Burner · B2C · second phone number app
Phase out one-off credits so everyone goes through a subscription
Fairly high churn from short-term users; founder now thinks credits might have fit them better
What they did
What happened
- Stage
- growth
This shipped together with other changes, so the result can't be credited to this alone.
In their words
Pivots, Funding, and Building Apps That Last – Greg Cohn, Burner
Greg Cohn… really important dimension of our business and growth. But at that time, that was just the beginning of learning about all of that. That was, I think our first subscription offering, we had monthly and annual, that's it. And now today we have monthly one line, monthly three line, annual of both of those. And then we have that standard end premium. So, that's eight SKUs right there. And then we have the credits that are buying up on top of that.
Greg CohnBut we did slowly deprecate credits on the back of launching subscriptions because our mindset at least originally was, well, we should move all of our users through a subscription model and the ones who have longer term intent will retain and the ones who don't will leave early. And so, as a consequence of that, we have reasonably high churn. And I look back at that decision and I go, "Well, we might've been able to fit to the curve even more efficiently if we had maintained a more front and center credits model for those users with lower long-term intent, but high short-term intent. So, we're constantly re-looking at that and testing things and you never know that may resurface at some point.
David BarnardYeah. No, it's fascinating. And it's fascinating too that, and I didn't know this about Tinder, but talking to Ravi in the last episode, he said, as with you, most of the in-app purchase revenue is from subscribers because it's a force multiplier of the subscription. It's not as much a standalone, but I think it can be all things. And so, for you right now, it is mostly subscribers, but maybe there is an opportunity for non-subscriber and to add …
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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
- 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: credits, consumables, churn