout you want to get kudos so you post it on the app but some cases you post it on social media and so that drives an organic flywheel um improving paid ad efficiency as they've gotten to a certain scale straa like so many consumer subscription businesses has had to invest more and more into paid acquisition but they've done a better and better job of that um they started to invest in influencer marketing campaigns on channels like Tik Tok and Instagram and then they have this annual camp straa event where they bring together um their loyal Community from around the world with popular athletes for a live event that really sort of excites and galvanizes their power users so that's straa that's value delivery and then the last one I know we saw at least one person from match group in the webinar um so the last example is value capture and for this one uh I'm speaking to Tender um Robie meta who was the former Chief product officer at tender is one of the featured guest speakers in my course and he talks about how tender has evolved over time from a single subscription tier tender Plus to three subscription tiers tender plus tender gold tender platinum and they've also added additional consumable inapp purchases like boosts and super likes that complement the core premium value Promises of their three subscription tiers so what's important here is as a as a consumer subscription business in many cases you only have a single subscription tier which means you can only charge one price to all of your users you can use things like strategic discounts to try to um match price to willingness to pay on the margins for users with lower willingness to pay but there's only so far that can take you and so what tender has done a remarkably good job of is um coming up with these three different subscription tiers that each have slightly different premium value promises sprinkling in these additional consumable inapp purchases to get even more revenue from their power users and what all of this leads to is higher average revenue per user um higher subscriber lifetime values that has also been been important in recent years because as tender has gotten to be a very large company and as they can rely less and less on the viral Word of Mouth that that drove all their growth early on like Strava they needed to invest more and more money into paid acquisition campaigns and so getting more revenue from their subscribers means their unit economics can support more spend on paid acquisition channels and then of course they've done price testing and optimization in the product that sort of table Stakes um so hopefully these three examples have given you a flavor for what I'm talking about when I when I talk about value creation value delivery and value capture as the three steps of the subscription value Loop and how it might look in practice at some of the top uh consumer subscription app businesses uh we're getting into our third section third and final section next but Pao any any more questions from the group before I proceed sure we we had a question come up from Melissa asking how does delivering ongoing value not turn into a feature Factor based product work yeah that's a great question and I do think that it's tempting to draw a connection between okay more premium product features means more premium value means higher LTV but in reality at best even if you do a a good job of introducing new premium features that are actually valuable to users you're going to hit diminishing returns right because the 10th and then the 50th and then the 100th premium feature you launch it's like the amount of incremental value you're going to get from that is going to get smaller and smaller and smaller and then the second thing which is a hidden cost of becoming a feature Factory to use your words is your product just becomes so bloated and complex that you start to see new user conversion rates really go down because they just can't navigate the complexity of your product now that's very different with prosumers and in B2B because you've got a much more considered purchase being made by a professional whose whole job is to do a good job purchasing the right software for their business but that's not the case in consumer right people's attention spans are short um there are lots of cheap substitutes available in many of these app categories and so you have to keep things simple which means it's not necessarily about just releasing more and more and more premium features it's about releasing the right ones and then doing a really good job of merchandising them and to go back to the tender example you know tender has three subscription tiers and they have two inapp purchases but and those different subscription tiers have different premium features underneath them but it's not a crazy long list and they do a really good job of explaining and packaging each of these premium value promises in a way that is is relatively intuitive to their users that's a great question I love that one any others Pao before I keep going no you can continue all right great thank you all right so the last step here is all right we've got this framework but a lot of times Frameworks aren't very actionable and so you know I can sit up here in my Ivory Tower and talk about how this might work in theory but what does that what does it actually mean in practice like how can I apply this for my own business um so I'm in the process right now of working with Revenue cat who has the most robust and extensive data set out there that that I'm aware of to build the first version and it's admittedly it's going to be an MVP but it's the first version of what I'm calling a subscription value Loop calculator that will help Founders CEOs product marketing and growth leaders at consumer subscription businesses to compare their performance on growth metrics that drive the subscription value Loop against key benchmarks not just overall but in their specific country or region and in their specific app category which is really important because these these metrics vary widely by geography and by category and so there are five steps you you'll be able to take to do this once the tool is released over the course of the next week or two um number one identify the metrics that drive value creation value delivery and value capture for your business these might be things like signup rate activation rate and long-term retention rates in value creation uh cost per install cost per trial um subscriber CAC for Value delivery and things like trial star rate trial conversion rate install to paid conversion rate uh annual and monthly subscription prices gross margins and value capture so these are the metrics I'm talking about uh number two you're going to calculate your company's recent performance against each metric generally I recommend looking back 12 months just because if you have any sort of seasonality in your business that'll strip out any effects of seasonality U but you want to look at recent data so that it's relevant you're going to compare your performance against each metric versus those category and Country specific benchmarks then you're going to identify opportunities based on the metrics where you see the most underperformance relative to the benchmarks that are relevant to your category and region and then finally you can prioritize initi that specifically focus on growth metrics with the greatest upside potential and there's some art to this like I don't want to I don't want to imply this is all just some perfect math equation where like you plug the numbers in and out out comes a perfect road map for your product team obviously you need to apply your own judgment and and think about strategic value in addition to you know where where you see upside in these benchmarks but it can be a really valuable tool to sort of like get some x-ray vision into where you may have the most uh potential to accelerate growth so here's a quick example of what this looks like this is a completely hypothetical example but hopefully it illustrates the point um so in this tool once it's live you'll be able to set your category in this case health and fitness you'll be able to set your region in this case North America and then you have Northstar metrics which are LTV over CAC and payback period you've got your value creation value delivery and value capture metrics and in this particular hypothetical example you can kind of see based off of the heat map on the right hand side that this company is underperforming on LTV over C and payback period okay those are those are output Health metrics but why like digging under the surface why are they underperforming well the other red areas in in the chart here are sign up and activation rates and then subscription prices and LTV so this company's doing a very good job of retaining subscribers once they convert them and they're doing a good job of efficiently acquiring users and subscribers where they're falling down is at the top of the onboarding funnel with sign up an activation and then they're simply not pricing their product as high as other apps in their category so this is the type of insight that might help this uh hypothetical North American Fitness Company say okay let's have our growth product team go focus on improving the top of our on onboarding experience and let's run some pricing and packaging studies to figure out if we're underpriced and so the last thing I wanted to do here before we get to Q&A is just get to some specific tactics so you've got the subscription value Loop framework as an underpinning you've got the calculator as a tool for figuring out where you have the biggest opportunities but once you figure out which metrics you want to move what comes next um the the guest post and L newsletter will go into a lot more detail on this but I'm just going to give you a sample of these today so the first one here is a value creation tactic that is defining an activation metric and using it to optimize your new user onboarding experience so activation rate you can think of as the users who reach the aha moment which is essentially the moment where they understand why your product matters to them divided by all users who uh sign up for your product and in this case what you want to do is brainstorm a set of different activation metrics that might be relevant um then you can organize data that looks at okay for each of those activation metrics if we were to look at our data what is the activation rate for those various activation metrics and then what is the long-term retention rate of users who hit the activation metric versus who don't hit it and then ideally what you get coming out of that is a scatter plot where you can look at the uh correlation the R square value between activation and retention for these various activation metrics and you want to select an activation metric that has a high rqu value mean it's correlated with long-term retention and that is simple enough and actionable enough that your team can actually use it as a powerful tool so that's number one activation metric onboarding is so so important for Consumer subscription apps because more than 75% of Trials generally happen within a user's first session or at least within their first 24 hours and so this is a way to make sure that you're doing onboarding right um the second tactic is called the word of mouth coefficient so this is a value delivery tactic and this is a metric that I helped develop along with its creator Yousef B who developed it coming out of Zinga and has used it at a couple of companies since then and the idea here is word of mouth is hard to measure it's kind of there's so many different ways for people to talk about a product or share a product online or offline so this is by no means a perfect tool uh but the idea is you calculate the ratio of new users that you think are coming to your product through word of mouth and you're in in that based off of the channel they're coming in from so social channels referral programs branded SEO you can largely assume that a lot of that traffic is Word of Mouth driven traffic and you divide that by your entire base of returning users who are already active on your product and then your new users Who coming in through non-word of mouth channels which might include paid ads or non-branded SEO and so that gives you a ratio and then you want to look at that ratio over time and see how it Trends and the chart here is a real analysis that I did when I was at Quizlet uh just before the pandemic where we looked at our Word of Mouth coefficient I I've eliminated the scale here for confidentiality reasons but you can see how Quizlet is an edtech product the word of mouth coefficient goes down over the summer holidays not surprising because teachers and students are out of school it spikes from August to September during that critical back to school window it spikes again a couple times during the school year during finals and other exam periods and then when Co hit we saw it just plummet as schools went remote and Clos down um but then we we began to see it recover as as schools got back on their feet and went and shifted to remote learning and it was actually fascinating to see our Word of Mouth coefficient recovering in different countries at different times and based on that we could sort of predict as a data and analytics team you know which country is we're figuring out how to come back from covid sooner rather than later with with their school programs so that's tactic number two and then the last one here is uh fairly obvious pricing and packaging is one of the most powerful levers that any subscription business business can use to uh improve Revenue growth there are a lot of different tools for this um there's a great Len newsletter uh post on The Ultimate Guide to willingness to pay that you should check out if you haven't seen it already um but here are a couple that I like to use so van westendorp is a is a simple one you basically ask users four questions in a survey you know at what price would this product start to feel um too expensive inexpensive sorry too inexpensive inexpensive expensive or too expensive and the results uh to that set of survey questions gives you an acceptable price range and an optimal price point that's the simplest way of measuring willingness to pay It's relatively quick and easy to set up in a survey it's not the most precise but it's usually precise enough for uh consumer subscription businesses because they're in relatively established product categories and then conjoint goes a step further where you're actually breaking your subscription into its component features which are called attributes you you give uh respondents a set of two or more packages that they can choose from with different features and different price points and then the conjoint analysis actually um uses all the data gathered from those responses to spit out not just overall willingness to pay but relative importance and marginal willingness to pay for individual premium features and this is a tool that can be really powerful not just for overall subscription pricing but also for things like subscription packaging and tiering and that's it so to wrap up here before we get to Q&A um if you remember nothing else from the webinar today I think these are the four key take ways I'd love for you to remember number one consumer subscription apps are easy to launch but hard to scale because finding keeping and monetizing users is harder than many other models uh number two the best apps overcome this by harnessing a subscription value loop with three steps value creation value delivery and value capture number three you can use the subscription value Loop calculator which will be releasing soon to quantify your apps performance and identify your biggest growth opportunities and then finally once you've identified those growth opportunities there are several proven tactics you can turn to to accelerate growth of your business and I'll be covering those in a lot more detail uh in the guest post that we launch next week or the week after and with that I'd love to open it up for Q&A great we have a bunch of questions here some of which you actually already answered like about how to experiment with pricing and so we've got a question about delivering new features when delivering when delivering a new feature what steps do you take to determine whether it falls into a premium or premium category yeah that's a great question and like so many of these there's an art to it and a science so the art side would be you know as a product leader and prior to that as a PM I try to regularly talk to real customers every week even if it's just one or two but keeping a regular pulse on the people using your product and that can give you a sense for you know is this something that is a real power user feature that only subscribers are going to be interested in or is it something that anybody would get value out of the other question to ask too is depending on how your product grows you generally don't want to put features behind the pay wall if they're critical to driving your organic acquisition loops and so in the case of Quizlet like we didn't pay wall content creation features for the most part because we wanted students and teachers to create sets which were essentially digital flashcards because those sets got indexed by Google and then drove SEO and so if we were to put that behind the pay wall we would kill our SEO flywheel so those are the two considerations I would think about um you know what do users willing to pay for versus what's kind of a nice to have and then what what will help uh Drive organic acquisition versus what won't if it's going to drive organic acquisition don't put it behind the pay wall that's this that's the art part of it the science part of it is uh the conjoint analysis I mean that's where doing the conjoint analysis and actually measuring quantitatively the marginal willing to pay for a particular feature is a really good way of knowing whether it's worth putting behind a pay wall or not all right we've got a another question here which is about introducing new plans other than that other than introducing new plans are there other Innovative monetization methods you're seeing work and this person is is especially wondering how llms could make this even more interesting sure well in my mind those are two largely separate questions I'll address the first one which is you know outside of launching additional plans can you improve monetization other ways so I want to separate tiers versus plans there are subscription tiers like tender plus gold platinum and then there are plan durations like monthly and annual or in some cases you know weekly or lifetime um for the most part unless you're a very large business you just want a single subscription tier having multiple subscription tiers is too complex for smaller consumer subscription companies because it's just too much complexity to manage and it's it's too much for consumers to think about only once you get to like tender scale should be thinking about multiple tiers um but having multiple subscription plans meaning monthly versus annual is a very good idea there are lots of tactics you can use on your pay wall and in your email Communications to nudge users towards longer duration plans like annual plans which tends to lead to higher ltvs um better long-term subscriber retention and more Revenue there are strategic discounting strategies you can use so one of my favorites is if you know that 90% of your new users convert into subscribers or convert into a trial within their first 48 hours after installing the app then hit any users who haven't converted in 48 hours with an email that offers them a 15 to 30% discount and then route them from that email to a web-based checkout flow which means you'll avoid the 15 to 30% App Store fees you'll end up net neutral on the revenue you get from that user but you'll be able to convert them at higher rates because these are lower lower intent users who haven't already converted into subscribers in the first 40 hours so there are clever things you can do to improve monetization without the really heavy-handed approach of launching like a second or a third subscription tier so we've got a question here related to uh the van westendorp and conjoin analysis and it's all about sample size how do you ensure that you have the right sample size for these types of analysis analyses and is the data even helpful if you have a smaller sample size yeah that I'm I'm so glad you asked that because that is a really important question if you run a survey with 50 people chances are you're going to get some pretty inaccurate results certainly on a conjoint but even on a van West indor um I take the easy way which is I use a tool called conjointly to run all of my subscription surveys for the clients that I work with you can also use qual tricks momentum there momentum there are plenty of great tools out there that will calculate the necessary sample size for you based on things like um how many conjoint rounds am I going through how many different packages am I showing each user uh how many different features am I showing in each conjoint package so that would be my recommendation is like invest in a tool like conjointly or qual Trix that allows you to do this out of the box so that you don't have to do all the math yourself if you don't have the budget for that there are tools out there where you can figure out the necessary sample size it's just quite a bit more complex uh also analyzing conjoint without a tool like like the ones I described is is pretty difficult Van van westendorp is easier you you can manually do van westendorp but that's much harder with conjoin analysis so that'd be my recommendation as a rule of thumb like most of the subscription surveys I'm running I'm I'm doing sample sizes of like three to 400 respondents but with the big caveat that like if you want a segment by country or if you want a segment by people who are already paying for your subscription versus not or if you have five different user personas and you want a segment willingness to pay across those personas that's going to dramatically increase your necessary sample size another question related to just how you run these analyses and how you run experiments or think about changes does running simulations help with regards to price or plan changes this person has struggled with running effective simulations while trying to come up with price changes or even playing around with say annual versus monthly versus quarterly plans when you when this person says simulations I mean if they can clarify then that would help but but otherwise I'm going to assume they mean something like a Monte Carlo analysis or some sort of like simulated outcome of what different price points would lead to I've seen one or two examples of Monte Carlo analysis used at companies that I've worked at in the past but it's pretty unusual in general what I think works better is either just go run the ab test in the product which is ultimately the the final asset test but ideally if you have the resources to do it do a van westendorp Andor Contra analysis UPF front because it will give you a lot more nuanced understanding of like how will they get to pay varies by different user demographics or different personas or different geographies and then it will help to inform what prices you actually want to test in your product and it will also help to inform how you interpret the results of those price tests now let's zoom out a little bit this person has a question about how do we decide if a subscription model is the right model to adopt and they they they share an example let's say with dating sites there there could be an inherent conflict between what the business is trying to achieve versus customer lifetime value or in cases like video streaming there's a tendency to use free streaming with ads to improve economics versus pure subscription so how do you decide if subscription is the right model this is a great question and it's one right because all subscriptions are great because you can rely on money to keep coming in over time but if that's fundament mismatched with how your customer experiences the value of your product it's going to lead to problems and I think thumb Tac is an example of where early on thumb teac tried to monetize their platform as a subscription and it largely failed because you had a lot of homeowners who were only episodically using the product and so they they moved to a model where they were more monetizing based off of the leads that they were sending to the professionals uh and so subscriptions don't always work the to me the asset test for that is look at your core value promise like fundamentally what is the value you delivering to users is that value occurring frequently enough and does it occur for long enough over the long run that a subscription model makes sense and if the answer is yes subscription can work if the answer is no you might want to look at other models now there are cases like dating where even though a good number of your users are going to churn after the first three four six months if you monetize them highly enough in those first three to six months it may not matter right because Bumble and tender get a lot of acquisition through free organic growth and because they have multiple subscription tiers in an app purchases that mean really high average revenue per subscriber the the business model still works really well so that doesn't fundamentally mean you can't build a subscription business even if your average subscriber lifetime is only six months it just means it's harder so let's talk about the model a little bit more let's say we have a leaky bucket problem is there an opportunity for a business to reignite growth in with the subscription model when there's a leaky bucket how would you re-engage those users that you've that have lost trust or interest in your product and it is is it even worth it to try and re-engage th those users or should you find new ones so I'll break that into two parts there's reactivation and there's retention reactivation is something that is notoriously overestimated as a growth lever because if you if you've been around long enough and if you have enough dormant or turn subscribers The rationale is wow we've got thousands or hundreds of thousands or even millions of turn subscribers right if we can convert even 1% of them that's like found money well the reality is those are going to be among the hardest users to bring back into your product right they turn for a reason it's going to take a lot to get them back in the door usually the best way to do it is if you've launched a brand new premium product or set of features you tell them hey guess what our product has just fundamentally changed in ways that might interest you that could be a good way to do it but in general I don't see a lot of I don't see a huge amount of impact from me activation work what I see a ton of impact on is huge amounts of effort put into long-term user and subscriber retention and I know we're coming up on time here so in the interest of time I'll just point you to um Jorge Ma's post on Lenny's newsletter that's um how dual lingo re re reignited user growth is all about they developed a growth model they looked at which metrics within that growth model were most correlated with long-term um user and uh subscriber Revenue growth and what they found was current user retention meaning maximizing the retention of their existing dius who are already using the product was the number one metric they should focus on to accelerate the growth of the business and the post goes into a lot of great detail on how they went about that great Phil thank you so much I know we're at time why don't you close us out sure yeah I just wanted to take one minute at the end here to um to publicize my course so for those of you who like the webinar today um I do teach this reforge course on consumer subscription growth it's one of the top rated courses in the entire catalog uh net promoter score well over 70% um more than 200 uh members have taken it across some of the best uh tech companies in the business you can see a few of those uh companies on this slide um so we love to have you and the next cohort is starting in just two weeks so we have our first live event on the morning of Tuesday September 17th uh but the first async review will start Tuesday September 10th basically the course runs for four weeks in week-long Cycles uh first week we cover the subscription value loop as a framework and then we do deep Dives on value creation value delivery and value capture and hopefully you've gotten a sneak peek today of what's covered in the course but it's only the tip of the iceberg so uh what the course goes into is a lot more case studies a lot more specific tools and templates and tactics that will help you apply these lessons at your own company and then we have these four amazing featured guest speakers U Robbie meta who is the CPO at tender Gina goth who led marketing and growth at dualingo for for several years um Yuri ton who led marketing and growth at grammarly for nine years years and then Jason Vander who is still leading growth engineering at straa um and so four four great applied examples of uh how to use this framework to maximize the potential of your consumer subscription business um so if you're interested would love to have you feel free to reach out to me anytime on LinkedIn if you have questions or you can reach out to reforge as well uh and with that I just wanted to end on a positive note I think there was a little bit of like uh wet blanket hey consumer subscription is hard but the way I look at it is it's fun being the underdog right when when people underestimate you uh that just means you have every opportunity to surprise them and I think there are a number of things changing in the consumer subscription app ecosystem right now that are going to make it easier and easier for for Consumer subscriptions to have more of these breakout success stories um so hopefully some of these tools that I've talked about today help you beat the odds and I'm looking forward to talking more phenomenal love that ending note Phil thank you so much for sharing your expertise with everybody we'll be sharing the excuse me we'll be sharing the slides and the recording with everyone that registered for the event so be on the lookout otherwise thank you all for joining have a great day thanks so much everyone