Podcast Episode Notes: Subscription Value Loop
Hosts: David Bernard, Jacob Eidinger
Guest: Phil Carter, Independent Growth Advisor and Angel Investor
Introduction
- Phil's background: VC and product leader roles at Fair, Quizlet, Ibotta.
- Discussion on subscription value loops and creating robust customer value.
- Insights into why A/B testing isn't the first step in price optimization.
Phil's Journey and Experience
- Initial career in consulting, then first employee at car-sharing app Wheels.
- Venture Capital role focused on consumer mobile investing.
- Move to Colorado for lifestyle reasons, subsequent roles in product and growth leadership.
- Joined Quizlet to lead growth team, attracted by product and business model.
Quizlet's Growth
- Quizlet's low-cost user acquisition: Word of Mouth and SEO.
- Focused on replicating growth in international markets.
- Developed a quantitative growth model: 6 key actions and 4 growth loops.
- Importance of tailoring models to each company.
Subscription Value Loop Framework
- Value Creation: Robust, Rapid, Repeatable, Remarkable.
- Robust: Strong product-market fit.
- Rapid: Quickly convey value to users.
- Repeatable: Sustainable, ongoing user engagement.
- Remarkable: Generate word-of-mouth and community.
Value Creation in Detail
- Robustness: Solve a real pain point and achieve strong product-market fit.
- Example: Superhuman's iterative approach to product-market fit.
- Rapidness: Engage users early; achieve 'aha' moments quickly.
- Examples: Rise and Noom demonstrating quick value realization.
- Repeatable: Long-term engagement and retention strategies.
- Example: Fitness trackers and subscription content offerings.
- Remarkable: Create a remarkable product that drives word of mouth.
- Examples: Tinder's swipe feature, Strava's community.
Value Delivery
- Efficient acquisition of users through organic methods.
- Examples: Quizlet's SEO, AllTrails' local search advantage.
Value Capture
- Essential for sustaining and growing the business.
- Must balance value creation with capture, reinvest in product.
- Five Ps of Value Capture: Paywall, Pricing & Packaging, Payments, Promotions.
Paywall Strategies
- Make paywalls visible, align them with key product experiences.
- Customize paywalls based on user entry points.
Pricing and Packaging
- Use Van Westendorp and Conjoint Analysis to determine optimal pricing.
- Segmentation and survey tools help refine pricing strategies.
Payments
- Consideration of alternative payment methods.
- Transparent purchase flows and ethical subscription practices.
Promotions
- Effective use to align price with user willingness to pay.
- Need for targeted and thoughtful promotions.
Conclusion
- Phil's contact info and upcoming course with Reforge on consumer subscription growth.
- Reflection on the value of building community and sharing knowledge in the subscription app space.