Buying vs. Building: Scaling Beyond a Single App — Josh Peleg, BlueThrone

“And what we learned at that point was that so many of them have been pumped full of revenue at the time of sale. So after you buy them, they start to die. But also, because they're quite shallow products, their longevity is very limited.”

“So, Blue Throne 2.0 is really about finding apps that have found product-market fit, that have a lot of organic traffic, which is a great signal for us because it means no one is being paid to download your app.”

“We hired a killer GM from Spotify, actually, to manage this music app. We grew the team from 5 to 15 people. And we grew the MAU from 200k to almost 6 million today.”

“We recently built this UGC machine at Blue Throne. It took us six months to get our first viral video. And that's not one person's time. That's multiple people across multiple disciplines doing the research, doing the execution.”

“And one of my projects back there was to build the physical merchandise line for this game.”

“Now, they have a subscription, which is capturing majority of the value of the users. But they also have consumables and power-ups that, for example, let you discover two times more songs in your area.”

“He lives in Brazil and he walked away with over $4 million because he didn't raise any VC money, he just built from the ground up from his bedroom.”

“The whole logic is, they target knowledge workers and they say, "If I can reduce your screen time by 50% a week, you'll be making more money in your probably high-paying job. And that more money you're making is well worth more than the 120 bucks a year you're going to be spending on my app.”

“But to their credit, they have since actually built out that tech. So, to your point, maybe you build a painted door app where you prove out that people are willing to pay for this and then you go build it.”

“So, to pump revenue would be something like, in your paywall, you optimize the UI and UX so that you're really pushing that lifetime subscription, which is, let's say, $100-”

“They cut marketing from 50 to 10. And once they cut marketing from 50 to 10, they still kind of run off of the cohorts they previously bought. But at some point, the downloads are going to follow that drop as well.”

“But the real unlock we've seen from Blue Throne's level, talking to hundreds of app founders a month, is the ones that can crack this generally can create deeper LTVs, which gives you way more breathing room on your CPIs and your marketing budget.”

“And one of the frameworks we use at Blue Throne is really the ROI of a dollar.”

“what you can see is that if you cross section it by downloads, every time a new app enters the market, the whole market grows.”

“And then three, six months later, you start seeing them do subscriptions that get access to both products.”