Burner · B2C · second phone number app
Charge $1.99 upfront and price credit packs to cover phone costs
About $50K revenue on launch day
What they did
What happened
- Stage
- launch
In their words
Pivots, Funding, and Building Apps That Last – Greg Cohn, Burner
David BarnardWow.
Greg CohnAnd then it included a free phone number for seven days or something. And then you could re-up it like credits. It had its credit system. It was elaborate thing. You could buy three, eight, 15 or 25 credits for different price points and then different configurations of phone numbers to extend them. But that's what it was when we launched it. And we priced it out so that we would basically, if a user used every bit of what they were allocated in terms of texts and call minutes that we would... And after Apple got their cut, we would break exactly even on the Twilio costs. And then anything that a user didn't use was profit, basically. So, any breakage was profit.
Greg CohnAnd when we launched, we had like $50,000 in revenue on the first day, right? So, we just got picked up. It was I think GigaOm that covered us and we were on Hacker News as a top story. It was generating debate. You can't recreate that today. Like you said, it's not South by Southwest in 2012, but analogs of that exist today on TikTok and Instagram and anyone can go viral for a feature. And so, we had a little moment where we had initial …
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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
- 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
- Buy small apps that fit your users' needs and sell them inside your main app
Tags: app-store, paid-download, credits, breakage, unit-economics