Sunflower · B2C · addiction recovery app
Start free like Duolingo, then add a monthly paywall once AI costs pile up
Free model failed: investors wanted revenue and AI costs hit hundreds of thousands
What they did
What happened
In their words
Koby Conrad - I speedran an ai app from 0 to $1m/yr in 10 months
JosephThe other thing I noticed was like the revenue growth. You grew like pretty fast in revenue. How did you do that? Let's talk about like paywalls maybe, and subscriptions. You have a $9 a month subscription, or like a $35 a year. How do you increase your revenue?
KobySo, we started off as a free product. Um like I take a ton of inspiration from like Duolingo, and I was like Duolingo's really cool. They I think they spent like 6 or 7 years before they started charging money. I was like, "I'm going to do that. So like I'm just going to go get like tons of users on my platform and then um we'll figure out revenue later."
KobyUm turns out, uh investors want to see money, that just having usage isn't good enough in this environment. Also turns out AI token costs for us were just like scaling just like hundreds of thousands of dollars, and we're like, this is not going to be sustainable.
KobySo, we introduced our first paywall, and our first paywall was just like a monthly subscription, and that's where we started, was just like, please pay us like a set dollar per month. And then we very quickly realized like the the next iteration of our paywall journey, put the thing you want them to do as the default option.
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More from this episode
- Hire the biggest creator in your niche as a salaried team member with equity50-100K link clicks a month from one creator; founder calls it the core of go-to-market
- Get the best-known expert in your field to be the face of the companyGiven as an example of the approach working; no numbers
- Ask conferences what they'd give you for double their top sponsor packageFounder says it beats small test buys: better treatment and brand effect; no numbers
- Launch a bare-bones first version with three features, then keep improving itUgly v1 grew into the current product; no early numbers given
- Add a yearly plan and pre-select it on the paywallAdding annual brought some annual revenue; defaulting to it brought 'a lot more'
- Default to paying now, with a toggle to switch on the free trialMade more money than the default-annual paywall; no numbers
- Lower your prices when your users have little moneyLower prices made more money; no numbers given
- Before the paywall, promise to remind people before their free trial ends+48% revenue, +70% annual revenue, +46% trial conversions, +30% trial starts
- Build everything around the one simple thing users do every dayTimer is the most important feature; AI chat alone had poor retention
- Let the in-app AI coach follow up on its own and reply in the community4M+ messages handled in a year; users say it saved their lives
- Pitch investors with revenue growth and a future vision, not user countsFirst user-focused deck failed; the revenue-and-future deck raised post-YC
- Put in your own money, then ask people you made rich to invest$100K of own money plus ~$350K from his network after years of no funding
Tags: free-to-paid, ai-costs, duolingo-model