Ad Hoc Labs · B2C · privacy app studio
Buy small apps that fit your users' needs and sell them inside your main app
What they did
- Stage
- mature
In their words
Pivots, Funding, and Building Apps That Last – Greg Cohn, Burner
David BarnardSo, then you mentioned build, partner, buy. So, we've talked about the build and that's a struggle launching a brand new app and a new category and a huge investment and everything. The build and partner sounds like it's been a nice value add to the existing app, but I know you're starting to consider buying as well. What does that look like and how are you thinking about that?
Greg CohnSo, first of all, the underlying goal there is speed, right? So, it's how quickly can you build things or validate and then build things or partner in things and how much can you drive growth as you get bigger and bigger, as well as deliver complex features to users more quickly, right? It's like if you have the idea to do something, our customers would love it yesterday, right? So, yeah, we've been in a certain number of conversations to acquire apps.
Greg CohnThere's a, I think I mentioned it earlier, a little bit of a, I don't want to call it a death zone, but it's a tough sledding range where you've got some traction and you've got some revenue and maybe you even have cashflow to fund a certain amount of growth, but where do you go from there other than grind, right? We survived it. We got through any number of years that we had a very small team, we had to figure it out and know UA specialists on …
David Barnard… of apps anymore. They're buying individual apps, but the whole idea of there is individual apps that scale us their own businesses and a portfolio of businesses. But this is a really different opportunity. I'll do the pitch for you. If you're in this space and you think your app would be meaningful to the Burner audience and to the Burner brand, his number will be in the show notes, text Greg an idea and pitch him on why he should buy your app.
Greg CohnAwesome. I mean, yeah, I couldn't have said it better. Thank you. But yeah, I mean, I'm not bullish on app farms, right? And I think that by and large has not been validated by the market. It makes sense why people thought it was a good idea. And so, some very smart people were operating in that strategy. But I think I wouldn't want to own 10 $1 million apps, right? I just don't think there's that much leverage in trying to scale things that don't connect to one another, right? Whereas having multiple multimillion-dollar apps that are complimentary to one another, it's much easier for us to add five million in revenue to our app than it would be to take 500K app and turn into a $5 million app.
David BarnardYeah. Yeah. If you're trying to pump and dump, Greg is a very sophisticated buyer. That's not going to work out, but it makes sense. You're looking for the sleep stories to the calm. You're looking for secondary product market fit to build out this... And so, almost...
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More from this episode
- Test a throwaway phone number by posting it in real Craigslist adsFlood of calls and 10-100x the response of the old app; confirmed a real problem
- Demo the unreleased app to people at SXSW and collect a waitlistNew York Times interview and a panel slot; $50K revenue on launch day
- Charge $1.99 upfront and price credit packs to cover phone costsAbout $50K revenue on launch day
- Drop the $1.99 download price once there is money to cover free users
- Try a freemium version of an app where every free user costs moneyDidn't scale without lots of capital; stayed a premium, paid-first app
- Skip the next VC round and run the app at breakeven insteadBreakeven or profitable for 6-8 years, grew past $10M a year
- Add a monthly and annual plan with unlimited texts, calls and photosBiggest single jump in revenue in company history; subscriptions now 90%+ of revenue
- Phase out one-off credits so everyone goes through a subscriptionFairly high churn from short-term users; founder now thinks credits might have fit them better
- Capture people already searching for a second phone number instead of running brand adsSeveral million downloads a year of high-intent users; press-driven users didn't convert
- Add caller lookup for unknown numbers to the premium planVery popular and a driver of premium upsells; founder didn't expect it to win
- Offer 8 plans so short-term and long-term users pick what fits
- Let people choose on the paywall whether to take a free trialVery positive A/B test result; no numbers given
- When someone deletes their number, offer them a new oneRetains some users into a second number; 20-30% of new subs are returning users
- Add a white-label VPN inside the main app's premium planDrove a lot of premium-tier growth, but cost more to build than it should have
- Launch separate robocall-blocking and business-number appsNeither got real traction; one was killed by an Apple feature
- Use paywall tools so the product team can launch tests without engineersFrom 1-2 paywall tests a month to several times that; about 1 in 4-5 wins
- Judge paywall tests by projected customer lifetime value from day-8 and day-30 data
Tags: acquisition, bundle, cross-sell