Skylight · B2C · digital family calendars and frames
Make every first purchase cover what you paid to get the customer
Every order in company history paid back on day zero; grew without VC money
Workedfinancingpricing
What they did
Hardware margin means each order recovers its marketing cost immediately, so there is no payback period and no need to raise equity to fund growth. Advice for subscription apps: turn a ~$5/month plan into a $60-$70 upfront annual payment to get the same effect on CPA and payback. Marketing spend is capped where it still pays back (e.g. ~$130 CAC) rather than pushed to contribution zero.
What happened
'every single order in the company's history, has paid back on day zero'; company bootstrapped and profitable.
“Do whatever you humanly can to pay back on day zero, because then you have no marketing payback time.”
“So, we pay back every single order in the company's history, has paid back on day zero.”
“So, if you're doing a new subscription and it's like five bucks a month, just figure out how to make it that 60 to $70 a year upfront payment, and you're golden on your CPA and your payback time.”
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More from this episode
- Skylight: Raise the yearly plan from $39 to $79, not the $99 tests favoredMinimal loss of subscribers or retention; ARR curve 'transformative'; no exact numbers
- Skylight: Keep old customers on the old price, and honor it for anyone who asksGave up an estimated couple million dollars for goodwill; no measured effect
- Skylight: Send the device's QR code to an Apple in-app purchase instead of a web checkoutOver 100% more conversions, on a small slice of users
- Skylight: Knock money off the device when people buy it with the subscriptionMuch higher subscription attach on the own website than on Amazon or in stores; no numbers
- Skylight: Test a free trial, with and without asking for a credit cardNo extra subscribers; trial takers were people who'd have subscribed anyway
- Skylight: Borrow from risk-tolerant lenders at 15-20% to buy holiday inventory, not raise VCStayed bootstrapped and profitable; paid 15-20% a year at times
- Skylight: Keep what people bought the device for free; charge for new add-ons like meal planningPhotos-on-calendar paywall 'just worked' for years; now some customers want it free
- Skylight: Don't mark which features are premium once someone has subscribedRenewal rates high even for light users of paid features; no numbers
- Skylight: Survey customers on whether the product is life-changing, and build to raise that shareAbout 20% say life-changing today; goal is 50%
- Skylight: Push marketing spend on a new calendar product before the product was goodDidn't work; nearly killed the product; took off only after product fixes in fall 2022
- Skylight: Sell the device everywhere: your own site, Amazon, Costco and Best BuyCalled very successful; retail acts as a quality stamp, but lowers subscription attach
- Skylight: Change how you show what's in the subscription bundleRarely moved the share of buyers who subscribe