Practitioner pattern · Eric Crowley (Investment banker who earns fees selling consumer subscription companies; was sell-side advisor to Runna in the Strava deal.)

Build a web checkout to win back 15-20% margin from app store fees

Every one of the banker's clients is building or evaluating one; big wins at $100M+ revenue

Mixedpayments-checkoutweb-to-app

What they did

Over the last two years every GP Bullhound CSS client has built or is actively evaluating web funnels, now that court rulings stop Apple jamming app review over external payment links. Use payment providers such as Paddle, Solidgate or Stripe to handle subscription billing and tax. Worth most at scale ($100-200M revenue means multiple millions of profit); Eiting says roughly past $1M/month revenue. Caveats from hosts: mature subs already pay 15% so the gain is not the full 30%, porting an existing subscriber base takes time, and some apps convert better in-app.

What happened

15-20% of profit margin back for apps at scale; hosts note it is working for many but is not a slam dunk for every business.

Stage: scale

In their words

Why AI Probably Won’t Kill Your App (But Ignoring It Will) — Eric Crowley, GP Bullhound

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Eric CrowleyThat was for two reasons. One, it's hard a third payment rail and go through building on that tech and working on web funnels. That was hard. If you weren't big enough or, hey, if the business is working great, why do something hard? Just don't fix what isn't broken.

Eric CrowleyBut then I'd say the last two years, everyone of my clients, and I do mean everyone, is building web funnels. I think, one, they're just not as worried about Apple coming after them or being mean. We've all heard stories about product updates getting jammed up and going through multiple rounds of reviews because you had a link out to a different payment tool. Apple got their hand slapped and they got their hand slapped hard for doing that. I think that was proven that they were jamming people up a little bit.

Eric CrowleyI think, one, they've said, "All right, great. We're going to back away from that." People that are building apps of scale, getting 15 to 20% of your profit margin back is a big deal. It's a big deal, especially when you're $100, $200 million in revenue. We're talking about multiple million dollars in profit. It's crazy not to build for that. I would tell you, every one of my clients is now... If they haven't built a web funnel, they're actively looking at it. I think we've seen a lot of payment providers come up there, like Paddle, Solidgate, Stripe even that are helping people manage subscription payments, manage the tax withholding, all that type of stuff that automates, once again, what was a hard problem to do.

Eric CrowleyI think even you guys were thinking about doing something on that front. I think that's really exciting, and then I think people have just said like the fear of Apple is going down a little bit. They're still a super valuable partner. Most people will never throw out their hands and leave, but I think the word is out, "Hey, guys. It's okay to build for this stuff and easier to do it than ever, so why not go pick up that money?" That's what I'm …

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Tags: web, app-store, google-play, web-checkout, app-store-fees, margin