Under the Radar

Pillar II: Monetization


00:00:00   Welcome to Under the Radar, a show about independent iOS app development. I'm Marco Arment.

00:00:05   And I'm David Smith. Under the Radar, it's usually not longer than 30 minutes, so let's get started.

00:00:09   So a couple episodes back, we did an episode talking through what we sort of outlined as the

00:00:16   three pillars of app development. So the pillar number one was acquisition, pillar number two is

00:00:20   conversion, and pillar number three is retention. And those are the three sort of like legs to the

00:00:26   stool, that if you want to build a sustainable business, you want to have an indie app career

00:00:31   that has sort of length and sustainability to it, these are the kind of things that you need to pay

00:00:36   attention to. And so this this week, we're going to go into the second of those pillars and kind

00:00:41   of talk that through. And so we're going to talk about what I'm calling conversion. And is broadly

00:00:46   you could also call monetization. But it's essentially it's the now that you have a user,

00:00:51   so you've gone through the acquisition phase, you have a user, what are you going to do with them?

00:00:55   Right? And obviously, part of this is you're providing them utility. But for you as a

00:00:58   developer, there is something that you are presumably hoping to get out of that. And this

00:01:03   is most often money in terms of if you're running a business, this is what you're doing. But it's

00:01:07   also just generally what is the reason that you made this app? And what are you trying to

00:01:11   accomplish? And I think it's something very important to start off with ever you whenever

00:01:15   you start to think about how you're going to sort of monetize or convert the use of your app is to

00:01:20   be very specific and realistic and honest about what it is that you want from the app. Because

00:01:27   very often I think I've seen in people, you know, and friends and colleagues and people I've worked

00:01:31   with over the years is the sense of it's, if you don't aren't clear with yourself about what you

00:01:37   want this app to be, it's very hard for you to then structure your work and align things towards

00:01:42   that. And as an example of this, it's like whilst many people are, you know, are an app indie app

00:01:47   developer, because they want to, you know, make a living of this have be a business. There are also

00:01:52   many people who I think kind of vaguely would say that but in reality, what they really like is they

00:01:57   just like making software and putting it on the App Store. This is a side hustle for them. It's

00:02:00   a thing that if you know, if it buys them a cup of coffee every week, like that would be amazing.

00:02:05   Like their goal is not really to truly convert the app in that way. It is more something that

00:02:10   they're doing as a hobby as a passion project as something that they are doing on the side.

00:02:16   And if you're going down that road, then you don't need to worry about some of the aspects of this in

00:02:20   quite the same way. And I think in many ways, you would be have more fun, get more enjoyment from

00:02:24   your hobby, get more satisfaction from this process, if you were honest about that, and just

00:02:29   didn't try and go down these roads and went through all the pain and suffering that's involved in

00:02:33   setting up, you know, in app purchases or subscriptions, or the dealing having to deal

00:02:36   with app review for a lot of that stuff. Like there's a lot of these aspects of this that are

00:02:40   becoming increasingly complicated the more you go down this road. And so I think it's just something

00:02:45   to about before you even start, it's like, what is your goal? If your goal is to make a living is your

00:02:49   goal to make an app that will one day be acquired is your goal, you know, to sustain and support a

00:02:54   large team of developers. Like depending on where your goals are with that, you're going to have

00:02:59   very different sort of requirements and baseline things for what you can do as a result. Because if

00:03:05   your goal is ultimately, you know, to be acquired, well, you don't really need to convert users very

00:03:09   much, you just need to keep acquiring them and keeping them like follow focus on pillars one and

00:03:13   three, because the goal is to really just have a nice big wide user base. But if your goal is to

00:03:17   make like kind of a very nice stable level income, well, then there's certain kinds of income streams

00:03:22   that you're probably going to be much more important to pursue. And so just like before you

00:03:26   do anything, like start with the end in mind there and understand what it is you actually want. And

00:03:32   then you can decide, well, how am I going to convert user activity into whatever it is that I

00:03:36   want? Yeah, and I think it's important to leave doors open wherever possible for you to change

00:03:41   your mind or modify as you go. So for instance, like, if your goal is to get as many users as

00:03:47   possible, to leave that door open, you have to either have funding, or run things very, very

00:03:54   cheaply. So that way, if you get a bunch of users, and you haven't figured out monetization yet, you

00:03:58   don't want to really like stop the flow or restrict the flow of new users coming in. You want to be

00:04:03   able to keep running what you're doing as cheaply as possible. So what kind of business are you

00:04:07   running? What kind of features do you add? How do you implement those features? You know, if you're

00:04:11   not going to have, you know, a huge staff of people, then for instance, you probably shouldn't

00:04:15   have features that rely on major server resources or human review or human involvement in the content

00:04:22   that's on the service or that's in the app or whatever, you know, because those are all very

00:04:26   staff heavy or server cost heavy. There's all sorts of decisions you can make, and it really

00:04:30   depends on what you're building. And so this is going to be kind of general, broad advice that's

00:04:36   not going to apply to everybody, because the answer to every single business is, it depends.

00:04:41   But we'll try to do our best here of, you know, what, you know, broad themes you should be

00:04:46   thinking about. Yeah, because I think it's what we can do here is hopefully is like, I'm, I think

00:04:51   it's easy to think of monetization as there's like, there is one path that is like the best.

00:04:57   And there's perhaps the for any particular goal, there may be a sort of best thing or generally,

00:05:04   like a good place to start. But I think my goal in this is that really, it's just to kind of

00:05:09   lay out this broad menu of different ways that you can sort of convert user activity into benefit to

00:05:15   you. And by looping, you know, sort of having this wide view of that, it can give you much more

00:05:22   opportunity to tailor what it is to you and to give yourself flexibility in the future. Or if

00:05:26   you find yourself in a place that one path isn't working, very often you can change business models.

00:05:31   I mean, I've done that in I think, almost every one of my apps that is, you know, had any kind

00:05:35   of longevity, the ultimate business model or way that I'm sort of seeking to convert users has

00:05:40   changed over time, some of them started with ads, and later had subscriptions, some of them started

00:05:44   with subscriptions, and then later had ads, some of them started as one time in app purchases and

00:05:49   went to subscriptions, like all those kinds of changes are very much possible and very much

00:05:53   things that you should be thinking of as you're going through this process of is there a better

00:05:57   form? Is there something else I can choose from the menu that is going to make this a better suit,

00:06:02   you know, fit either to your current needs as a, you know, individual, or to the app in terms of

00:06:07   the way that the platform is growing or changing, like, these are the kinds of things that it's just

00:06:11   always good to have in the back of your mind, like, is there a change because eventually,

00:06:14   you will probably settle into something I mean, I can say for, you know, it's like for pedometer,

00:06:18   plus plus and widgetsmith, they've now settled into something that feels really stable and

00:06:22   sustainable. It seems like overcast went through like seven business models in the first, you know,

00:06:27   the first couple of years, but it's, you know, for the last few has at least been very stable.

00:06:31   And I think it's like, eventually, you'll find something that probably works in the long term.

00:06:35   Oh, yeah. And really, I cannot overstate enough what you said about keeping it flexible,

00:06:39   keep your options open with business model as well. And don't be afraid to try to experiment

00:06:44   with different models or to make changes if one's not working for you. Because yeah, you're right,

00:06:48   like overcast, I've tried almost every business model there is. And even even settling now on like

00:06:54   ads plus plus a paid unlock for things. Even that I have done a lot of variation within that model,

00:06:59   and a lot of different different types of ads, what different things that are unlocked different

00:07:03   methods of unlocking them, like it and it took me a while to figure this out. And in large part,

00:07:08   one of the big reasons why I didn't really succeed that much with Instapaper over time, is that when

00:07:15   the environment around it changed, I didn't change the business model with it, I stuck with my old

00:07:20   business model forever, and I drove it into the ground. And with overcast, I'm I consciously was

00:07:26   trying to avoid that. And, you know, leave my options open, start with a more defensible

00:07:31   business model, a more resilient business model, and be willing to experiment with new things as

00:07:35   time went on. And that's that's worked much better for me than, than holding on to the one forever.

00:07:39   But anyway, so let's talk, you know, monetization models. And I think the the number one that many

00:07:46   apps use then for very good reasons is ads. By the way, we're brought to you this episode by Factor.

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00:09:12   Our thanks to Factor for their support of this show and all of Relay FM. See, ads work, ads are

00:09:17   great. Everyone gets what they want. You get a free show and we and the advertiser gets customers

00:09:22   and we get money for doing the show and everyone has what they want. And it couldn't possibly be

00:09:26   more complicated than that, right? No, I mean, I think ads are amazing. And I think and I say

00:09:31   that as someone who makes a very meaningful part of my app, and I think I've my income from them,

00:09:36   because I think what's amazing about ads is I used to have a very broadly negative view on them,

00:09:41   right? That in the sense of like, oh, ads, they clutter up the UI and all these things. And like,

00:09:45   that is true. But the reason they are pervasive and that they exist in lots of places is because

00:09:51   they work, right? It is, most advertising, at least the kind that you would put in an application,

00:09:58   is my is you know, I get paid when someone clicks on the app or on the on the ad. Like they I don't

00:10:05   make any money just for showing it. Typically, it's like I make money for you know, it's like

00:10:08   based on the number of clicks. And inherent in that is the understanding that like lots of people

00:10:15   click on the ads that they see in my apps. And they're clicking on them presumably because they

00:10:20   see something interesting, intriguing that they get some value from, like there is a

00:10:25   benefit to to them and to the, you know, to the advertiser that the advertiser is trying to get

00:10:31   awareness or attract users for whatever it is. And, you know, I'm providing a method for making

00:10:37   that connection. Like, I don't love ads as the like, if I only had to pick one method of

00:10:42   monetization, I don't think it would necessarily be ads, there's some issues and problems, you have

00:10:46   to be very careful about what the kind of ads you show, who's you know, which brokerage you're using

00:10:50   to show the ads, like, there's a lots of issues with them. But the main thing that is so amazing

00:10:55   about them is like that ads are almost the like most directly connected form of monetization,

00:11:02   where app, you know, you make money, the more your app is used, like that is a beautiful connection

00:11:09   that you can't get from hardly anything else that mean you sort of to some degree, you can get it

00:11:14   with subscriptions. But that's even that that's a much more limiting, challenging thing. Because

00:11:19   with ads, the nice thing is, there's no upfront cost to the user, there's no limit on that user,

00:11:24   you're just putting the more they use the app, the more that you will make money from the ads. And so

00:11:29   you have this delightful kind of like, passive connection that is both motivating for me as a

00:11:35   developer, because the more I you know, if I can encourage more people to use the app, more people

00:11:39   will view the ads, and I'll make more money like that's great. Like that kind of past the sort of

00:11:45   the passivity of it is just a really nice thing. And when I say passivity, it's like you can have a

00:11:49   passive form of monetization or an active one, like, am I requiring the user to really be active

00:11:55   and do something, you know, I do have to open their wallet, maybe is like that, that that level

00:12:00   of engagement, whereas, you know, the past conversion with ads, they just need to be there.

00:12:04   And that is kind of a powerful thing. And it's a great place to start, if you have an app that will

00:12:08   kind of work well with a large number of users, or even if you just want your app to be used by a lot

00:12:15   of people, like there was something just purely fun about, you know, having an app that's used by

00:12:20   lots of people. And if that's something that is desirous to you, like potentially think about

00:12:23   putting ads in it, like, I don't think there's that's necessarily a bad thing or a problem.

00:12:27   And it means that you can not have to worry about this, you have to put up any gates,

00:12:31   you don't have to put any paywalls. It's just you just show ads. And I think there's a simplicity

00:12:36   to that, that I think for a long time in my career, I would just sort of like shy away from

00:12:41   for kind of these vague, philosophical reasons. But like, the more I've been doing this, the less

00:12:47   I feel like I have those things, because ultimately, the reality is, like, the ads

00:12:52   are useful to the people. And if you're doing them in the right way, I think you can do ads in a

00:12:56   really, you know, sort of skeezy way. But broadly speaking, like, you know, the ads that are shown

00:13:01   in overcast, that are showing people podcasts that they might be interested in, in subscribing to,

00:13:06   like, it's a form of, you know, it's almost a form of discovery, in addition to, you know,

00:13:13   a form of revenue for you. And so it's like, in some ways, it's like, all three of us win,

00:13:17   like the publisher, you know, it's like, I benefit, the advertiser benefits, and the user

00:13:22   benefits in some ways as well. So it's like, it's a very virtuous thing that is hard to get,

00:13:26   like a win, win, win, in a lot of other ways. Yeah, and I think it's, it's, it really gives

00:13:31   everybody what they want. And that's, again, it's something that is not going to work for

00:13:36   all apps, in the sense that you, what you need for ads to work is you need a high amount of

00:13:44   relatively low value engagements with your app, because the ads are going to pay you a very,

00:13:50   very, very tiny amount of money each time they are viewed or tapped or whatever. And so what makes

00:13:56   ads work is apps where people are coming back to them frequently and using them frequently.

00:14:01   So there are certain business models where this is not going to work very well. For instance,

00:14:05   if the number of users is going to be very low, because the app is extremely specialized.

00:14:09   So for instance, if you're making something that's like, I want to make software for the people who

00:14:14   service the machines that are used in dentist offices. Okay, probably, I'm sure there's markets

00:14:18   for that. But it's going to be difficult to make a large ad based model for that, because that's

00:14:23   going to be a much smaller percentage of the user base out there than like, something that people

00:14:28   who like listening to music would use, for instance, like that's a much larger group.

00:14:32   Similarly, you know, if you think about something like those apps where if you have a corrupt camera

00:14:37   SD card, and you want to like undelete files on an SD card, data recovery apps, this is something

00:14:43   that most people don't need. When you need it, you really need it. And generally, you really need it

00:14:49   once. And then you never need it again. So it would not make sense to have an ad based version

00:14:54   of that because you're getting a very small number of people something that has very high value to

00:14:58   them once. And then they're probably not using it a lot after that. So if you made a penny from that

00:15:04   ad that was shown, that's not a great business model for that case, whereas you could have

00:15:08   probably charged them 30 bucks for the app or whatever, you know, and they would have had the

00:15:12   value in that. So it depends on, you know, again, everything depends. But it's useful to know, you

00:15:16   know, what kind of situations ads are useful for. And it's what you would think high volume, you

00:15:22   know, frequent engagement kind of apps. So you know, an overcast case, it makes perfect sense,

00:15:26   because typically, if you will listen to podcasts at all, you probably listen to them regularly.

00:15:30   People who use overcast tend to use it every day, or at least every couple of days or multiple times

00:15:36   a day. So you know, they're in there a lot. So you know, judgment wise, ads are great, too, because

00:15:41   if you if you're being very precious about your app pricing, and you're saying my app is going

00:15:46   to be paid up front or paid only somehow, and I just don't want to put ads in it. I mean, look,

00:15:52   again, for many apps, that makes sense. However, there will be a lot of people who will be

00:15:57   interested in your app, which is a very, very hard thing to get like people who are interested in

00:16:02   your app, that's that's a very valuable resource, that if you try to pay for that resource,

00:16:08   sometimes by buying ads, it's very expensive to buy that resource. So you if people are already

00:16:12   interested, that's an amazing thing. And if you turn them away with a paywall as the only way to

00:16:17   experience your app, you are turning away a valuable resource. And depending on what you're

00:16:22   making on the other side, that might be worth it. But it's useful to know, okay, I'm turning

00:16:26   away these people. So it better be worth it. Because otherwise, if you offer a free version

00:16:31   with ads, then you get to capture basically 100%. I'm obviously not quite but like, you know,

00:16:38   all the interest that is in your app, you will be able to capture all of it because all the people

00:16:43   who are interested enough to try it for free, but not interested enough to pay you 10 bucks a month

00:16:48   or a year or whatever, you will capture way more of those people than zero. Whereas if you don't

00:16:54   have any free option with ads, then you will get none of those people. You know, you only get the

00:17:00   ones that are willing to pay you who are very interested or very wealthy or whatever. And you're

00:17:04   turning away huge parts of that market. So again, it depends on what you're going for. If you're

00:17:09   going for a market where things are specialized, or people are, you know, have more limited options,

00:17:14   or are desperate for some reason, or have very high value associated with your app, then it's

00:17:19   like, you know, charging for food in a baseball stadium, you can charge whatever you want,

00:17:22   and people will come. But if you are in kind of the broader environment of, you know, this huge

00:17:28   sea of apps that most people can take relief, because there are just so many to choose from,

00:17:32   it's best to let as many people in the door as possible who are already knocking on it.

00:17:37   And I think something you said that is just really probably worth like expanding on is this,

00:17:42   the sense of, whenever we're trying to monetize our app, it's an understanding of looking at your app

00:17:48   and seeing, there's a spectrum of sort of user engagement, and the value that the user is

00:17:56   receiving from your app. And like that, that is any sort of exists on a spectrum where you could

00:18:01   go from the, you know, on the one end, you are, you know, you're in your example, it's like you,

00:18:06   you have an application that is going to retrieve someone's wedding pictures that only exist on this

00:18:11   SD card, and the value to them is like functionally infinite, like there is a tremendously high value

00:18:18   on your ability to do that to them. And it goes all the way down to the other end where

00:18:22   the app is providing just sort of like light amusement, like barely, it's barely useful,

00:18:27   very like if there's a very and not not like I'm not saying that in a judgmental way,

00:18:30   but it's like it's a different kind of utility that you're providing. And your hope in monetization

00:18:35   is to sort of capture all of the different levels of utility that your app is providing,

00:18:42   and to sort of capture that utility and that value to the user in terms of value and revenue to you.

00:18:49   And like advertising is fantastic for places where the utility that you're providing is only sort of

00:18:55   slightly valuable to the user, that it's the nature of what it's doing is that each individual

00:19:00   interaction, each individual thing is relatively near low value to the user, if a user didn't open

00:19:06   your app that one time, it's not going to make a huge impact to them. And so if you tried to

00:19:11   monetize a kind of low value to the user, but potentially high frequency situation with something

00:19:17   other than ads, you're almost certainly going to sort of fall down because you're trying to

00:19:22   count you're saying, even if it's like, I'm going to offer I think the cheapest in app purchase you

00:19:27   can have is 49 cents, I think now something like that, like, and you say you need to pay 49 cents

00:19:32   to use the app. It's like these, these might say it's like, well, the app is kind of like

00:19:36   only providing me with a 10th of a penny of utility. And so why would I pay 49 cents,

00:19:42   even though that's not that much money in absolute terms, but it's like there's a massive mismatch

00:19:46   there. Whereas with ads or those kinds of models, it's like you're providing them with a 10th of a

00:19:52   penny of utility, and you're receiving a 10th of a penny of you, you know, of income back from them.

00:19:57   And so there's a beautiful similarity to that. But then as you move up in the sort of utility

00:20:02   spectrum, that's where you can start to get into other ways potentially of trying to capture

00:20:06   that value that you're creating. And that's where you start to get into like either in app purchases

00:20:12   or subscriptions or places where you have more opportunity to capture it because you're targeting

00:20:18   someone who's getting more out of it. And this is very often and very commonly is, you know,

00:20:23   you'll have the base use case of the application, where it is, you know, sort of broadly applicable,

00:20:29   but the relative utility is a bit lower. But then you have areas of the application or certain users

00:20:34   of your application for whom it may be like, Oh, I'm the, I'm the power user, I'm the one who uses

00:20:39   this in a very powerful way that provides a lot of value to the user. And as soon as you start

00:20:44   providing more value to the user, you create more space for you to sort of like, I guess, I don't

00:20:49   know, harvest that value. Like it sounds a bit negative, but I think it's like a good model for

00:20:53   this is you're trying to kind of keep in step with your user, if you provide them more value,

00:20:58   they should be providing you with more value as well. And like that balance is a good thing,

00:21:03   because that means it's incentivizing the right things that I'm as a developer incentivized to

00:21:08   give the powerful, you know, very advanced user of my application a wonderful experience,

00:21:12   because by providing that to them, you know, I'm making money, they're making you sort of utility,

00:21:18   and everything works out. And so like, you're trying to match those things along the spectrum.

00:21:22   And I think right now, the main way that people tend to do that is with subscriptions in software

00:21:27   applications, like these were added as a means. Gosh, what was it three, four, five years ago,

00:21:33   something like that, where previously it existed only for content. But like, since then, it's been

00:21:37   huge, in terms of my ability to focus on, you know, sort of power user in, you know, features

00:21:44   in depth in my applications. And there's a new you have the same connection that you have in ads,

00:21:49   where there's a connection between the use of the app and the income you get from it, because the

00:21:54   nature of subscription is if you stop delivering the value, the subscription revenue disappears.

00:22:00   Whereas even in the paid upfront model, or the one time in our purchase, the issue is, once I've got

00:22:05   your money, I've got your money. And I the there's a mismatch of incentives, because the user wants

00:22:11   to receive that benefit forever. And I have no incentive to provide it to them. Like that is a

00:22:16   really tricky thing. And anytime I see a user who's a developer who says something sort of like the,

00:22:21   like a lifetime unlock or a lifetime thing, it's like, lifetime is a long time. Like that is a

00:22:28   really tricky place you're putting yourself into. And you're misaligning your incentives, whereas a

00:22:32   subscription is fantastic, because you are perfectly aligning your, you know, your incentives

00:22:36   where I continue to provide, you know, utility to the user, and they continue to get benefit. And

00:22:42   those two things work well. And that's like works fantastically for like, if in a lot of my apps,

00:22:46   I have this two tier model where I have, like high value customers and low value customers,

00:22:50   and my low value customers make me money, you know, my 10s of pennies from their engagement

00:22:55   with the ads, and my high value customers are on a subscription. And those two things work really

00:23:01   well in parallel, and provide a lot of opportunity for the app to have a really nice, sustainable,

00:23:06   dependable income stream. That for me has worked really well, and it's worked a lot better than

00:23:11   trying paid upfront or one time in-app purchase, or those kinds of models, which can work for

00:23:15   certain things. Like there may be a situation where that makes sense. Because like in the

00:23:19   example of the SD card recovery tool, it's like they may only ever use the app once. And so you

00:23:24   need to capture their value, like right away and in a one time purchase way in a way that doesn't

00:23:31   make sense to have a subscription to that, because hopefully they're not corrupting their SD cards on

00:23:35   a regular basis. Like that's a different problem. But generally speaking, for a nice, sustainable,

00:23:40   long term indie development kind of like lifestyle business that you and I both have and enjoy,

00:23:46   like that combination of subscription plus ads is like seems super, super good and aligns the

00:23:52   incentives so well for the long term. Oh yeah. And another reason is just diversity of income

00:23:57   sources. I mean, that's a huge benefit to any business. The ad market, for all of its benefits

00:24:04   of being relatively easy and satisfying everyone on all sides, the problem with the ad market is

00:24:10   that it's a rollercoaster. The ad rates go up and down like crazy. Right now we're in a down period

00:24:15   for most types of ads. I don't know anybody with an ad based business who is very happy about how

00:24:20   2023 went for them. Like overcast, overcast ad income is down something like 40% year over year.

00:24:28   It's a huge, it's the biggest drop I've ever seen in the history of me running ads, like and the

00:24:34   longest running drop so far too. But what's great about the business model is that that's not the

00:24:40   only way I make money. I also make money from the premium subscription to get rid of ads. And this

00:24:45   is such a good model for apps that have the kind of high frequent usage rates that things like

00:24:51   overcast have where yes, I have ads that most people see. And for some small portion of the

00:24:57   user base who don't like to see ads or who want the pro features or whatever, whatever that

00:25:01   differentiation is, they can pay me a subscription and then they don't see the ads and they get a

00:25:05   couple more features. That model is so effective because first of all, again, everyone gets what

00:25:10   they want. Most people who don't care about the ads, they get a free app and that's what most

00:25:15   people want. Most people don't like spending money and they want their apps to be free and they'll

00:25:19   put up with ads because they don't care. They'd rather see the ad than spend the money. For some

00:25:24   people that's flipped around. For some people, they would rather spend the money than see the ads.

00:25:28   And so both people can be satisfied. Both groups can be satisfied. And then I get a diverse stream

00:25:34   of income and the subscriptions are amazing because I've never had as reliable and steady

00:25:42   income from apps as I have with subscriptions. Like before, when I was doing paid up front or

00:25:48   when I was doing a one-time in-app purchase to unlock stuff, that was always an even bigger

00:25:52   roller coaster than ads. Talk about roller coasters. Your app would launch or you'd do a big

00:25:57   update. You'd get a big spike of revenue if you were lucky and then it would just trail off and

00:26:03   it would just crash down and you'd see that line just slowly going down over time as you're like,

00:26:08   "How do I get more people to use the app or get my existing users to buy an upgrade or whatever?"

00:26:12   Subscriptions are just even. There's some churn and there's some spikes here and there of new

00:26:18   users but it's way more even than anything else I've ever seen. I can count on that money every

00:26:24   month coming in and being roughly in a certain range and it's amazing. So I would strongly

00:26:30   recommend if your app works for that kind of model of ads plus optional subscription to get rid of

00:26:37   the ads for some reason, that is a great model to have. It works very, very well. There's a reason

00:26:43   you see it so often in apps because it works for everybody, for the customers, for the developers,

00:26:48   for the advertisers. It works great. Yeah, and I think that sustainability aspect of it is huge.

00:26:56   I think what I personally really enjoy about subscriptions too is that dependability is coming

00:27:03   from almost the inertia of your existing user base. We talked about this a while back when

00:27:11   I talked about the tyranny of the turn equation. It was a great episode. I'll have a link in the

00:27:15   show notes to it. But it's like because you have this existing group of people who are regularly

00:27:21   giving you money, you can start to very quickly get a sense and a model for how many of them will

00:27:28   continue to do that. And barring some dramatic change, like if you radically redesign the app,

00:27:34   maybe you'll have a big spike in drops or if you increase the price, maybe you'll get a big spike

00:27:39   in churn rate. But if you don't do much, if you just keep the app ticking over in a really positive

00:27:45   way, taking care of your customers, those numbers become very stable and very easy for you to then

00:27:50   plan around. That you can get a sense of it's like, this is my churn rate, this is my growth

00:27:54   rate. You can do a bit of math and end up with like, this is what the app is going to almost

00:27:58   certainly going to make next month. And being able to make those kinds of then you can make choices

00:28:03   and decide things about, you know, what costs make sense to take on. Oh, maybe I'd like to hire a

00:28:09   designer to do work on something. It's like, great, you know, whether or not you're going

00:28:12   to have that money in a way that you're not reliant on kind of the next customer. You're

00:28:19   relying on the previous customer. And that is such a wonderful place to be. And honestly, I kind of

00:28:24   just love the philosophy of it. It almost feels like I have this group of people who my number

00:28:30   one job is, is to take care of them. And that is a kind of a nice, like warm feeling in a way that

00:28:36   if you're in the paid upfront model, which can work for some kinds of the one time in a purchase

00:28:41   model, it's like, your mindset is much more of you're hunting, like you're trying to find the

00:28:47   next customer. You're out looking for someone else, versus the kind of like inwardly focused,

00:28:54   like, okay, these are my people. And I'm going to take good care of them. And you hope that more

00:28:59   people will join that group. And you should still probably be out, you know, every now and then go

00:29:02   out and do some hunting. But more generally speaking, you can just take care of these group

00:29:06   of people who've demonstrated that they really care about what you make. And if you take care

00:29:10   of them, they'll take care of you. And like, those are the line incentives just work so well for this

00:29:15   and can make for it to be a lot that can be very stressful, much less stressful, which is highly

00:29:20   recommended and I enjoy. Thank you for listening, everybody. And we'll talk to you in two weeks.

00:29:25   Bye.

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