Practitioner pattern · Josh Peleg (Heads M&A at BlueThrone, an app acquirer he pitches as a buyer for founders during the episode)
If you charge under $10 a month, test $20 on 10-20% of users
What they did
In their words
Josh Peleg - $172M of App Building Advice in 50 Minutes
Joseph Choiif the $10 a week churns like most of the time at after one week. And it's better for the multiple. That is a good insight, like the the the $20 price point.
Josh PelegYeah, it's a good way of framing it. If you jump two slides forward, but I think the main takeaway for founders, if you do one more slide, the main takeaway is if you're charging under 10 bucks a month, even if you're not sure your app can command a $20-a-month price, just try it. Start pushing up the price, do some AB tests, don't test it on your whole audience, section it, so you test it on 10, 15, 20% of the audience. But just start pushing up that number and see where the numbers start to break. Try and find the ceiling. I think it's really important.
Joseph ChoiWas there something on this slide, too?
Get tactics like this every Monday
New tactics from the week's founder interviews, each linked to where it was said.
More from this episode
- Pitch the app as #1 in women's health instead of competing in all of healthBecame the first women's health unicorn: $200M+ raised at a $1B+ valuation
- Aim the app at first-time runners doing couch to 5K, not all sportsEarned a strong valuation; Strava bought it to reach beginner runners
- Charge $20 a month or $150 a year for a meditation app~25K downloads a month bring in over $1M a month (Sensor Tower estimate)
- Build the app around a trusted podcaster, and put his voice in the first sessionTiny download numbers earn $200K-$1M+ a month; creator-dependence makes the app harder to sell
- Run over 100 experiments a monthGuest cites it as part of what made it a top health app; no direct numbers
- Buy a beginner running app so new runners later move up to your app
- Buy a viral food-scanning app for its knack for pulling in new users
- Sell the app again after its growth has already slowedResold for over $100M less than the $475M paid five years earlier
- Buy apps that already found fans, then add a full team to grow themWorked really well, per the guest; no portfolio numbers given
- Buy apps that get lots of downloads but lose users, then fix the productA couple of such deals brought outsized returns for founder and buyer, per the guest
- Use weekly plans for apps people need for a short time, like datingWorks well in dating and follower-tracking apps; fine for cash flow, weaker for an exit
- Pick a buyer type, study its last 5 deals, and start talking a year earlyGuest's favorite deals came from founders he'd messaged with for ~12 months
- Once a TikTok works, spin up 20 to 100 more videos on the same ideaBuyers value a repeatable viral machine over one-off hits; no numbers given
Tags: price-test, price-increase, premium-pricing