RevenueCat’s Winning Strategy for Helping Mobile Developers Power Growth

Episode 76 August 30, 2022 00:59:37
RevenueCat’s Winning Strategy for Helping Mobile Developers Power Growth
The Breakout Growth Podcast
RevenueCat’s Winning Strategy for Helping Mobile Developers Power Growth

Aug 30 2022 | 00:59:37

/

Show Notes

In this week’s episode of The Breakout Growth Podcast Sean Ellis and Ethan Garr chat with Jacob Eiting, Co-Founder and CEO of RevenueCat. Building the backend system to support subscriptions in a mobile app can take months. Jacob had done this work himself multiple times as an engineer and realized there had to be a better way. So today, mobile developers rely on RevenueCat’s APIs and SDKs to quickly add, manage, and grow subscription revenue in their businesses.

For startups, time is a precious commodity, so being able to offload work that isn’t directly focused on improving customer experiences can be super-valuable. But it isn’t just time-savings that RevenueCat delivers.  

Working within the confines and ever-changing world of Apple and Android’s walled-gardens can be daunting for developers. RevenueCat deeply understands these ecosystems and uses that knowledge to make it easier for every customer to thrive on these platforms. The company wins by helping its developers grow their businesses, and it is clearly working as RevenueCat itself has grown into a go-to solution for mobile developers around the world.

But, the work isn’t done. Jacob is pushing his team to look for additional ways to ensure RevenueCat is adding value for customer throughout their entire journey.  He wants the company to, “be the Salesforce of what we do”, helping and empowering people who build apps at every step.  From our conversation, it seems like he and his team are well on their way.

Whether you are an app developer or not, this is a great conversation for anyone looking to better understand why directly aligning your company goals with the goals of your customers is a winning formula for sustainable growth. 

Take a listen, we think you will really enjoy this one!



We discussed:



* The RevenueCat backstory: from subscription frustration to accessible solutions (04:52)

 

* “Building on the back of a giant;” adding value within Apple & Android’s walls (15:01)

 

* The importance of being part of the wider developer community (17:59)

 

* Figuring out RevenueCat’s long-term value for customers  (27:52)

 

* OKRs and other efforts to drive alignment (46:20)

 

* Jacob’s most valuable growth learnings (55:18)



And much, much, more . . .

View Full Transcript

Episode Transcript

Podcast Intro 00:00:08 Welcome to the breakout growth podcast where Sean Ellis and Ethan Gar interview leaders from the world's fastest growing companies to get to the heart of what's really driving their growth. And now here are your hosts, Sean Ellis, and Ethan Gar. Sean Ellis 00:00:26 In this week's episode of the Breakout Growth Podcast, Ethan Garr, and I chat with Jacob Eiting the CEO of RevenueCat. So instead of going through what is typically a months long process of building their own subscription backend service, mobile developers can tap into RevenueCat's, APIs, and SDKs to quickly add, manage, and grow subscription revenue in their business. So Ethan and I were recently on RevenueCats, SubClub Podcast, which I highly recommend you check out. Um, and so we were, we were chatting about really the principles of breakout growth success. So it was really fun to have, uh, Jacob jump on with us and hear about he, how he and his team are applying some of those principles. And just generally how they think about, uh, growth in their business. So Ethan, what stood out for you in this conversation? Ethan Garr 00:01:13 So there's this really like just genuine alignment between revenue, cat success and the success of their customers. And it seems to really guide a lot of Jacob's approach and how, how sort of RevenueCat as a company views the world, everything from how they set goals to tracking metrics and just leading people comes down to that alignment with their customers. At one point, Jacob was saying, you know, something to the effect of, we wanna be the Salesforce of what we do, and with this goal of helping developers at every step along the business building journey. And it seems like when you have that tight connection between your success and your customer success, that's the recipe where really good things can happen. Sean Ellis 00:01:50 Yeah. You know, the conversation actually reminded me of, uh, of the one that we had with Joseph Cohen, the CEO of universe, uh, a few months back, um, to reminder there the mobile app where you can build website a website for your business, but he, he had really emphasized that deep connection between the company's own success and his customer success and how that was a key driver for, for their business. And I think we really saw the same thing with RevenueCat in this conversation. And it makes sense because when you look at the backstory of, of RevenueCat, it is, uh, it's, it's really setting that up. So Jacob was an engineer. He was tasked with building these subscription backends for, uh, mobile apps that he was working on. And he really experienced the, the pain points and the inefficiencies and realized that this type of solution that he had in mind could really solve a problem, create real value for people like him. Ethan Garr 00:02:42 Yeah. And I think it was just interesting to talk about where this business sits in this larger ecosystem. You know, RevenueCat provides its services to customers who are living within the wall gardens of apple and Android. So by helping this community of mobile app developers succeed revenue, cat's actually creating more value, not only for those customers, but also for these giant platforms. So I think it's a pretty virtuous cycle that really drives, you know, their drives and, you know, helps their success thrive over time. Sean Ellis 00:03:12 Yeah. But you know, there's always gonna be some fear when you're building aside, those walled gardens that, you know, one day an apple or Google is gonna crush you, but I, I think RevenueCat's probably probably doing it. Right. Um, it'll be interesting to see where they go in the future. The, the product's super helpful for developers when they're building new apps, but Jacob wants to make sure that, uh, RevenueCat is, is an important long term partners, as well as, as these businesses are, are, are the developers are trying to grow their businesses. Ethan Garr 00:03:41 Yeah. It's super easy to be a fan of RevenueCat and what Jacob's doing. He has a ton of really great energy and seems to be having just a ton of fun, creating something, something really great. So having been in the world of subscription mobile apps and, you know, knowing this pain point now having used RevenueCat, I can tell you, it is definitely a game changing solution for startups. So, uh, when do you say Sean, should we jump into it? Sean Ellis 00:04:03 Yeah, let's do it. Hi Jacob. Welcome to breakout growth podcast. Jacob Eiting 00:04:16 Hi, thanks for having me. Sean Ellis 00:04:17 Yeah, I'm joined by my co-host Ethan Gar. Hey Ethan. Ethan Garr 00:04:20 Hey Sean. Hey Jacob. Sean Ellis 00:04:22 We're, we're super excited to have you on Jacob. Uh, we, we spent some time on, on your podcast, not too, not too long ago. So it's kind of, kind of fun old Jacob Eiting 00:04:31 Podcast tables, a bit quick pro quo. Yeah, Sean Ellis 00:04:33 Exactly. Um, but, uh, yeah, so we'll, we'll jump right into it. So, um, I'm, I'm sure some of our listeners, particularly those who are, uh, app developers are gonna be familiar with RevenueCat, but maybe you can give us a, a quick introduction for those who, who may not be, uh, familiar with the company. Jacob Eiting 00:04:52 Sure. Um, so RevenueCat is an SDK and an API and a website that basically helps developers, um, add subscriptions to their mobile apps fast and then build their companies around our tooling. So we provide, we just make the entire problem of dealing with the app store and Google play and other payment providers much, much easier allow developers to get to market faster and allow them to scale their businesses. Um, we just take care for them and allow them to do whatever they do, which is probably a lot more interesting than in-app purchases. <laugh> Sean Ellis 00:05:27 That may, that makes a ton of sense. So, um, I won't go into the total backstory on it, but maybe, maybe we'll, we'll kind of, uh, intersect with the point of like, when, when did you actually know you were, you were onto something with this. Jacob Eiting 00:05:39 Oh, wow. Um, it's kinda interesting. So my, my, in my previous life, my co-founder and I, we worked at the, a company called elevate, um, which was an app my whole life prior to starting revenue CA this is my first B2B SAS play before that I was a mobile developer <laugh>. And so, um, we had built these systems ourselves for another company, um, as engineers. And I guess like kind of knew what we were onto something then, cuz I was like, this is a huge problem, right? Like this is a huge time suck. We all get paid a decent amount. Like this is expensive for companies, right. To work on this stuff and get it right. And it was hard to get it right. And so there was this moment, I don't even say this is probably 2014 or 15. And I was like, there's something here like this shouldn't be so hard. Jacob Eiting 00:06:24 Um, I've now learned as for anybody looking for an idea out there, that's a great source of ideas when you find something that shouldn't be as hard as it is. Right. That's, that's a good source of inspiration. So that's what I knew that there was like something there. Um, and then it wasn't until 2017, we started working on it. Um, and to be honest, it took a year of grinding building the first versions, getting it out there until I was like, oh, okay, this might actually work. <laugh> like, this might actually become a business. And we, I knew it would work from a technical perspective. I, I knew we could build something that would achieve technically what we were trying to achieve is like, like all of this stuff and put it in an SDK in a service and like put it in apps. Like I had built that for one app. Jacob Eiting 00:07:07 I knew how to like make that for many apps. Um, but I did not know if people would, you know, agree to like essentially rev share. I didn't know if people would actually like, you know, asking developers to put an SDK in their app is a big ask. Right. So, um, I didn't know. And this was a new, we were like first in of this thing, like it had never been done before. So like trying to convince developers that this is another SDK you need. I didn't know if that would work. Um, and honestly it didn't for the first like year, it was like begging and, um, uh, yeah, honestly like doing a lot of building, a lot of paywalls myself for people being like, Hey, I'll do 40 hours of dev work for you for free catches. You let me put my little SDK in here. Um, and so yeah, it wasn't until we had done YC and afterwards that we started actually see anything that you could consider like product market fit or like, you know, quote unquote working <laugh> Sean Ellis 00:08:02 Uhhuh. So we'll, we'll go into the details of sort of like what, what you feel like tweaked it to product market fit. But I wanna get Ethan in here. And uh, if, if he's got any pressing questions, Ethan Garr 00:08:12 Well, I was just, I saw an interview. You did probably a while back. And you mentioned that you knew right away that you needed a co-founder and obviously you picked Miguel, uh, you'd worked together, but I'm curious about what gave you the self-awareness to know, like I need a partner in this and what were you looking for in that relationship to make sure that it would be successful? Jacob Eiting 00:08:33 Yeah. I mean, I'm trying to the, the, the interview you're referencing, I had done, you know, a year into the journey. So I'm questioning if I, I really had that Sean Ellis 00:08:42 ForSight <laugh> I did go the co-founder remorse after this Jacob Eiting 00:08:48 And it is something I very agree with. Uh, I very much agree with, well, let's assume that I had the like foresight to know I needed that when I needed it. Um, but uh, I mean, I think this is one of the advantages of starting there's a lot of, you know, great companies started by folks just outta school. Um, and, and, you know, there's plenty of examples out there. Uh, RevenueCat, I started, I was 30 years old, so I had worked for a while. I'd had a few jobs I'd almost been fired. I <laugh>, you know, like I had, I had learned a little bit about what I was and like how I worked and like what my strengths and weaknesses were. Um, and that made it clear to me. Like, I need somebody to like compliment me where I'm weak. Right. Like, or, or to help me F give me some time on some areas so I can go focus on something else. Jacob Eiting 00:09:37 Um, and then just somebody to balance me out, right? Like I'm a little wild, like I I'm a little impulsive. Um, and like Miguel's a little more stable. He is a little more cautious and we make a really good pair because we kind of, and we're really good friends. That's another, another advantage. So we, we regulate really well. So I also had the advantage that I had somebody in mind. Right. <laugh> this advice. I always talk to people deciding if they're gonna go solo or not. Um, it's always easier for people with great co-founders to say, oh, you need a co-founder, but it's hard to find that per like, I don't take somebody that you're not, you know, very, very pretty sure about, um, it's a marriage, right. I mean, it's oh, it's, it's, it's more <laugh>. Speaker 5 00:10:14 I mean, Mary doesn't even like encount Sean Ellis 00:10:16 Escape work when you're married, but Jacob Eiting 00:10:18 Yeah, like there's, there's, there's breaks, uh, you know yeah. You get to go to work every day and stuff like this in a marriage, and there's like some separations, but with, uh, yeah, I don't know with, with a, with a, co-founder like, you're, you're connected financially. You're connected emotionally. You're connected and work every day. Um, so the, it has to work really well. Um, and I think interestingly, it doesn't have to work perfectly right at the beginning either. And I, you know, Miguel's and my relationship has evolved and deepened over time. And there's been ups and downs certainly. Um, five years in it's reached a nice, like steady marathon base. We kind of know each other's bugs. We kind of know what's gonna work and what's not, and we can kind of just rely on each other. Um, but that's so the, the other point I'll make in, in terms of why this was important, I know now, and maybe I knew then was just that you need somebody to pick you up. Like, you need somebody when you're down, you need somebody that you can like complain to and they're gonna be up and they're gonna be able to like normalize the thing cuz otherwise it's so lonely. It's so boring. Sometimes it's just, um, like, and, and you can't like other jobs you can complain to your peers, your, your work buddy is stuff like that. You can't do that bitch Sean Ellis 00:11:29 About your boss. Jacob Eiting 00:11:30 Yeah, no, I, I can't complain, you know, not to, you know, everybody complains about work. Right. I meet myself included and having a co-founder somebody that you could do that with. So anyway, I mean, Sean Ellis 00:11:39 I, that's where people talk about it being a lonely journey and uh, Jacob Eiting 00:11:43 And makes it a lot better Sean Ellis 00:11:44 If you have, yeah. At least you got someone in the trenches who's got as much at stake as you have. Jacob Eiting 00:11:48 Yeah. That's the hard part though, is like finding somebody who's truly deep, as deeply committed as you are and is a good match. It's it's tough. It's tough. Sean Ellis 00:11:56 Yeah. Yeah. No, that makes sense. I, I just wanna touch on one point where, uh, you, you referred to yourself as the, uh, kind of wild and impulsive one. So for anyone who has not tuned into our, our YouTube version of the podcast, it's not a surprise. You describe yourself that way with the, uh, with the big gear. You look, you look a bit, uh, you look a bit, as you describe Jacob Eiting 00:12:18 Yourself, do I not look like I'm about to go IPO or something? No, I don't. Sean Ellis 00:12:22 I don't have the Jacob Eiting 00:12:22 That's a, the banker look, look Sean Ellis 00:12:24 Yet, it'll get there extreme, extreme makeover in a year when you're standing on, man, Jacob Eiting 00:12:30 I'm looking forward to a conversation with the CFO who has to sit me down and like tell me to go buy a suit. Yeah. Ethan Garr 00:12:35 But just for anyone, just like who's, who's tuning in like just a couple things to get you excited about digging in a little bit more about Jacob, one of his profile pictures, he's getting in an airplane that he's about to fly, which is pretty cool. Uh, he has won the 24 hours of Lamont's race, which is just incredible. And I think he built his own car <laugh> um, yeah. Jacob Eiting 00:12:54 So they'll confuse that with the French real race. This is 24 hours of lemons, which is $500 race Sean Ellis 00:12:59 Cars. Jacob Eiting 00:13:00 <laugh>. So am I really pulling that off? People think I won Lamont. That'd be great. Uh, the guy who invented rails won Lamont, I'm not that good. No, no, no. I turned, I turned to 94 tempo into a race car and I raced it for 16 hours. And uh, Sean Ellis 00:13:13 So that's the, that's the lemons conversion. Jacob Eiting 00:13:16 Yeah, exactly. OK. I think it still makes me cool at Ethan, so I, you know, Ethan Garr 00:13:20 No, absolutely. And just the other thing that, um, you took your whole crew on a, uh, on the RevenueCat catamaran. So as you might not know, but Sean and I are sailors. So that was pretty cool when I saw that. So Jacob Eiting 00:13:32 I had to admit, uh, you know, with a remote company, you kind of lose track of how big it gets until you put everybody on a boat. Sean Ellis 00:13:39 <laugh> Jacob Eiting 00:13:40 Focus. You're like, wow, we have a big team. This is a big boat <laugh> Sean Ellis 00:13:44 You don't wanna get too far from land in that situation. Jacob Eiting 00:13:47 Yeah. I thank you for that. And uh, yeah, Miguel doesn't do we both surf and that's, that's all of our, like both, uh, extreme activities, the other stuff, I don't think Miguel's never gotten a plane with me and never will. I don't think Sean Ellis 00:13:58 So. <laugh> so Jacob Eiting 00:13:59 <laugh>, that's, that's what makes our relationship special. Sean Ellis 00:14:02 Yeah. And where are you guys based? Jacob Eiting 00:14:04 So, uh, everywhere. So, um, well we started inf so Miguel and I met there and that's where we had worked previously. Um, and that's where we did YC. And then we kind of were, we wanted to hire a couple people in the post YC era and they were not in San Francisco and I was like, that's fine. I wanna work with you more than I care about where you are. And then the pandemic happened. And we were like, yay, we're four have been the whole time, you know, whatever. And so <laugh> we had, and so we've been, been that way since, since, since, uh, you know, 2020. And, uh, so I'm, I'm in Ohio actually. Okay. Sean Ellis 00:14:34 Yeah. I've heard the surface great there. Jacob Eiting 00:14:36 Yeah. I haven't actually surfed Ohio. I've surf from Michigan. It's not a great OK. Sean Ellis 00:14:41 Can't do it. Yeah. Jacob Eiting 00:14:42 Yeah. Um, uh, and Miguel's in California still and, and the rest of the team. We have a lot of folks in Europe, a lot of folks in the us, south America kind of all over. Sean Ellis 00:14:50 Cool, cool. Yeah. I surf too. That's part of the reason why I was at, oh, great. Initially asked where Jacob Eiting 00:14:54 We need to talk about growth in companies. Can we just like, Sean Ellis 00:14:57 There's a, there's a really good swell in Southern California this week. Jacob Eiting 00:15:00 So I know I saw Sean Ellis 00:15:01 It's been fun. Um, but anyway, getting back to the topic at hand here, um, uh, maybe you can give us, um, a bit of insight on, uh, into what it's like to build insight and ecosystem like the, like the apple or the Google ecosystem and sort of the dependency, uh, yeah. Around, around your business, in, in building inside there, advantages and disadvantages. Jacob Eiting 00:15:25 Yeah. I mean, you know, we're building on the back of a giant, right. Uh, right. Like it doesn't, they don't, that doesn't really know we're here. Sean Ellis 00:15:31 <laugh> yeah. And, and the giant can SWAT you pretty easy if they Jacob Eiting 00:15:35 Wanted to. Yeah, exactly. But that, that, that, that ascribes a lot of intention to it. Like these big companies, there's so many people and so many initiatives and things like this it's, it's, it's unusual that they would even notice you. Right. Like it's, it's, there's not a single consciousness. So, so yeah, in the early days, this was a huge risk to me. I, I knew it, like I knew, like we were, we're not breaking any rules, but we're building on their system kind of in, you know, we, we, we make API calls on behalf of developers and like, it's, it's all, it's all up and up, but it is different. Um, there were other comparables that people had done, like messaging services, like, um, like bras and, and, and one signal, um, had done something similar where they had like, essentially helped developers with Apple's APIs. So I was like, okay, there's some, there's some prior work here. Um, but definitely in the earlys days, everybody was like, are, are these, are they just gonna like shut you down all stuff? I was like, no, I hope not. Uh <laugh>. At some point you get to like a critical mass where like, there's enough developers using you that like, they kind of can't, it Sean Ellis 00:16:39 It'd be a little messier for them Jacob Eiting 00:16:40 To it be messier now. So we have a little bit of like a standoff that gets all good. Um, and we have a good, like, I I've, we've tried to cultivate as good a relationship as we could with anybody we could at both platforms, we've actually done some, we were on featured at, uh, Google IO this year and stuff. So it's important for us to have that relationship. But as a company, a small company, there's definitely like an asymmetry to it. And it's kind of always, you know, if push comes to shove, they could really, they could do stuff that would at a minimum we'd have to react to. And we do that every year. Like, we're always, they're launching new stuff. They're not asking us first. So they're launching new stuff. We have to react to it to make sure it's ready for developers, um, and stuff like that. And, you know, it has, its, it has its advantages because like they've attracted a community of developers right. And like of which I was a member. Um, and so that gives us an immediately like a lot of places where customers have congregated and understand the problem, um, and, and have some context for what we do. Um, but similarly, yeah, you have all these like platform risks, um, that, that probably never fully go away. Um, but I do think like diminish over time. Sean Ellis 00:17:44 Yeah. And then, so with that aggregation of, of, uh, of potential customers on the platform, how does that change your, your, your go to market when, when it's, uh, it's. It is, it is more aggregated. Does that make it easier? Does it, Jacob Eiting 00:17:59 Yeah. Um, I mean, on the developer side yes. Because apple would brings them together in community and, and Google as well. So like, you know, we would go hang out outside WWDC. I would like hit all of like my developer community friends in the early days to like, you know, tell them about revenue, cat. Um, just being part of that developer community gives us credibility as well. Like watching, being, being apple and Google Watchers is kind of something we do is like making sure we're interpreting what they're doing, um, for everybody, um, helps. Um, but, but also like, you know, it we're playing their game. Right. So Sean Ellis 00:18:34 <laugh> right. And then, and I think, um, just being B2B SAS is, is such an interesting, an interesting transition that's happened in, in kind of the last, you know, five, 10 years that, uh, it was very much kind of a, a sales driven approach for most B2B SAS companies. Yeah. 10 years ago. And over time you've seen more move into kind of a product led motion. What, where are you guys in, in that journey? Jacob Eiting 00:19:02 Well, it's a journey. Um, so, you know, I was a consumer person found or, uh, you know, all the app, I worked on apps right. Which are by definition almost all consumer. And so that's how I learned product. That's how I learned analytics. That's how I learned sales. That's how I learned acquisition. So my whole background was always in consumer. So when we went to set up revenue, cat, I brought a lot of that. A lot of that experience along, you can sign up yourself. I wanted the funnels to be really smooth. I didn't want to talk to people. I'm a, you know, I'm a developer, like, why do we need, I never want like, as a, as a consumer buyer, like, or sorry, as a B2B buyer on the, on the mobile side, I never wanna talk to anybody. Like, I'm, I'm liable to go to your competitor before I did on the phone, Sean Ellis 00:19:42 Make self service possible if they want that. Jacob Eiting 00:19:45 Yeah. And so like, that was very much important to me when we started, uh, when we, when we built the initial versions, um, and that's kind of carried forward to today. Um, we've of course, like at some point I realized, like I'm not, I'm, uh, not the, uh, my way of buying. Isn't the only way of buying. Let me put it that way. Right, right. Exactly. There are people that want to get on the phone and need to get on the phone. And, you know, it kind of forced me to experience that and understand the value that they get out of it and kind of learn what, um, what a sales process can look like for a product that is PLG. Um, and so, yeah, it wasn't, I mean, basically, you know, those initial calls I was doing, where I was helping people put our SDK in their app, there's kind of an unbroken line between those kind of turned into what became, I just was doing less and less, right. Jacob Eiting 00:20:33 Like I wasn't getting their code base anymore. I was just telling them about the value and giving them documentation. Um, and then eventually, you know, the stakeholders, as the companies got bigger, the stakeholders got a little more complex and we started to have to like, you know, have different little talk tracks, depending on who's in the room. Um, but, but largely folks are finding us because their developers have a problem or they have a organizational problem around, they don't have visibility in a revenue, or they don't have, uh, the, the technical support on, on revenue tracking. And then usually a developers like, Hey, I've heard of this service. So there's usually a developer in the process. Um, and they'll come to us in most cases, Sean Ellis 00:21:11 Uhhuh <affirmative> and then what, what if, what are they giving up if they, if they don't end up working with you usually, what kind of, how do, how do they think about that value proposition? Jacob Eiting 00:21:19 Yeah. Yeah. It's, it's an evolving, <laugh> like, how do we pitch this? Um, I would say typically our, you know, our, our biggest competitor is in house. Like that's still the most, um, the most common reason somebody doesn't choose to go with us. And so it's a difficult, it's a difficult sale to make often. And this is, I think, across B, D D, um, because you'll sometimes have developers that are really confident, cuz they're really good. And you have to convince them that, like, it's a good thing for you to give this up. Right? Like I'm taking, I'm not doing this because you can't do your job. I'm doing this because you don't want to do this job. Right. Like I'm doing this because we'll make it easier. You can do other more fun projects. Right. But sometimes there's like some ego involved. Um, some, a lot of times also with replacing legacy systems, that's a really challenging sale for us. Jacob Eiting 00:22:09 And like, we're still trying to figure out how we make that better in terms of like that PL like this was a problem. I we've kind of kicked down the, the kick, the can down the road because we've had, there's so many new apps every month that like, we get a lot of customers that way. So we've kind of like having, I don't think it invested as well in like making sure a, a customer that has a legacy implementation can really move over easily. It's things you start to work on as you like your customer segment shift and stuff like this. Sean Ellis 00:22:35 Yeah. And obviously like the, the bigger ones that have like a, a real established business could be probably higher revenue customers for you faster. Jacob Eiting 00:22:41 Yeah. That's the thing, there's a pull for us, certainly to do that, if we wanna accelerate revenue growth, but like also I think it's, it's a learning process and it seems like a lot of us in B2 D and just B2B that come up PLG, there's always this messy middle of learning enterprise, whatever your definition of, you know, whatever your biggest realistic customer segment is. It's always a challenge because it's not who you started with. Often like myself, like the product leaders you have initially don't really get it as well. Um, and stuff. And now I would say, certainly we're in this stage right now where we're trying to better understand, like, how do we actually sell into these organizations? How do we get their, how do we get their attention? How do we get their calls? How do we drive urgency? Um, and, and it's, multi-pronged just product that's I think what, what's the hard that's I think often what people miss is that you go, well, I'll just sell my PLG product, uh, with, you know, we'll do some calls and add an MSA. And like, now we've now we have sales. And it's like, it's not that simple, like the product needs changes. The onboarding needs changes. The company needs changes in order to support that. And we've definitely learned that in the last like year or so, um, as we've had some like real deals, like, Sean Ellis 00:23:49 And that tends to like affect the overall culture of the business too, as you, as you. Jacob Eiting 00:23:53 Yeah. I mean, we're a bunch of, we're much Indian developers. What do we know about like big, long protracted sales process? Right. So like, Ethan Garr 00:24:00 Yeah. But, and, and companies typically, you know, that are really PLG focus, you know, that ha revolve around the self-service motion. It's like, okay, we'll hire a, a salesperson. What they don't understand is the rest of the organization has to support the sales organization. Otherwise it's not gonna be successful. So you're, you're disrupting not just, you know, a small piece of the, you know, sales has to interact with product. They have to interact with marketing. If those things are really baked in already, you're, you're changing the whole dynamics of the business. And I think that is definitely underappreciated. Um, cause we, yeah, yeah, sorry, go. Jacob Eiting 00:24:34 Uh, I was just gonna say like, I think, and that's often can lead to a false start and I think we were maybe guilty of this as well is like, not recognizing that, like, you know, there's all these always in this whole journey, there's always like points where you feel like you should be doing a and B, right. There's like an a that you're working on. And there's a B that looks really juicy. And I think almost every time trying to do both fails. Um, and so I think this is the case also for, for when a cus when a company transitions from PLG into some sort of sales motion, cuz you think like, oh a is what I really care about. Like let's just tack on B, but what you're absolutely right. Like it, it requires organizational transformation. It requires product trans. It requires like me, you know, the leadership to really like get everybody online that like, and get excited about running a sales led motion and, and it's hard I'll Sean Ellis 00:25:22 And then sales people tend to have pretty big personalities too. And so Jacob Eiting 00:25:25 It's a very different culture for Sean Ellis 00:25:27 Me to kinda take over the culture of a, of a company, if, if, uh, if it's not really managed well, which, which can be great, like having a very sales driven culture, like a, you know, there's, there's a lot of companies that I think have done really well with that, like an Oracle or something, but, um, but at the same time, like certain founders might not want that. And, and they, they need to go into that with eyes wide open. Jacob Eiting 00:25:49 Yeah. Like I, I, I definitely, um, I definitely had the chip on my shoulder about it for the first few years. Uh, and I was like, sales is silly. We don't need this. Like, what is this for? Like whatever. Yeah. Now I'm just like, we need it. And I don't understand. Yeah, we got some, Sean Ellis 00:26:03 We got some numbers to hit and you know, like you gotta gotta kinda look at all the angles, Ethan Garr 00:26:08 Working with a company, a couple of companies that have transitioned to sales. I think the biggest maybe the, the earliest mistake that they make is the leader comes in and says, we need a sales team, but they don't have a vision for what they think that sales team should look like. Cuz it's a different motion for PLG to sales than it is traditional sales. You're not you're the customers are coming with a lot of information about your product already. They know your product in many cases. So it's a different, it's a, you know, um, and Shawn and I have talked about this at length. It's, it's really in a way it's much more about customer success, uh, at that point as, Jacob Eiting 00:26:38 Because often they already are in customer sometimes too. Right. They've already signed up. They already have an account like, um, uh, and I think the, what makes it challenging also is the spectrum of those customers. You have everybody in between, you have the, like you have the like very disconnected stakeholder coming in for a very high level conversation. That person needs a very different experience than like the developer who integrated it six months ago and is just trying to get a discount or just trying to get an upgrade or whatever, like, and, and building a sales team to like serve all of that is super, super hard. I think you, you, you made another point about hiring the sales leader. I think this is something too where I've seen. I mean, I, I, I I'll confess, we haven't figured it out, but making sure the folks like building, understanding those sales processes, don't outsource that to an exec hire like super early, just because like, especially in PLG, because you, you have to really know cold the like intense and the user profiles and like their experience. And then you have to get that humming. I think your, I think founders really need to do it themselves. Uh, and before they can successfully handed off to somebody who, you know, and then, and then it informs who you hire, like what, what VP of sales, or whoever's gonna run your, your, your go to mark on this old side. Ethan Garr 00:27:52 So just so we don't go too far down that rabbit hole, I'll change the subject a little bit, but, um, <laugh> so previously I run product marketing at tell tech and we were portfolio company. We had portfolio mobile apps and, uh, this is before RevenueCat. And, uh, we struggled building the subscription backends every time for each new product that we created, which, and it was funny because every time you think like, oh, you just copy and paste. Right. But it seemed like there was so much learning from each iteration that it was, you know, so RevenueCat made so much sense to me when I, when we saw, when I saw that you, what you guys were doing, I was like, oh, that's so exciting. But, um, it makes, you know, it makes a lot of sense for me from in that early motion when you're building an app, but you mentioned, you know, converting existing apps to use your subscription backend, what is the long term value of, of RevenueCat? Like, can you tell us a little bit more about that? Jacob Eiting 00:28:41 Yeah. I mean, I would say today it's peace of mind. <laugh> like, we've got it covered. Right. And we'll keep you updated and we're gonna like skate ahead and like, make sure, make sure you never have a misreported revenue month because you know, some bug and some receipt thing from Tony, you know, from five years ago that the person that built no longer here, <laugh>, we that's, that's the value now, but like that's pro that's not enough for the long term. And I guess this is the game we're playing now is like, we've, we we've solved really well. The upstart problem, the, Hey, we're doing our N plus one app. We don't have anything. Let's get, let's get revenue. Can they save us a ton of time? And they give us like the basics out of the box. Um, I think long term, we're going to have to continue to build value down. Jacob Eiting 00:29:27 Like, what does, what does the company in their fourth, fifth, sixth year of using us? Like what, what new value? I mean, they're gonna be coming back to look at charts. They're gonna be coming back to like, look at their revenue. That's kind of an evergreen loop. Um, but what are their challenges that are new at that stage where we're kind of reaching a second, you know, the second prime market fit or whatever we're reaching, we're, we're there already with the tool they need in year three or four. So that they're renewing their, like their perception of value as well. Cause like the way we, the way we bill is like, we're, we're coming along for the ride. Um, and I've always liked that it's got its advantages in one, we've become a line item. That's always at risk. Um, but the, the upside is that we're very aligned with your success and it forces us to like keep earning it year over year. Right. Um, and I, I I'm, we we're just now getting customers that are matured to that stage and start asking this questions. And it's good for us as an organization, frankly. Ethan Garr 00:30:23 So do you worry right now, like in, with the today's iteration, are you worried about customers outgrowing you and that's why you need to get ahead or are, you know, or is that you, is, is it more a concern today or is it more of a concern the future, I guess? Jacob Eiting 00:30:36 Um, I would say it's, it's certainly more, we've certainly heard it more in year five than we did in year two. <laugh>, you know, um, we just have a lot more mature cohorts, um, but I'm not surprised. Um, and, and like I said, I'm, I'm kind of, it's, it's good it's market information, right. Um, in terms of like what those, what those customers need again, it's like, I think this is why we have to even accelerate more on what we're doing on product development and new features and our customer success work to make sure that, that we don't, that we, that never creeps into somebody's mind <laugh>, you know, like there's certain tools that you're like, good God, no, I would never churn. Right. Like they could like slack maybe is a good example or something. There's like certain tools that you're like, I'm locked in. There's like zero appetite for changing. And like, I'm glad that they have my money. Right. Like that's, that's, that's what I wanna achieve. It's a high, it's a high goal. Um, but that's part of the reason I, I, I like the way it's set up because it forces us to keep working and keep pushing. Sean Ellis 00:31:43 So I, I wanna come back to the, the ecosystem, uh, kind of area. We, we, we talked a bit about that. Um, uh, just like building in a closed ecosystem. I'm, I'm curious as, as the business has, has evolved, I dunno what the, what the relationship with, with Google and apple looks like, do you have, do you have to spend a lot of time nurturing that relationship or is it really you just, you know, the rules you build, you build to the rules and yeah, Jacob Eiting 00:32:09 That's it, I would say pretty much that we build to the rules and, and we stick to it. Like apple has apple I'm, I'm, I'm more experienced in the apple ecosystem than Android. I've done both of course, but, um, but they, they they're very parallel in a lot of ways. Like they have their technical stuff, like how their API's work and what they actually do. And then they have their, like rules of the road for the ecosystem to be in the app stores, essentially. Like what, what, what are you allowed to do not allowed to do? And as a company, we play 100% in those rules, because one, I don't wanna lead. It's not my goal to lead developers. Last thing a developer needs is to like, make apple mad at them. Like if we're at risk and apple being mad at you, apple will. Jacob Eiting 00:32:48 I mean, this is, I, I feel bad as like a partner, but they will destroy your business. <laugh> like, and not even think about it sometimes. Right? Like, or at least like put you through a very panicked period. Right. And this one of my complaints to apple and Google is like, they do this to developers. They, they have a lot of power in this huge system. And like folks, like well-intentioned folks get caught up into like bad situations all the time. So anyway, we don't, we wanna be of anything helping people avoid that. So, yeah, we, our first, our first line of defense is making sure that we're on apple side in terms of what their rules are, understanding them. Cuz it's getting more complex as well. Like there's the digital market that markets app and act in Europe that's um, going to potentially change the way that app stores are allowed to force an app purchases. Jacob Eiting 00:33:33 There's also legislation proposed in the us. Um, and so apples like apple and Google are reacting very quickly and changing the rules and developers wanna know like what can I get and what, how do we take advantage of this? Um, and that's kind of our job is to make sure that Apple's got and Google have their line and like how they want you to take advantage of it cuz it's, which is keep using I P for us, like we're fully aligned with the developer, right? So we're gonna tell them and, and help them get the most benefit that they can without staying within Apple's Apple's rules. And then it's, you know, relationship building, making sure we have good relationships with anybody on their, their technical evangelism team trying to build technical. Those are the, the biggest, most important relationships for us is because we're working on their stuff, we're catching bugs for them. We're sending it back and forth. Um, that's where we've done the most development in terms of a company that big, it's really hard for a company, our size to have any sort of real relationship with a company. Sean Ellis 00:34:27 Yeah. But it seems like you, you fill an important void for them. I mean, it's such a, the, the revenue that they generate from, from their app stores is, is super meaningful now in, in both businesses. And if it's, if it's easier for people to, uh, you know, to plug in and then Apple's gonna be taking their, taking their cut of every single transaction, like yeah. It seems like there's a lot of alignment there Jacob Eiting 00:34:53 <laugh> yeah. I mean, I mean, we're here today, so they must not be that mad about it. So like, uh, uh, and that's, that's been my understanding and back, you know, back channel conversations and things like there's no official line that like RevenueCat is the endorsed, you know, whatever, but like, um, they, they understand the, they have to remain very, very both platforms. I think this is like the case for abstraction and, and in, in technology in general is that, you know, the underlying platforms have to remain very, very agnostic and very, very feature light. Um, and it creates opportunities for software like ours to like narrow that vertical down, focus on a use case, which in, in our case is generally non-game subscription apps. Um, and really build, really build for what also, what we know from being in the industry is like what those CU companies need, um, that apples that wouldn't make sense for them to do that necessarily. Right. That would be such a niche down for them. And frankly they don't need to. Ethan Garr 00:35:44 Yeah. I mean, I, I think if you're like, you know, even if it comes to like, uh, SEO or advertising or any of these things, if you start thinking about the platform and how does the platform make money and how, how do you, how can you make their world better? They usually are on your side. Right. I mean, if you're, so I, you know, if you just think reasonably, if, if RevenueCat is shaving three months off of the average time for a developer to get an app in the app store, that's a lot more apps getting in the app store every year for apple. I mean, it just seems like they would, you know, while they might not endorse you specifically, they would be excited about, about that prospect. But of course we used to call it getting flashlight, you know, by apple, like, because apple created the flashlight, you know, app and killed, um, you always have that specter, but I used, we developers always think about that. Ethan Garr 00:36:34 Well, what if apple just builds that? And the reality is if you think that way you'll never build anything, cuz apple could build anything. But that doesn't mean they, they want to that's, you know, so I, I think it's, um, I think you're feeling a great, you know, a really interesting hole for, for, for developers and for apple that I think is, is necessary. So with that, you know, one thing that dawned on me is, you know, I used to live in, you know, sensor tower and app any, uh, data all the time. And I was thinking RevenueCat have the best seat in the house when it comes to understanding subscription data across the entire ecosystem. When you think about like the long term value you can to, for your customers, is that part of it like using the data that you learn across your base to help leverage that on behalf of your users? Jacob Eiting 00:37:18 Yeah, absolutely. Um, so it's, it's something I've approached, I think with, uh, an appropriate amount of caution, because one, I don't want to, well, two things like one, I don't wanna tell people facts that aren't true. Like, I don't wanna say like, this is what the average conversion rate is. And it's like, well, we did poor analysis of the data or like we're over biased because of whatever and up until the last year or so, we've had a big data set, but it hasn't been that big. And now we've got a sufficient number of apps at scale that we can anonymize the data and mix it together. And there's no chance of any leakage and whatnot and yeah, we're sitting on a lot. Um, we're, we're just now starting, uh, to do that. We actually, I was like reviewing a post today where we're gonna kind of our first like, but, but it's a it's it's in our, in our marketing strategy, at least on the, to like, um, sensor tower does a great job with demand gen using their, using their data insights. Jacob Eiting 00:38:10 Um, but uh, that's kind of just the beginning. Um, I wanna make sure we're using it in the product. Like we should be guiding developers in terms of like what you should expect from these different, um, skew placements or like packaging and like what, what, what, um, predictive LTV can we tell you? Like, you know, if you have a certain set of monthly subscribers and we know some basic things about your app, we can probably give you a pretty decent idea of what your renewal rates are gonna be in, in the next month or two. Um, just based on just based on some basic, you know, some basic information we have cuz the apps are the, I guess this has been one actually surprise learning is how there is quite a spread like the, the, the, the, the, like, if you say the average trial conversion rate or the average renewal rate for an app, you think that is a very useless number <laugh> because the apps very wild wildly, which kind of surprised me. Jacob Eiting 00:39:09 Um, but it gives me a lot of faith because it means that consumers are very rational. Like they will unsubscribe from apps that are not bringing value. They will not, they will not convert on trials, on apps that are not bringing value and the ones that are, you can really see if you go to like the high end of those numbers and look at what apps are in there, you see some really amazing software, which gives me a lot of, uh, faith that what we're building, isn't just like a, a, a recurring scam mechanism as a weapon, right? Like that we're actually building something that, that aligns value, um, with, with developers. But yeah, absolutely. Like this has been a, this is of these, you know, these things I was talking about a and B like, there's always like a thing you wanna do really bad cuz the value is so there. And so obvious this has been one of those things that we've had to be like, ah, we can't yet. Oh we can't yet. Oh we can't yet, but we're finally getting there. We finally have the support in the systems and we're gonna get there. And I think in the next year we're gonna put out some really cool stuff. Sean Ellis 00:40:00 So yeah, I think to the point you were just saying, uh, like that, that it varies so wide, wide wildly, um, or, or widely too. Um, the, uh, I, I was looking at some data app anti data pretty recently on calm, uh, the meditation app and, and, uh, it was, it was shocking how like their, their long term retention is, is really low. And I don't think, I mean, I've, I've used, I've used com for for many years. And so I know, I know that the values there for, for people, but the, um, I think particularly like with, with that category, when you think about building a habit around meditation is half the challenge and then having the app actually be good for what you're trying to do with it is, is the other half of the challenge. And when you take kind of both those together, you're gonna have a, a really low retention rate. So comparing that to a, to an Instagram long term retention where you don't even have pricing with it and they, you know, they're gonna be 50% plus where, where like, yeah, Common's gonna be significantly lower. Jacob Eiting 00:41:04 So that, or, or something that's like very core, like, um, for flight is this app. We were talking about airplanes before, is it basically data subscription service? And I will subscribe to it as long as I am flying and I will never churn. And I think that's probably true for most of you, they tracks the natural rate of pilot churn. Right. Then it does anything about their product. Also they're the dominant. The other, the other thing with calm is like when, when calm started, they were the only game in town. They kind of defined the, now there's like a me and I think that's one of the challenges with like a content based app, like calm is like eventually customer or you're gonna wanna shop around and try other flavors and things like that. Um, but I mean, that's, that's the case for consumer in general, right? Jacob Eiting 00:41:42 Like attention is fleeting. What I've seen really interesting is apps that serve like prosumer use cases. So like, um, one I like talk about like photo room is that photo room. They, they remove backgrounds from photos. They have this really amazing niche within, um, like Shopify sellers, like people trying to get stuff on their site and they have, I mean, I don't know what I'm wanna talk about, but it's a good business. And so like, <laugh>, uh, that's something in mobile that we're seeing more and more of. And actually I feel like is something I'm that makes me really excited to stay in this ecosystem and invest more because like, I don't know. I, I still think like mobile is the best platform. I don't know the best platform for software creation that's ever been created. It's it's, we're only 10 years in. And like, I think software's just getting better and more diverse. Um, Sean Ellis 00:42:32 And just the fact that it's with you all the time. Yeah. Uh, and has there's a lot of yeah. Jacob Eiting 00:42:38 Dynamism as well. So like apps are gonna rise and fall and that's good if for consumers like software needs to be changing and evolving. I think it's more so it's slower in B2B. Like, like Salesforce, I don't know if I'm going to, I imagine on my deathbed, Salesforce will still be the world's biggest CR <laugh>. Like, I'm not sure, like it changes on, on, on Sean Ellis 00:42:56 Harvest. Maybe wants to beg to differ on that. <laugh> Jacob Eiting 00:43:01 But, uh, but, but for mobile things move much, much faster and I think that's good for that's good for consumers. Right. That's good for software, um, for things to be moving faster and for there to be like high dynamism. Sean Ellis 00:43:11 So I, I think I say a good transition to the idea of like, what, what does, what does RevenueCat look like going forward sort of, uh, you know, with, with all of these changes with all these opportunities emerging, you know, five years from now, what, what would you like to see RevenueCat looking like, sure. Jacob Eiting 00:43:28 I wanna be the sales force of what we do. <laugh> right. Perfect. Sean Ellis 00:43:31 I wanna be the, Jacob Eiting 00:43:33 Um, uh, yeah, so our, our vision, our mission is helping developers make money. We, we, we have this alignment be because of the downstream effect that I think that's gonna create the most consumer value and the most consumer yeah. Happiness is helping empower people who make apps, right. Sean Ellis 00:43:50 It's sustainability for the good stuff. If they can't make money doing it, they have to go out and exactly do something else. Jacob Eiting 00:43:55 Yeah. It's much harder to, uh, sustain an app without externalities or with externalities in subscriptions. Like either people are gonna pay for it or not. Consumers are basically rational and apple and Google have done a pretty good job of, of making the system where people are comfortable paying developers for little pieces of software. Um, and so our mission is to just keep maximizing that. And, and along the way, like we wanna be the tool set the platform. I don't know every word is cliched, but, uh, we, we basically wanna make sure that every step along the business building journey, you know, for, for apps, for people making apps for consumers, revenue, cat is helping them. So whatever we can do, the, the, the revenue relationship is so important to these businesses. Everybody's talking about LTV, everybody's talking about their subscriber base, right? That's, that's the heartbeat of these businesses. Jacob Eiting 00:44:45 And so we've entered in a really boring spot in the most high pain, boring place we could <laugh> right. Because that was where the most uptake was. And frankly, that was the problem. I knew how to solve, um, Miguel and I knew how to solve. And, and now the game is like, okay, so then how do we, everything that, and this is where our customers and customer success is really helpful. Cause you talk to them and they're like, wait, what are you doing with our data? Oh, that's really interesting. Right? Like we should bring that in and, and, and, and, and make that part of our product or better yet, we should create a platform where other other companies can use the RevenueCat core infrastructure build on top of us. Um, so they don't have, they can provide during this company super wall, we just partner with, they do paywalls testing as a service. Jacob Eiting 00:45:29 Um, and another one of these things that's been sitting on my table for years being like, oh, we could really tackle that with our tech turns out, like people can do it much faster, you know, if they're fully focused on it. And so that's where I see us evolving. We're gonna be this like ecosystem where you set up in revenue, cat, and you get access to basically any tool you could possibly want. Um, that's, that's especially oriented around your revenue, which is something special, I think in CRMs and, and data platforms, um, to this day. Ethan Garr 00:46:00 So you've grown, I think, to around 60 employees. Now, I think you said, and, um, obviously as you grow, things get more challenging, but you're five years into this. And I assume with that comes a lot of knowledge and, and, uh, sort of clarity on, on where you're going. Do you feel like things are becoming more predictable in the, in the business at this point? Jacob Eiting 00:46:20 Wow. That's a really good question. It's, there's, there's always so many dimensions, so things get easier in one dimension. And then just when that's happening, a new dimensions opens up that you didn't know was there and now you have a new, or, or you can look at it linearly and just think like, there's the next, the next scaling problem. The next scaling challenge, I think there is in terms of scaling. I think there is this really painful, I'd say 20 to 50 period where I think we're coming out of, we're not fully out of, but we're coming out of now where it's like, you need managers and you need systems and you need people teams and you need, uh, OKRs. And you need like all of this stuff, which as a, like startup, like a S two guys working out of their living room seems very foreign <laugh> and like takes a lot of like self. I don't know, you, it takes, it takes a little bit to get excited about it and to see the value and to understand, especially I hadn't done it before. So like really understanding why that was important. And it's like, we're just doing computers, right? Like, that is true, but like you need these systems. Um, and so I think that that's been a really, really painful period of growth for us and, uh, company building and Miguel and I as well, like personal growth. But I Sean Ellis 00:47:25 Always find for what it's worth, I always find around 30 employees is where, where it gets really hard for me is like that transition point. So it's right in that range as well. Jacob Eiting 00:47:34 I think we experienced it earlier being remote. I think remote companies mature a little bit faster. Cause you don't have that like cheating with everybody in the same room to like yeah. Improve, Sean Ellis 00:47:43 Overcome some of the challenges. Yeah. Jacob Eiting 00:47:44 Yeah. So you have to invest in this earlier typically. Um, but anyway, yeah, we're getting on, I think we're coming out on the other side of it. And so I'm actually excited because now I have, we have all the like, functions of a company. So when it's like, we see an opportunity here it's it's now like, okay, like how do we set up the company? Yeah. I guess there is some more predictability. Okay. Like we can do this in Q whatever. Do we have the resources? Can we put a team on it? Who's gonna work on it. We have a bit of a predictable hiring pipeline. We have a bit of a predictable, um, product pipeline. And like, we can start to, I can, I can <laugh> there's this really nice translation layer where I have it's like Miguel, I've, there's a lot, moreish people on my staff. <laugh> I can hear me go like this and go like, all right. Let's translate that into some things we can execute on. Mm-hmm <affirmative> um, and I'm very grateful for it cuz I'm not sure. I, I always joke. Like there's no way I would like get hired onto my own team. <laugh> yeah. Like I just don't have it's Sean Ellis 00:48:38 Too much next shiny object Jacob Eiting 00:48:40 <laugh> yeah. Like, uh, I, I hope it works and I hope my team can, can manage it, but yeah, it it's it's, I, I it'll be an interesting question to see a year from now or two years from now. Cuz I, my, my theory is is that operationally, the company will feel more the same from here to IPO than it did from zero to here. That's my theory. I don't have a whole lot to back that up besides intuition <laugh> and maybe some hope <laugh>. Uh, but, but I, but I think we're coming out the other side. Sean Ellis 00:49:05 So do, do you have, um, anything that kind of keeps people sort of aligned, uh, pulling in the same direction? Like, like, uh, you know, reinforcing the mission all the time. Yeah. Or north star metric or, or OKRs? Any, anything like that? Jacob Eiting 00:49:19 Yeah. So we, we just started trying with OKRs and I I'm, this is one of these like learnings, I, this year that I've learned the hardware, like just about every lesson you learn in this game, which is like, I was like, people don't, people are like, they wanna, they wanna vision. They wanna know what we're doing all the time. I'm like, I don't know, help developers make more money. What's what's so hard about that. Like <laugh> Jacob Eiting 00:49:38 But, and, and, and you learn eventually, like if more than one person says the same thing, you're like, okay, something's here. Like, let me, let me stop and take. And I did the reading and, and like, I, I listen for once and like start realize like, yeah, that is true, Jacob. But like not everybody has it in their head, like you do, and you need to have a system for articulating that. And so I've gotten on board with the mission to metrics story, like, Hey, here's our mission. Here's the vision. Here's like the metrics that matter. And like what we're gonna be doing in this quarter. Right. Because just so many people, all, you know, doing all kinds of different, like technical skills and, and everything. It's so much easier if they all kind of have a similar, we have a shared narrative in terms of what we're doing again, first year doing it. Jacob Eiting 00:50:20 So I'm sure we'll like iterate and learn. Um, but, but that's been helpful just like, in terms of storytelling for me, cuz I don't meet with everybody anymore. Like I used to have one-on-ones with everybody. I could kind of set the story straight and tell them what I'm thinking. And now that just can't happen. Um, and then on metrics, interestingly, I've been doing investor updates since, since I was in my kitchen and in, in we didn't have investors, I just picked friends who were investors in hopes. They would become investors, uh, at some point, uh, and started sending them updates. And uh, I've used the same, pretty much the same three metrics since then it's been our total volume, like how much is flow through the system? Like in terms of like customer volume, um, uh, the number of apps we're shipping every month. So how many new apps went live in the month and then, and then our revenue, which is downstream of, of the other two. Um, and I've struggled to find better metrics than that. It's like, how, how fast are we growing? How big are our customer? How fast are our customers growing? And then like, what's our take. Those are essentially like the three things, but it feels Sean Ellis 00:51:20 Like, like kind of tying back to the mission piece that, that you talked about, it feels like just, just being shining a spotlight on money, generated by our customers. We've helped our customers generate this much money this month. Yeah. And compared to this much, you know, maybe their seasonality or something else. Yeah. And just something that Jacob Eiting 00:51:40 I think there's, I think there's evolution here that we, we, we, and this is, this is where the OKR system, as we learn it and get better at it, because there's also like trying to look into our cus cuz like our total volume is related to how many people we've onboarded size of customers, things like that. Doesn't give me all that much indication of the health of our customer base. Right? Like how are are they growing? We do look at like annual NRR to see like a year goes cohort. Like how are they doing now? And that's a really important number in terms also revenue growth for us. Like that's our compounding factor. Makes sense. Yeah. Um, now I, where we, what we haven't developed yet and I think is gonna come in the next, like couple quarters as we get better at this system is like, okay, our NR, we want it to be higher go. Right. Like talk to the smart people we hire Sean Ellis 00:52:24 For anyone listening who doesn't know NR, can you yeah, Jacob Eiting 00:52:27 Sorry. It's net revenue retention. So basically how much a customer grows in 12 months, you know, they started a hundred percent, where are they at? And then it can go down a lot of times a consumer you the same cohort later patient bus money, typically in, in SAS and with expansion mechanics like that, that, that ideally goes up over time. Um, so that they're bigger a year later. Um, I think that's, that's, you know, and going back to Ethan, your question about like long term value, I think that's how we track making sure people are never gonna pull us out because Hey, like every year we're gonna help you bring a couple extra percentage points and that's more gonna cover our take. Um, and, and that's something we have to get to. Um, and we do a little bit there. We, we have some tooling, you can, you can squint and make that argument, but I think we need to like really deliver on it and really deliver on it well, and that's why I'm excited that we've built such a good product and engineering organization and, and, and customer success and all these, all these pieces we have now is like, we can just, just start to chip away at that stuff and really execute on all these ideas I've had. Jacob Eiting 00:53:28 And at least the ones that they'll fit into a Q3, you know, in a quarterly buckets. <laugh>, I mean, it's so, Ethan Garr 00:53:35 You know, a lot of times at this point I'll say, wow, X company sounds like a great company to work for, but I actually happen to know because one of my former colleagues is now one of your product manager and he absolutely loves working at RevenueCat. So I, I, I know that revenue CAD is a, it's an awesome fast growing company. Very exciting. And uh, you know, it sounds like while you haven't figured out everything, um, your process for figuring stuff out is, is really sharp. And I think that's probably makes it a really fun place to, uh, to work and go sail. Jacob Eiting 00:54:03 That's that's the fun part, right. Don't wanna come in when everything's figured out that's boring. Ethan Garr 00:54:07 <laugh> um, so with that, I was curious, are there any key roles that you're hiring for that anyone in our audience might be interested in? Jacob Eiting 00:54:14 Yeah. Um, I just gonna make sure I got the URL, right? Cuz it [email protected] slash jobs, uh, go there there's uh, developer support data engineer, a lot of roles in a lot of areas. So just revenue, cat.com/jobs. We're we're, we're, we've got a pretty aggressive Sean Ellis 00:54:31 Anything specifically in kind of the growth and marketing, uh, Jacob Eiting 00:54:34 Area. Yeah. So I have a, I have a, Sean Ellis 00:54:35 Our Jacob Eiting 00:54:36 Audience for a growth lead right now. Perfect. For somebody to, to help me like coordinate cross-functional kind of PLG stuff, as well as, I don't know, help me make numbers get bigger is keep how I'm joking about it. Sean Ellis 00:54:49 I'm sure. I'm sure that one will be super interesting for Jacob Eiting 00:54:52 Yeah. I mean, if I knew I wouldn't be making the hire, so like Ethan Garr 00:54:56 <laugh> Sean Ellis 00:54:56 Yeah. Yeah. Well it's and it's also one of those things that you can't focus on everything and if you can have a specialist to Jacob Eiting 00:55:02 Yeah. Exactly Sean Ellis 00:55:03 Thing they think about is that can Jacob Eiting 00:55:05 That's the tragedy of a scaling CEO. It's like everything that's fun. You have to give to other people <laugh> yeah. Yeah, exactly. It's all good. I've got, yeah, I've got incentives to take care of it. So, uh <laugh> I get to do fun podcasts. So Sean Ellis 00:55:18 Very cool. So, um, one question we love to wrap up with, uh, each, each, uh, each interview is just the, the, you know, what, what do you feel like you understand about growth now that you might not have understood a year or two ago? Jacob Eiting 00:55:31 Yeah. This one was a good question. Um, I, I, I somebody's recently defined it for me in a way that clarified something I knew, but like didn't realize which this concept of like product channel fit, that, that a company can get product market fit, meaning the people need it. Um, and that's great and that will drive growth. And, and often in consumer that might in some, in certain markets that might be all you need. Um, but what I've also found is that most companies have a second story that gets told less often because it typically comes later, which is finding their channel that actually scales right. That the channel that they can pour money in the channel that they can grow on. And, and it doesn't necess. I mean, if you read a lot of the, the growth books out there, they talk about that like very init, there is some channel fit in that first product market fit. Jacob Eiting 00:56:17 Like people have to find out about you somehow, but I think it's rare that that takes you all the way to, to the finish line. Right. Um, and it's a continuous and it's the same for product market fit, right? Your each product market fit you find will take you a certain distance. Um, and I think it's especially, it's, it's becoming especially clear to me now, as we're getting into this, like later phase on growth, understanding that I can't just like post tweets about in-app purchases anymore <laugh> and like write up blog posts. Like we have to do a lot more than that to Contin at least to continue, Sean Ellis 00:56:47 Especially with all fake Twitter accounts out there. <laugh> Jacob Eiting 00:56:49 Right. Yeah. Who even knows, I, I actually have four real followers, like I, but, but that's been a real, a real realization for me, um, on the growth side and, uh, you know, the first step to fixing something is really understanding it. Right. And so that's kind of this growth lead role we were talking about. It's like, what, how are we going to really create a machine that's gonna take us through from, you know, probably, I mean, I won't have to take it to IPO or whatever, but it'll take us quite a ways from where we are now, once we get it dialed and it's some combination of the PLG in the sales and whatever, but it's gonna be special. And it's unique to every company I think is the other thing, right? Like there's very rare unless you have a company that's super similar in terms of like target and like everything. Um, you're gonna have to figure it out a little bit and I think that's kind of where we are right now. So Sean Ellis 00:57:35 Awesome. Yeah. No, I think, I think that is, uh, exactly right. And I, I think the, the product market fit I would say is actually the hardest thing. And, and, uh, the fact that you started with, uh, struggling with this problem and seeing people struggling with the problem, like, uh, I think, you know, if, if the problem's there, then it's, it's a, a factor of coming up with the right solution channel Jacob Eiting 00:57:57 Fit, channel fit, can't fix lack of product market fit right. Of Sean Ellis 00:58:00 The opposite. So problem, you knew coming into it, you built the right solution. You've, you've built a lot on that. And then it's just about, you know, finding all the people that really need it and, and effectively getting it in their hands. And, uh, and it sounds like you're doing that really well, but, uh, it's, you're, you're ready to take up to the next level. So Jacob Eiting 00:58:19 Ask me, ask me when you see me in, at the, uh, you know, NASDAQ or whatever, like then, you Ethan Garr 00:58:25 Know, I think, I think the fact, and you've, you've, you've mentioned it kind of offhand a few times here, the fact that your goals are so aligned with your, your end user goals, um, I think gives you such a leg up in terms of that, that long term sustainable, uh, ability to grow, you know, to drive growth and, you know, channel market fit, I think works a lot better when your goals and your customers goals are, are one the same. Jacob Eiting 00:58:46 And it keeps me, it keeps me motivated coming in every day. You know, I just wanna help developers make money. That's all, that's all I Sean Ellis 00:58:52 Wanna do. <laugh> you're, you're, uh, you like Santa Claus for the developers. That's a, that's a good role. <laugh> um, awesome. Well, uh, that's, that's all the time we have for today, but thank you so much for, for sharing the RevenueCat story with us, the journey with us. And we're, uh, I know Ethan and I will definitely be paying close attention to see where you take it from here, but I'm sure a lot of our listeners will as well. So Speaker 6 00:59:22 Thanks for listening to the breakout growth podcast. Please take a moment to leave us a review on your favorite podcast platform and while you're at it subscribe. So you never miss a show until next week.

Other Episodes

Episode 44

March 17, 2021 00:57:20
Episode Cover

Why UK’s Leading Online Pharmacy, Echo, Paused Growth at Height of Pandemic

“Ultimately, what it meant was we had to figure out ways we could resonate with an older audience . . . Stop talking to...

Listen

Episode 78

October 18, 2022 01:02:53
Episode Cover

Tech Meets Sports & Entertainment: San Jose Sharks Growth Story

In this week’s episode of The Breakout Growth Podcast, brought to you by SAP, Sean Ellis, and Ethan Garr talk with Jonathan Becher, President...

Listen

Episode 41

February 02, 2021 01:08:44
Episode Cover

From Onboarding to Healthy Habits, Noom's Growth is Powered by Psychology

We thought Noom was a weight loss company, but in this episode of The Breakout Growth Podcast, Sean Ellis and Ethan Garr discovered that...

Listen