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.