Starting a mobile-first subscription app business can be tough — there are a lot of decisions to make. Should you bootstrap or raise investor funding? How will you classify your business? When is the right time to monetize your app?
Fortunately, you don’t have to go it alone! One of the best ways to chart your course is to learn from the experiences of developers who’ve been through the process before. And one of the best ways to do that is to go through an accelerator like Y Combinator.
This week, David and Jacob caught up with Jake Mor to find out how he navigated the process of building a subscription app from the ground up. Jake is the founder of FitnessAI, an app that builds personalized weight lifting plans to help people achieve their goals without having to hire a personal trainer. The app was released in early 2019 and quickly grew to over $85k in MRR! Based in part on that growth, FitnessAI was accepted into the Y Combinator Winter 2020 batch and raised a seed round coming out of demo day.
In this episode, you’ll hear about:
David Barnard: https://twitter.com/drbarnard
Jacob Eiting: https://twitter.com/jeiting
Jake Mor: https://twitter.com/jakemor
[8:44] The fitness app opportunity: market size, structured data, and machine learning.
[10:02] Why you should charge for your app from the beginning instead of starting free and monetizing later.
[11:23] It’s still early days for personal SaaS.
[13:20] Pricing experiments; users are willing to pay more than you think.
[14:00] Veblen goods: demand increases as price increases (e.g., art).
[16:58] Price anchoring: $60/mo. gym membership vs. $60/hr. training sessions vs. $60/yr. fitness app.
[17:35] Early adopters and price elasticity: what will the next 3-5 years look like?
[18:53] Scaling ad spend; what Jake learned from his first $20k.
[20:00] Paid acquisition and ad spend.
[21:16] When FitnessAI became profitable.
[22:15] Pro tip: Put your ad spend on a credit card to sync up with Apple’s payment schedule. (But be very careful to manage your debt!)
[22:46] Funding, credit, and taxes: filing as an LLC vs. Delaware C Corp.
[24:11] How Jake applied for Y Combinator with FitnessAI (Jacob helped!).
[26:51] Jake and Jacob’s experience with Y Combinator.
[28:33] What Y Combinator looks for in an application: market size, team quality, and traction.
[34:22] Key insights from going through the Y Combinator accelerator.
[34:55] There are more business models now for the consumer SaaS movement.
[37:16] Bootstrapping your app vs. raising capital.
[39:36] The impact of Covid-19 on Jake’s business and how he pivoted.
[42:21] What’s next for FitnessAI: optimizing home workouts.
Hey, you're listening to the sub club podcast, a show dedicated to the best practices for building and growing subscription app businesses. We'll share insider secrets from the top subscription apps on the app stores. Let's get into the show. Welcome to the sub club podcast. I'm David Bernard and my cohost as always is Jacob IDing.
Say hi, Jacob. Hello. Uh, today as always David we'll see
you're in, you're in it for the long haul. Jacob, uh, today on the podcast we have Jake Moore. Uh, Jake is a founder of fitness AI, an app that builds personalized weightlifting plans to help people achieve their goals without having to hire a personal trainer. The app was released in early 20, 19, and quickly grew to over 85,000 a month in recurring revenue.
And based in part on that Griffith fitness, AI was accepted into the Y Combinator, winter, winter, 2020 batch, and raised a seed ground coming out of demo day. So, Hey Jake, thanks for coming on the podcast. Thanks for having me happy to be here. I'm so glad we're here to have this conversation. Jake, when did you, when did we meet?
I think it was. I feel like it's barely earning early in my subscription journey. Um, the last in-person dumbed up. Okay. That was the first time we met in person, right? Yeah. So 2019, I didn't even know you guys had met in person. Yeah. I kind of forgot. We went for some other ones, but yeah. Uh, it's weird to keep track of who you've actually seen in person and not, especially like at revenue count, like half the people I haven't met in person.
Very strange COVID times. So Jake, give us a quick bit of, uh, background, um, kind of your, your background as a, as a developer. And then what led you to, to build fitness AI? I mean, I've heard this story before, but it's really, really pretty interesting for the listener. Sure. Um, so I started coding in middle school, right?
When the iPhone came out, I was fascinated by just being able to build a tool that people could use. So I started coding. It didn't really go so well. Objective C the land, the land. And then, um, I got very into. I was developing on the Corona STK and Lua. Oh really? Yeah. It was always like Corona, not Cordova, Corona.
Yeah. That's a deep cut. I've used that STK. I've never shipped something, but I've used it. Yeah. Yeah. So it doesn't come with the UI library, like you can say, but there'll be a table view when you were shipping an app or a game. No, so apps. So I rebuild to every single UI element that I wanted. So like, you'd have to move it.
Objective C was so offensive to you that you basically reroute you in Corona. And I put a lot in games. We use games though. I, yeah, I've actually been, I was at their offices once a friend of mine used to be a dev evangelists there. So at a high school, you're working in Corona. Building apps. What did you, did you not have any, sorry, I'm going to keep going on.
Did you not have anybody to be like Jake? No. Jake. Oh, no. Jake. No. I went to an 80 person high school and I was like the techiest kid in all. That's good though. It's good experience. You got to wander through the desert sometimes, you know, definitely. I mean, thinking about all that, like geometry, cause like you're an X, Y pixels, like for everything.
Yeah. I think it helped with my sat and no kidding you. Yeah. You wrote, you busy kind of rewrite UI kit. That's awesome. Wow. So yeah. Progressed from there. Sorry. I'll let it go. So college came around, I went to, uh, to Emory, um, met some cool computer science folks in robotics club. That was like my first.
Crew of like engineering friends and then swept came out and swept was just amazing. So I got really, I got back into it with sweat. What happened after that? So, so I did a lot of engineering work at my dad's company. He's like a wholesale diamond company. So I did like a lot of, I rebuilt the website, did like the internal accounting stuff.
Did you also do that in Corona? No, no, no. Back-end was a PHP in the front end was just slightly more reasonable. Yeah. Slightly. And then after that, um, my friend and I co-founded a company called shop turn where we would, this was right out of college. So we would do it. It was like a reverse Postmates. So we would, you could schedule a pickup we'd return your item in person, and then you would just get your cash back.
Uh, we went through Techstars with that and then that one failed. And then right as that was failing, we had 50 K left in the bank and HQ trivia came out. You remember HQ? Yeah. So I just, for fun, I built a little website that would sort of tell you the answers. So it would, we hooked into their web sockets.
They get every question instantly, Google it on some server. And then all we would do is count, which of the responses showed up most and the little info texts and Google below each link. And that was 80% accurate. Wow. So, so that completely exploded. We had like almost a million hits and a month that's when they were getting a million.
So they had their toy, they have 12 questions on HQ, right? 12 questions. So at that rate, you get about 7% of the time you could win. Via 80%. Correct? Well, each question was 80% had an 80% chance. So you compound that 12 times. It's a 7% win rate. That's pretty insane. We had, we had a perfect game, I think twice, like the first time it happened, there were 10,000 people on the website and there were 10,000 players.
And then the next day we got Oh, right. Cause if you win everybody using your website, right. Um, so, so that happened then, then the CEO reached out to us. He was very nice about it. And then we just took it down. So w w w what we did do, they always replace it with a, an email form saying like, stay in the loop about what we work on next.
And 150,000 people put that in, but their email. And so out of the, like one to 2 million users, we had 150,000 emails of people who played HQ. Wow. So with 50 K in the bank, my co-founder and I decided to launch a competitor called maturity rules, which was a spin on H Q. It was like a, uh, it's sort of like if HQ is to jeopardy, we were majority rules was to family food.
So we would ask a question and you'd have to guess what the most popular response might be. So that went on. We ended up selling that to a friend of ours. Wait, where are you doing it? Live video, just like HQ. I did all the tech that, that production, like we'd live stream through it with, through a RTMP streaming.
It was just a horrible set up. And then after that, like green screen every day, and this was in the, we were conference room. Everyone was like, what the hell are these kids deal with? And then, um, so we sold that and we worked at that new company for three months and then. My buddy went traveling and I started to say hi, but the, the story with me and I started a while ago, because when I was learning swept, I made an app called lift block, which was just a way to keep track of your weightlifting.
So just like go to the gym and easily write, write stuff down. So I launched that in college and over the course of three, four years, tons of people use that. It just like completely organic. And then after majority rules, I was sitting on this huge dataset of just weightlifting. You know, like specific weightlifting data points.
And in my research I've found that there's almost no publicly available data set that's anywhere near that big. So I thought there might be something cool in terms of like algorithmic exercise prescription. Um, but I mean, I don't have any formal training as a formal experience as a trainer. Uh, but. I suppose I've trained more people than most of them.
So, so maybe tell, tell us briefly, like what fitness AI, give me, give us your YC. One-liner for fitness AI. Sure. Fitness. AI is an app that tells you exactly what to do at the gym. And now at home, obviously we've covered. Sure. And yeah, I mean, weightlifting is like a weird, it's a weird piece of like fitness that hasn't really been tackled yet.
There's no billion dollar company in the weightlifting space. But the market seems like it's there, like the market size seem like, it seems like it could be there. They're like, they're like 60 million weightlifters in America. And I think like if you took all the top weightlifting apps on the app store, I don't think there are more than 300, 400,000 subscribers total.
Wow. You know, a million max. So there's still a relatively low percentage of weightlifters who are using an app. So I think there's a really big opportunity. It's also a really hard part to solve because there are so many options in terms of what exercises you do, what weights you choose, what reps you choose.
That that's just the way we're very open-ended right? Like open-ended yeah. Bike riding or whatever. Yeah. But at the same time, like it's very structured data that he's worked out is producing, which landed really nicely down rhythms and ML. And when you, when you started, did you, had you always. Plan for it to be a subscription app.
Is that how you plan to like monitor? Cause there's like, you know, especially when you're, when you're relying on the value of a data set and you're like trying to build a user base and there's, there's lots of reasons maybe to not monetize an app early on like that, did you kind of have from the outset you decided like, Hey, I'm going to, I'm going to make this happen.
I'm going to charge money for it. And, and why? Absolutely. So I'm very opinionated in this subject. I think when you're trying to. It's like if you're building an app off of an idea that you have, I think the best indicator of somebody wanting it is if they're willing to pay it, pay for it. Sure. Yeah. A lot of people have this idea of, Oh, we'll charge later, but really if you charge even more upfront your wheat, like all of your, all of your initial users are using the crappiest version of your product and they're willing to pay for it.
Right. So it's a pretty, I think, a forced function to, uh, to iterate and solve for those people. And then what you're really solving for is how do I get people to pay for this? And eventually you just get to it. If you were to start free and then monetize later, you're going to have to go through those steps anyway.
Yeah. And it's actually kind of be kind of messier because the product's going to, you're going to layer in the monetization later, as opposed to like planning it as part of the product. Right. And people are very much divided. There are people who will pay and there are people who won't pay. And those people who won't pay my sister is one of them.
She'll never pay for an app. She doesn't, she doesn't understand it. She's like I can just get a free one. I think she'll, I think she'll change her mind at some point. I do. I mean, maybe not. Your sisters specifically, but I think we're still, there's going to be some S curve with like number of people who will pay for apps.
And I think we're probably still in the like uptick part of that curve. Like I think we still there's you're right. And that there's like huge portion of people who aren't paying for software for AF my dad, the guy, like I showed him a subscription app for NASCAR or something like this. And he was like, he was like, Oh, they want $5 a month for this like really cool feature or whatever.
And he's like, but I don't do that in apps. And I'm like, But you know what I do, but anyway, I convinced him them to do it, loves it, you know? So it's like, there is like, you can't get people over the hump. There's just like, this always is natural. I mean, I remember it too. I mean this little, you know, you were in high school when Swift came out and I'll tell you, I was.
In high school when people were just like happy when e-commerce, you know, when people were just like being comfortable using Amazon and stuff. But like, I remember that David, you might remember this too. Like in the early days of e-commerce, like, there was just tons of people who were like, uh, you know, when I, when I got married, this is.
DMI or whatever. But like when I got married, we didn't, we, in 2005, we did our, um, our, uh, our registry on Amazon and old boy, like what is going on and get these, get this monorail salesman out of town, right? Like this is some kind of technological hootenanny thing that we, we can't do. And so, like, I, I have a feeling that.
We might be in that stage two right now for software. Right? For, for, for personal like consumer SAS, like there, we're going to hit this like inflection curve at some point. And suddenly it's going to get a lot bigger. I feel like maybe will be a slow burn, but anyway, but, and, and to your point, I think it's really interesting how.
Um, and you've talked about before the concept of V Veblen goods. I don't know how you even pronounced that. Right. I thought that was a typo in the, in the show notes. No, tell us, tell us about, so, so Jake sta, and we've talked about this before, he's done a lot of pricing experiments and, and what, like what you were saying earlier about like the people who are willing to pay are willing to pay a lot more than you think.
So, tell, tell us about your kind of like pricing theories around that. Sure. So I don't know if it's bevel interviewed went honestly, either way. Google thinks it's misspelled, so, Oh, maybe it's with an anyway. Sorry. It's a good that D where demand increases. The classic example is, is art. As art gets more expensive.
Yeah. And is the dairy it's like a perceived value thing or? I think so. So your pricing experiments, as you continued raising the price, you would actually see increased conversion or, or at least enough of a, of a maintenance of conversion to offset the increase in price. Well, normally as you increase price, demand goes down.
So what you might try is $40 a year. Increase the price and watch conversion rate go down. So, so let's say you went from 40, 40 year to 50 a year and conversion rates went down a little bit. You might try 35 a year or whatever the middle was. Um, and then what happened was instead of doing that one, one, one experiment, I just decided to go up, even though conversion rates went down.
Sorry, not conversion rate. You, you want to, you want to look at how much actual revenue you generated. Right? Right. And to my surprise, it, like I would increase the price amount of revenue would go up. I would increase the price. Again, amount of revenue would go up. All of a sudden it would start going down as I increase the price, but there was like a little, it was like a local maximum where after I raised it, above that revenue started going up even more.
Wow. So I think there might end conversion rates actually went up. That was the craziest part conversion rates for the 90 year product. This was pre COVID. Everything changed now. Conversion rates for the 90 year product was actually higher. Then the 74 99 a year product, I believe. I see. I see. So you use relative conversion rates.
So if you had priced it at like 30, that's probably a higher conversion rate than your 90 product, but what you're talking like 60 versus 90, there was actually another, uh, inc uh, uh, re increase. And that, that, I mean, that's a good theory that yeah, you actually did find like a secondary, like demand dynamic, right.
Where it's very, it's, it's very dependent on the, on the category you're in. So. It's very aspirational. You're, you're, you're inspiring someone to, to take action. And there's a lot of trust you're telling them that, that this app that someone made is better than that trainer, you know, and that you've been going to years.
So like, if it costs more money, you can, you can sort of rationalize it, like, Oh, it must be great versus, right. So it's, it's very, the amount of times I've been humbled. Just by trying and experiment, or you can't even have like a preconceived, like, uh, of how anything can go on. And all I can do is try to explain there's two interesting things there that, that I wanted to kind of touch on one.
It is interesting, like in the fitness space where you have a $60 plus a month gym membership, you have $60 an hour training sessions. Then 60 bucks a year for an app that makes those experiences better or replaces just one training session with a, with a trainer. It's like, you, you do have kind of good price comparison, but it's still fascinating that, that you could raise the price and just keep raising and raising and raising and continue making more and more.
Um, but then secondary, I do wonder if like what Jacob was talking about is that we're so early in that S curve. That like the people who are willing to pay apps, like you said, are just willing to pay anything. I wonder how that evolves over the next three to five years and how pricing changes as subscriptions become more and more common.
And as consumers get more and more confident spending, I wonder if some of that, that price elasticity is going to start shifting lower. Um, as more and more people start subscribing to apps. Yeah. I mean, I think the, I think some of the back pressure on that might be like software quality. And I think that's where we'll see.
I mean, this is why I'm so excited about this whole space is like, we just finally have a mechanism where money can get poured into a product and just make it way, way better, like dumpster versus a dumpster. But like, it's like the bottom 20% of app quality on the app store, right? Like, I really think like the best fitness app is a hundred times better.
Right? There's a lot of improvement you can make and just like a really good app. And I think there will always be a space for that. And that's why I think this whole mechanism is great because we actually have a mechanism. We have a way for, to like build those up over time, as opposed to like, Oh, you got to get external funding.
Cause like, I mean, Jake correct me. I mean, you've, you've raised money at this point, but like, I think fairly early on this thing was pretty self-starting right. Yeah. The first 20 grand I, I completely lost. Or you gained knowledge. Yeah, I did have, um, one of my early is like a mentor who ended up cutting a check to me really early on.
He had started J swipe. You guys know J swipe. It's a dating site, right? It's it's like, it was like version of Tinder. Right. Yeah. Um, and, and he grew that to two, 300,000 in MRR having him by my side, w w w was really a huge help. Um, and he went on to start a cup, well, to run a company called the beer club.
It's like the antithesis of dollar shave club played opposite. So nice. You should check them out actually. What'd you say the beard club or the beer club? The beard club. Oh, okay. Got it. Got it. Got it. So like, uh, all of the stuff we need for those of us who don't shave. Yeah. And, and he spends three, 400 grand at the time was spending three, 400 a month on Facebook ads.
So I knew that there was, I was very aware of the minds. Also, Zach Zachary Schacht was, was in my work. He was spending a ton on Facebook ads and purely on an app. I sort of had, I knew Zach could do it. And I knew that this guy could scale up. So I thought how I could do it. Uh, I knew that I would have to stomach a bunch of losses.
You basically, it's just, you have to throw it's like throwing stuff at a wall and seeing what sticks you, you keep trying different ads until there's one ad where your ROAS is higher than one, and then everything changes. And w was this the first time you had done any sort of like Aqua's paid acquisition at all on any of your projects?
Yeah. Uh, wow. And you just like went in strong one on 20 K just like, well, I mean, it looked like a month or two just to lose all that money, but, but then I think my next, the next 20 K I spent, I was even, and then shortly after that I had made back the original 20 K. Yeah, it was just like growing 20, 30% every month, at least.
So timeline wise, when did w P P put me in wa when did, uh, when did you first start making some money with fitness AI? Like when did it first become like a real thing? Um, I would say a little over a year ago. Oh, wow. Things happen fast don't they? Yeah, they do. So I'm trying to think about my renewals. My, my first big renewal check big was like, um, I think last month, but also I was doing monthly for the first thing I thought was let's just charge like a small monthly fee and see if it could take off organically.
And I just feel that within like a week there was like no chance that that was happening. And then I switched to monthly or annual. The annual was really, I'm convinced you can't make it in the ad world unless you're doing, unless you're on annual plans. If you want to bootstrap. Yeah, cause you need that.
I can very hit cashflow, right? Yeah. Another trick is make sure you're spending everything on a chronic credit card. Cause Apple pay Apple sort of pays you on a reverse credit card schedule. So they'll pay you at the end of 30 days for the previous 30 days. And if you spend all your ad money on credit, you can actually get it to line up, but you have to, you have to be careful because.
I mean, yeah. I maxed out a bunch of debt, right. Yeah. To be very careful. And then, and then tell me if this is getting too personal, but did you take out like pers like credit against you personally or, or, or the business? Like how did you get access to that kind of credit? I don't know. I don't even think Amex knows.
So just using your personal credit cards to float the business. I, I, it was an LLC until then I switched to a Delaware C when I got into YC. Okay. But, but the, the credit was in the name, but you probably had it unless you were using Brexit or something. It's usually you have to put up personal guarantees and stuff like this, uh, to get, to get business credit.
Well, I think the LLC is sort of in your name. Like I had to definitely record a bunch of stuff about myself, right? Yeah. As a pastor, these are the kinds of hacks that, that, you know, I don't know. I think a lot of bootstrap founders probably stumbled into over time, but, um, but I, I think you don't think to do right.
And you hear somebody else do it and you're like, Oh, okay. Like maybe this is like a reasonable thing to do. Um, also the points, I mean, Yeah,
well, let's fast forward a little bit. And I, cause I w you know, we're starting to run a little short on time and I wanted to get into a Y Combinator. So tell me about, like, I mean, it could start even with just like applying, like, you know, why common area is famously a bit more skewed towards B2B versus B2C, and like, there's just a lot there too, for you to first.
You know, even submit an application. And then two, I'm just really curious about the application process. Like the kind of questions they asked and, and then, then from there we can talk more about the experience. So let, let me put a point on it and say like, why did you apply? I applied twice. The first time I applied, we had 2000 in MRR.
It was really early on. I applied, um, I mean, it was always a dream of mine. Like I always really resonated with everything that. They sort of preached, um, I was very into the mindset of like, like building things quickly, trying things a hundred times. There's, there's so many people in like the startup world too.
I was around that, that, that I didn't really think the same as, and people that YC think, you know, it seemed to resonate the same way. So I thought, wow. You know, maybe I should try and do that. It wasn't really much of a thought. I just thought like, okay, I'll apply. I applied the first time. It didn't go well.
And then we had all this growth and. Jacob, you actually help me with my application. Do you remember that? Uh, I did it. Was it the one that failed or the one that works? Oh, sweet. So that's a good data point. Yeah, I do remember. I mean, I, yeah, I help try to help some people. Uh, I don't, I don't remember send, send all your stuff to Jacob.
I mean, I can't promise. I won't, I used to do more, but, but I think the last time I had like 15 applications in the interview, but, uh, but yeah, I'm, I'm always like willing to help people get in. And it's kind of interesting to see. Well, I always ask about the motivations cause like, honestly, Jake, like that was a similar motivation for me.
Like of course, like you're like, well, let's just also look, they have a portfolio of a hundred billion dollars or something. They've started a lot of really great companies. Um, but like, honestly part of it was like, I just want to be with the cool kid. Right. Um, so let's be honest, just strictly Manatee.
Yeah. I mean, that's a good chunk of it, but I will say that once I got in, I was like, Oh, this is actually like, If there's a reason, it's the cool kids, right? There's a lot of people there have seen more than you there's like something invaluable about being with the partners at YC, just because they've seen so many failures, they've seen way more failures than they've seen successes.
Right. So, and they, and they can kind of steer you away from like, yeah, we've seen that. Not work out, like we've seen that not working out. Right. Um, and so that, that sort of like three 60 vision is super valuable. Um, but, but yeah. So what do you think, what was the, uh, You know, so you got rigid. It's not uncommon for people to get rejected once and then apply again.
So you think it was just like all the growth in between? Yeah. So the first, when they ask you to input your metrics, they say like, what was your revenue? One month ago, two months ago, three months ago. And I get an email like a week after submitting a week after the deadline. I got an email from Michael Seibel saying he was wondering if my, if my revenue numbers were where year to date or not.
And I was like, no, it's not. But what I saw though, was he, the way he responded to me, he was just replying to an email. So what I think happens is all of the applications get forwarded to the partners or to one partner. And I think they go through it in their email and I, on that email, I saw charts. So I think what they do is they probably scan like they're probably in superhuman.
You know, like hitting Jay growing through all these until they see like a chart that looks like something and then just quickly responding. That's sort of how I thought it went. So, so I definitely think, I mean, they're looking for growth. Like the two things I think that they care about most is market size.
Like is the market at, or above a billion dollars? A billion dollars, meaning like, is there a billion dollars in revenue every year to be garnered from the market or, or a hundred million and a billion dollar company? Yeah. I mean, it's basically a billion dollar would generate in a year. Yeah. I'm a market big enough to support a hundred million dollar a year company, which could be a billion dollar market.
It could be, even if it's a hundred dollars million dollar market, but you get all of it. It could just be that right. So right. So I would think of a billion is like their minimum. And then the next question they ask is, is this the team to do it? And I, that could be answered in a few ways. One is traction.
So if you have traction, there is no team question. If there's no traction, which I would say 50% of the YC companies, each batch don't have traction, then they're looking at specifically the team and. That's I think they're placing a bigger bed, but like one of the issues I, like everyone told me they hate solo founders and all that stuff.
I think if you have traction, it doesn't even right. It's a huge de-risk right. Like, Hey, this person was able to do it by themselves. Like that's even a bigger sign that they're, that they're serious and that they can, they can conquer this. And so, so one of the things I'm really curious about is like, in that application process, Were there questions, not just about kind of your market size, but whether a mobile first subscription app.
Could capture a large enough part of that market. Cause you know, it seems like, again, like I was saying earlier, like they're more kind of B2B. So was there, is there already an assumption within Y Combinator that a mobile subscription app can be a billion dollar company? Like th that hurdle has been jumped because if it's been jumped, it's really only been in the last couple of years with, with, um, um, Face tune and, uh, like tricks and calm and a few others.
So, I mean, it's really just kind of, uh, maybe in the last 12 to 18 months that that's less of a question. So was it a, was it a question? Um, not really. I, it was, it was, uh, it was, uh, they didn't ask too much about the market. They asked mostly about, I think they were trying to see how much of a pulse I had on like, was I running an experience?
Uh, experiments. Did I have frameworks for those experiments? How well, do you know your numbers? I think they, I think they gave me the interview because they thought there was a market there. I didn't have to go there and prove that. Yeah. I mean, what did you was that number you threw out? There's like half a half.
How many millions of weightlifters? Right? Like 60 million. Yeah. It's not hard to back into a big Tam on, on health and fitness. Right. And that's why there's so many companies. Right. And I think, I think one to your point, David, I think, I think. When you think about these, these companies, like you have to imagine that consumer subscriptions are kind of just a foothold for now.
They're like a toehold. Like if you look at how calm has tr has progressed over time, like, I actually originally, I think they started on the web, but like mobile becomes just one channel for them. Right. And then they move out into like all this different brand building and, and, and media properties and stuff like that.
So like, I think that I haven't seen that be just like. I haven't seen folks get rejected in the consumer subscription space and just be like, Oh, consumer subscriptions are too small. Right. Because it's like, they don't honestly like YC doesn't have a ton of domes. They have apps that they've done plenty of apps and that are in this space, but they don't have like perfect vision on where that's going to go.
Right. And saying that they don't think it will be that big. It would be probably overstating it. But to be honest, I feel like why is she always had its roots? It's I mean, it's original roots were in consumer software. It's kind of swung. It kind of was this case where like they were very consumer early.
It was, it was like Airbnb, Dropbox, Reddit, where like the, the, the big consumer apps. Then what happened as Airbnb grew, Stripe came in. And Stripe, I think built a lot of their early stuff for Airbnb or, yeah. And like, well, there became this like flywheel where being in YC as a B2B company was really powerful because of the network.
Well, if you're, if you're a, B to C, I think, I think a lot of B2B companies became billion dollar companies because their previous, you know, why see companies who were B to C, they started building solutions for them and they scale the same way. And then I think it sort of grew to be B2B and then. I mean, the, the batch is very it's it's very much like there are a lot of people with, there are a lot of people with traction and there are a lot of people with ideas and, and those people with ideas, you could usually match them.
Like someone's working on, on, on a problem. That's, that's just an idea that a lot of their batch mates would find useful. And if one of them scales, the other one does too. And it's a great way for YC to hedge themselves. I mean, that was a big battle. We didn't have a ton of customers in our batch, but, um, but since like I've, I've, I've, we've picked, picked up a lot of really great customers coming through YC and then getting that referral effect, which I think is part of it.
I think there's also, and I think it's part of the consumer SAS movement is like, there is just more business models available now, too. Like B2B SAS was so. Stable and easy to like grow well without like winning, like even Airbnb got super lucky a few times. Right. But now it's like, well, okay, you just got to get a product.
That's good enough. Right. And then like, you have like a machine that you can iterate on. Right. Which is the state. I feel like, I feel like you're in now. So what did, um, going through the batch, like what was, uh, Like, how did it affect the way you run the business or the way you think about it? Was there like any key insights or like, or, um, or aha moments or whatever, like while you were in the batch, th there were a few people that I met that were really doing some just crazy work.
It was like the most, um, Th th th there were a lot of people that I would say I learned more from my actual batch mates. Like th there were a few other people who were doing consumer app stuff, and you're just trading notes the whole time and iterating together. And. Improving together, not to mention, like being put into a, a room at a whole bunch of other highly competitive business, see people, right?
Like that doesn't hurt either. It's a little motivator. Well, you know, it was actually like, the people were great. It wasn't very like pompous at all. Like people were, there's no errors. I haven't found a really like an, and there's very little like overlap or competition between companies. In most cases, it's just so much.
Growth. And like, I don't know, just different areas that, that wasn't the thing we encountered either the winter 20, 20 batch wrapped up before COVID. So you were, you did do everything in person, everything, except for the week leading up to demo day, and one day was canceled, canceled. It was slowly taken away from us.
It was, you know, first we're going to do this, then we're not going to do that. And then, like we said, we were going to do video live video recordings. No, we were going to do it live. Then it was going to be live recordings. Then they said, we're just going to do a slide. So at least at least this year, they had a chance to like pitch.
I think they learned a lot from that, uh, experience your badge ended up helping me a lot because when you're like, as big as big as the market, as it is like in terms of the whole YC batch, the weightlifting market is. It's a pretty small market size compared to what everyone else is working on. It's not such a juicy opportunity.
And I think invent, like if you're just looking at one slide of every company, it helps. If you have a big, uh, A lot of it, it helps to be of good traction. So, so it really, it really, in my favor, I got a lot of interests from investors. Tam, a Tam number is never graft, right. It's always the attraction graph this and that.
It grabs your eye. And then at the bottom and be like, this is a $100 million Tam or something like that. Uh, so yeah, you're right. Like just having, just having, and if you can show, like, I imagine you kept growth going pretty well. Like during the batch, like that's the whole thing it's like, just like, honestly, like even beyond the batch, like that's the whole game.
Right. You want to keep going? Just like keep investing in your product, keep investing in your, go to market and like, just keep like stacking and stacking. And if you can keep doing that, like you're gonna grow something really big. Uh, so you, you, you raised a little bit of money right afterwards. Like what was your decision process for that?
Uh, for, if I were to, if I were to raise the money. Yeah. If you were going to raise the money, why like w w uh, cause there's a lot of founders, I think, especially in the folks that we work with, that, you know, these businesses can be pretty cashflow efficient. They can be pretty well bootstrapped. So I think a lot of them are kind of like, not sure what they want to do.
I mean, obviously I think once you get into YC, that's kind of, you've made your decision, right? Because YC won't say this and I honestly think they don't care too much, but like, Once you've taken a safe and like you've raised some money, like you really are kind of setting yourself up for, like, I've got to go for a big billion dollar company.
There are obviously lots of like ways to, to not end up on that path. But, but for the most part, that's the like optimal. Yeah. I already made that decision before going and getting into YC. I was an LLC before, meaning you get taxed once. So like I was going to switch to a C Corp. To get taxed twice. Right.
Cause the business-based doctors that I have to pay tax on my income. Right. And so I wouldn't have made that change unless I was really just like going for a billion dollar company. Right. You also don't have stock as an LLC. Yeah. So I made that decision and I think it's, it's really hard to bootstrap to a billion, although you can, I guess, I mean, it's just my, you know what it does, raising money, lets you.
It lets you think longer term. So when you're, w w when you're putting 90% of your money in the bank into ads, every single month, first of all, you're jittery, can't just work on the product because you know, you have a hundred grand that you're spending three grand a day. It's not like a, it's not a good lifestyle for making day to day incremental changes on product.
And once you have that, Like I knew that I knew that I was onto something cause people used it. I knew I could advertise for it. What I really needed to do is just take six, seven months off and just work on product and like fix everything, build, build that, all the features that people want to, you know, on day one.
And the only way to do that is is it like you're, you're, you're calm and you're focused and that's what the money did for me. And then COVID hit. So not only. Like now I couldn't spend money on ads. Right? When COVID hit all the gyms closed, nobody was subscribing interesting. So it didn't hurt you like people, weren't people weren't taking it home.
I guess they don't have weight equipment. Right? Our differentiating factor was, listen, if you're going to the gym, this is the perfect app for you. We're not like everything. We're not, we're not going to give you a live classes. This is just for gym people. And when COVID hit, w you know, revenue was down 80%.
Wow. Again, these are mostly annual subscriptions. So th those are basically just all organic. Like I just shut off ads after March and we've been slowly growing back up. So we're back up to, I think we're just 20% below pre COVID right now. Wow though. That's a big, I mean, that's just a big tackle. Right?
And that, I mean, now, I mean, I don't know, you tell me, but like w probably happy to raise money now. Cause you'd probably be, I mean, you good chance you'd be dead otherwise. Right. Like, and that's not, not physically dead, but, but, uh, but that's, that's the other advantage of the money. I mean, cause you're, you're essentially when you raise money, You're saying like, okay, I'm going to sell my company.
I'm going to sell 7%, 10%, whatever for cash that doesn't go to you personally, it hits your bank account. It hits the company's bank account. Right. And what you get in return is like, The opportunity to a turn that make your company more stable, make it bigger. Right. I think those what you explained, especially at your stage Jake, like that's the right thinking at a seed stage.
Just like, I just need some money to like, let me think about this without being hand to mouth, like every month. Right. Um, and then secondly, would you also experienced the benefit of, is you were able to survive an Oh shit moment, right? Sorry. Can we it on the podcast, like you were able to like weather. A storm and you'll, you'll make it out the other side because you had a little bit of buffer.
Right. Um, and so I think when I raised, when we raised money for revenue cat, like, I didn't really understand all the dynamics of it. Like I kind of the same reason I got into YC, it was kind of like just what you did. And then it was like, after I raised the money, I was like, this is what I did. Like, this is, this is what this means now.
And like, um, you know, I don't think it's good or bad. I think every situation is very different. Yeah. I think it's, it's good to share some of these stories. Yeah. Cause like, Not that many people have done it. And a lot of people think about it and a lot of people wander into bad situations because they don't know what it's actually for.
So, yeah. Thanks for sharing that. Okay. Well, that's actually a great, uh, time to wrap up. Um, great positive note to end the podcast on last couple of podcasts, we didn't end up on quite such a cheery thing. I didn't die headaches, thriving, and we have a whole new version coming out in two weeks. Which optimizes your at-home workouts as well.
Yeah. Think about it. Like, it's almost a perfect time. Like you just, you had the money and then like, suddenly, like you don't have to deal with customers. Right. Like, I love customers that they like, they're, they take effort. Like you have to work with, you have to do support, like you have to, you know, stuff.
So sometimes, you know, it's easier to iterate when, when you have like, less like inbound. Right. So, yeah, it's a double benefit. There was definitely a, uh, A silver lining. Yeah. As we wrap up, tell us more about, um, kind of where you're headed with fitness AI, and then, um, you know, where we can find you or any other projects you want to, uh, to mention.
Sure. So when COVID started, we, I, I basically wanted to, to build the best possible app that, uh, you know, to help people get stronger and to help people stay in shape, regardless of if gyms were open. So we just widened our offering to let people input what equipment they have, um, what their goals are and everything sort of works magically.
You can say, I have a 20 pound dumbbell, a towel, and a textbook make me work. That's awesome. And we'll build something and not only will we build it, what will make it incrementally harder at the perfect rate for hundreds of exercises, no matter where you are. Uh, so it's really, this whole thing is helped us take a step in the right direction.
And you could find me in follow both me and fitness AI on Twitter. All right, Jake, it was fantastic having you on the show. And, uh, as we talked before in the, in the pre-show that nobody listened to, uh, we'd love to have you back on and talk, go, go into more depth about, uh, scaling ad spanned and, uh, and kind of it, it'd be fun to touch base again at six months and see where you are in your journey as well.
So it's great having you and, uh, hope to hear from you again soon. Thanks for having me guys. It's been a pleasure to make sure you never miss an episode. Subscribe to the show in your favorite podcast player. Thanks so much for listening until next time.