Practitioner pattern · Josh Peleg (Buys apps for BlueThrone; pitches BlueThrone to founders looking to exit)
Cut ad spend from $50K to $10K a month to look profitable before selling
Downloads eventually follow the drop; guest calls it riskier than pushing revenue
Failedexit-mapaid-social
What they did
Founder spending ~$50K/month on marketing cuts to ~$10K ahead of a sale to show profit for a better multiple; the app coasts on previously bought cohorts until downloads fall. Guest instead asks every founder their monthly marketing budget and how high they have pushed it, and prefers seeing spend pushed up.
What happened
Downloads eventually follow the drop; guest says optimizing for profit is more dangerous than optimizing for revenue.
In their words
Sub Club by RevenueCat · Buying vs. Building: Scaling Beyond a Single App — Josh Peleg, BlueThrone“They cut marketing from 50 to 10. And once they cut marketing from 50 to 10, they still kind of run off of the cohorts they previously bought. But at some point, the downloads are going to follow that drop as well.”
Related topics
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More from this episode
- BlueThrone: Buy about 100 small utility apps valued mostly on profitMany had been pumped before sale and died; shallow products didn't last
- BlueThrone: Buy only a few apps with strong organic traffic and invest in their teamsPortfolio cut to 5 apps, each a category leader or on its way; guest says it works
- BlueThrone: After buying a music app, hire a GM from Spotify and triple the teamMAU grew from 200K to almost 6M; still near the top of its category
- BlueThrone: Build an in-house team making cheap UGC TikTok videos for the appsFirst viral video took 6 months and several people; gets faster with practice
- Plarium: Sell mugs, t-shirts and hoodies to a game's biggest spenders
- Soundmap: Sell power-ups on top of the subscription, like 2x more songs nearbyGuest says it captures what each user is willing to spend; no numbers
- Build solo without VC money, then sell the app within 18 monthsSold for over $4M; deal closed in 3 months with no investors involved
- Opal: Charge $120 a year and pitch it as paying for itself in work timeGuest says it unlocked very high LTV; no figures beyond price
- Cal AI: Launch a rough app, prove people pay, then build the real techHost says it's now a genuinely great app; no numbers
- Push the lifetime plan on the paywall right before selling the appKnocks down negotiations; the buyer can't monetize those users again
- Add in-app coins that people earn from ads or buy in packsApps that crack consumables reach deeper LTVs, per talks with hundreds of founders
- BlueThrone: Before buying an app, compare its return per dollar with more ad spend
- BlueThrone: Stack category downloads over time to see if new apps grow the marketScreen time market grew with each new entrant; buying a non-leader looked OK
- Strava: Keep a bought app separate and sell one subscription for both apps