Push the lifetime plan on the paywall right before selling the app

David BarnardSo let's circle all the way back around. We chased a bunch of rabbits, but we were talking about red flags for early acquisition. I wanted to throw one more in there. And if you're building that kind of app and you're thinking about an acquisition, a huge red flag is to try and juice numbers leading into an acquisition. So, just tell me about what you've seen and how bad that can be.

Josh PelegYeah. We've seen this a couple times where founders are getting prepared to sell, and so what they'll do is they'll try and pump revenue to make their numbers look really good. And what does that actually look like? What does that mean, pump revenue and pump growth? 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-

David BarnardAnd CBD. Yeah.

Josh Peleg... right? Yeah. And your monthly is 50 and your weekly is 10. So suddenly you're collecting those $100 much, much faster and more in the early days, which, on your P&L, is going to really bump up your revenue and, consequently, bump up your profit or EBITDA as well. However, to the person who's about to acquire that app, they suddenly cannot monetize those users that you've just sold a lifetime subscription to. So you're actually kind of shooting yourself in the foot. We've seen it happen a couple of times. I understand why people do it. It just ends up knocking down the negotiations further along the line, which is not great.

Josh PelegYou can also pump growth. You can also really put your foot on the gas on marketing. We see that happen as well. That's not as bad because it actually collects a lot of data for the acquirer and the seller as to how effective marketing is when you really try and push the budgets as high as you can go. And in fact, one of the first questions I'll ask when I'm getting to know a founder for the first time is I'll ask, "What's your marketing budget?" …