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Zach Shakked, Hashtag Expert

David Barnard
December 16, 2020
45
 MIN
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In This Episode

This week’s guest is Zach Shakked, an iOS developer who is incredibly transparent about his experiences building successful app businesses.

While in college Zach built Hashtag Expert, an app for finding top-performing hashtags. After growing it organically for a bit, he started doing paid acquisition and quickly scaled it to hundreds of thousands of dollars a month in revenue. You can see exactly how much Zach spent to grow Hashtag Expert to that level because he publishes an interactive dashboard that shows the past couple years of income and expenses. Zach is now writing an email newsletter on his process of building a new app business with the goal of earning $100k in profit within the first 6 months.

In this episode, you’ll hear about:

  • The benefits of cross-promoting your new app from your previous one
  • Why weekly subscription plans are a good alternative to monthly or yearly plans
  • How Zach is building a $100k app business from scratch in 6 months

Follow Us:

David Barnard: https://twitter.com/drbarnard

Jacob Eiting: https://twitter.com/jeiting

Zach Shakked: https://twitter.com/zachshakked

Here’s the Outline of Our Interview with Zach:


[1:10] Zach’s background as an app developer; Command for Instagram.


[2:28] How Hashtag Expert was born.


[2:38] The marketing benefits of splitting one app into two.


[2:56] Cross-promoting your new app from your previous one; MindSnacks; Elevate.


[6:20] Marketing and user acquisition; customer LTV; Learning from Genady, founder of Momento and Vixer.


[7:58] Reporting in Facebook ads; Zach’s ad strategy as a bootstrapped app company.


[9:53] Price discrimination; deep linking and attribution; AppsFlyer; Casper.


[11:30] Advertising on Snapchat vs. TikTok vs. Instagram; the “flex” paywall.


[13:24] User intent & conversion rates for organic vs. paid users.


[15:04] How does Apple respond to price discrimination? App Review; Apple promotional offers.


[18:08] Customized paywalls for paid vs. organic traffic; Calm’s paywall.


[19:40] Pricing and paywall placement experiments; the elastic demand curve; Jake Mor.


[23:55] Weekly vs. annual subscription plans; refunds.


[26:00] The case for weekly subscriptions.


[31:48] Retention metrics for Hashtag Expert.


[33:27] The $100k app challenge.


[35:10] Zach’s latest project: a meal planning app that helps with weight loss; Weight Watchers; MyFitnessPal.


[37:11] How Zach got featured on Lifehacker.


[38:46] Code is expensive — validate your app idea before you build it.


[41:11] The status of the $100k app challenge 3 months in.


[45:16] Connect with Zach on Twitter or Substack.


Quotes:

“[Hashtag Expert] definitely changed how I think about branding an app. If you make an app, it should have one really good functionality. And then if you want to build another piece of functionality that’s similar but not exactly part of it, then separating it out into its own app can be another way to get way more users because you have a whole new set of organic traffic to get.” - Zach


“If you get somebody on a subscription, you know that they’re willing to pay, and so then you can push those to all your other subscription apps. It’s a smart strategy.” - David


“[With paid ads] you’re basically building a money-printing machine. Even if you’re at break-even, if I pay $10 to get somebody and they spend $10 and I don’t profit immediately, the next year or the year after, I could make money. And that just allows you to build a substantial revenue monster.” - Zach


“If you had a machine where you could literally put in one dollar and get back two, how much money would you put into it? Literally every dollar you had! Once that clicked in my head, I started spending on ads a lot.” - Zach


“Something about showing the product as like, ‘Hey, this costs money; this isn’t a free product’ — that changes how people view it. It’s like, “Oh, OK, I have to pay for this.” - Zach


“Meeting people where they’re at and giving them more options to pay, I think, is compelling.” - David


“The narrative that subscriptions in general are a way to trick users into paying more money is, I think, more and more not becoming the case.” - Jacob


“That’s a really savvy thing, I mean, outside of app businesses in general. Validate — just get some validation, some heat.” - Jacob


“I think sometimes entrepreneurs can get caught up in themselves and believe some demand exists for something because they care about it — but you really have to take that extra step to be like, ‘Are there 10 other people I can find that also care?’” - Jacob


“There are dozens of different use cases for every app, and if you’re at scale advertising and you hit a ceiling and you’re trying to unlock additional channels for revenue, then [multi-channel optimization] is naturally the next point.” - Zach


“I never saw somebody being super, ultra-transparent about how they’re doing things — like literally documenting exactly how they named their app and exactly how they think about an app idea. There’s a lot of high-level advice out there but not a ton of micro, super focused, super transparent advice.” - Zach

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Episode Transcript

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 your host, David Barnard.

And with me as always co-host Jacob Eiting say hello? Hello. Today, our guest is Zach head. Uh, while in college, Zach built hashtag expert an app for finding top performing hashtags. After growing it organically for a bit, he started doing paid acquisition and quickly scaled it to hundreds of thousands of dollars a month in revenue.

You can see exactly how much Zach spent to grow hashtag expert to that level because he publishes an interactive dashboard. With the past couple of years, income and expenses, I'll put a link to that in the show notes. Uh, Zach is now writing an email newsletter on his process of building a new app business with the goal of earning a hundred thousand dollars in profit within the first six months.

Welcome to the show, Zach. Thanks for having me. So tell us a little bit more and we'll get into that whole a hundred K in six months then. Cause that's so fascinating, but, but just real quick, just tell us a little bit more. Uh, so you started building apps like in high school and then like what led to, uh, uh, you're just one of those crazy.

A way to phrase this question. I think why apps, why apps? Money. Alright, thank you. Thank you for coming to this podcast. I mean, I started doing it in high school. Like my senior year. I was kind of like bringing my laptop around just like grinding, trying to build something that could like make a couple dollars.

And, um, yeah, I kinda just stuck through stuck with it throughout college. And just was building whatever I wanted. I think I started with like an insult generator. So literally just like generate insults and read them with the Siri voice. And then the first like actual successful app I built was command, which was an Instagram analytics app.

And I basically saw that there were all these Instagram apps, uh, making tons of money, like Instagram analytics and ghost followers and that. So I decided to make my own version. And that was like the first one I made that actually started making money. Then I changed it to a subscription. Cause I was like, wait, why?

Don't like, instead of just charging people five bucks here, five bucks there, why don't I make it five a month or 10 a month? And then just accrue revenue. And then hashtag expert was actually one feature. Out of command that I decided to take out and turn it into its own app. And it ended up being like way more successful and popular.

That's really interesting to take like a piece of a product and then stand. It was there was the functionality at parody between the two or was there something hashtags for did better or was it just because it was more targeted, easier to market or I'd say like in V1 it was kind of, it was like very similar functionality in both apps.

But it was, it was just the fact that I could now market an app all about hashtags. That was the whole thing. Like just the fact that you got a whole new set of keywords and they can all be about hashtags and generating hashtags, whatever. And that just allowed it to get way more organic traffic than it could have.

Yeah. I mean, it's, it's a much, much more cleaner discovery path, right. Uh, versus command. I don't know what people search the search, uh, Instagram analytics or whatever, like, uh, might be less of some less like. Who knows the word analytics, right? Yeah. Yeah, no, it's definitely, it's definitely changed my life about branding an app.

Like you totally, like if you make an app, it should be have like one really good functionality. And then if you want to build another app that's, uh, or another piece of functionality, that's like similar, but like not exactly a part of it and separating it out into its own app can just be like, Another way to get way more users, because you have a whole new set of organic traffic to get.

Did you cross promote from command when you launch hashtag expert? Yeah, I think I did. Yeah, a little bit. Just like a little banner at the bottom. It's another good trick, right? When you, and we did that when I mine snacks that became elevate. That was a way for us to like bootstrap. Our organics in the early days was to mine.

Our previous app send a big push out of banner. Yeah. Does that get, it's not a very long-term channel, but it's a nice way to like bootstrapping a new product. Yeah, I think so. What I did was is I put a banner at the bottom of, I think I did it both ways. So hashtag expert promoted command, and then command promoted, hashtag expert.

And I put like an iTunes tracking link. So I could literally go into like Instagram into app store connect and see exactly how much revenue was generated from that link. And it was like actually quite substantial after, you know, a year or two of having the dinner. So definitely helped out a lot. I mean, this is a big growth thing, David, right?

For these, a lot of these conglomerate companies that have, I mean, you, do you do this for some of your apps? Yeah, not yet. Yeah. It's so easy to, if, if you have low performing ads, just go ahead and put your own. Or like if an ad doesn't load or just having a default ad. And then putting inside settings, like here are my other apps we've even built in an open source to a little thing that like in settings has like more apps and it's a little scroll view to show more ads.

But yeah, I mean the big conglomerates that me and, um, companies like Apple lawn have it down to a science, like they're, they're just pushing users from one. Cause I mean, part of the thing is, especially with subscription apps, like. There there's. And we've talked about before, like the S curve of adoption of being willing to pay for subscription.

If you get somebody on a subscription, no. That they're willing to pay. And so then you can push those to all your other subscription apps. Like it's, I mean, it's a smart strategy. So you just, you find, I mean like companies like that are building out all the major use cases, like a weather app, a scanner app, a note taking app.

It build out all those like primary use cases that people are willing to pay for. And then you spend a ton of money on user acquisition, figure out who's willing to pay and then push those to the rest of your apps as well. I mean, it's, yeah, it's a pretty smart way to go about it. A lot about acquisition and marketing and Zack, I think when I think of people building their own app companies, I think you're one of the most savvy on acquisition that I know, or just like on marketing.

And I'm kind of curious, like where. You mentioned, like that's how you think about that a lot now, but was there some point in your like app building journey where you go from, Oh, I'm just making apps to like, Oh wow. Marketing and acquisition and all that stuff is, is, is important. I, so it started with it's very specific.

I remember it was, I just started talking to Gennady the founder of Momento and Vixa get him on the list. Yeah. Yeah, for sure. But, uh, we, we were just chatting. We started chatting on Slack and. He would just tell me like the tens of thousands of dollars he was spending per month on ads. And I just totally didn't get it.

I was like, I don't, I don't understand like why. And then I learned about ho like, if you could calculate LTV and you know that, like I spend $1, then I could get back $2, then you're basically building a money printing machine. So, and even if you're like at break, even, you know, if I pay $10 to get somebody and they spend $10 and I don't profit immediately.

The next year or the year after I can make money. And then that just allows you to, to build a substantial like revenue monster. So it's like if you had a machine where you could literally put in $1, get back to how much money would you put in it, like literally every dollar you had. So that like, once that, like that, that clicked in my head, I started spending on ads a lot.

And then it just got deeper and deeper and deeper. When did you start to think about actually changing your product around some of this stuff? Cause I know like, I mean, even just this, this transition from hashtag extra, like moving it out and like thinking about the go-to-market model, like at what point did you start being like, Oh, I should actually think about, you know, just think about my product choices in terms of my go to market strategy.

It was, it was really a, um, It really came down to it being difficult to like the reporting aspect of Facebook ads just became very challenging. Like seeing how much money I got back, like see, not knowing exactly how much money I was getting back on day. One was like a big trigger for me, which may be to say like, okay, how can I change my products?

So that most of the revenue I get today and not like in a week or in over the next six months. So that like that framing. Forced me to say, okay, maybe we shouldn't offer a trial to the people when they come from an ad. So that I know on day one, I got 70% of the money I spent back. And then I can know this ad is working.

Spend more money on that ad and broaden the ad book. Tell me if I'm revealing the secrets of, uh, of your train, but I didn't think you were pretty open about this stuff, but that's one thing that, uh, I think. Some, some folks are doing. And I think you're doing is just kind of discriminating. What offers you show people depending on like how they discovered your app, right?

Yeah. Yeah, totally. So I think that the position I'm in as a bootstrap company is like at the end of the month, I have to pay my credit card bill. Like I don't have $5 million, whatever in the bank so that I can spend and money. What about all your venture capital? You just, you can spend that. No, you don't.

Oh yeah. It must be tough. Um, but yeah, so because I'm bootstrap, it's like, I need, I need to get the money back as soon as possible because I have bills to pay. So that kind of puts you into a corner and. Forces me to do things like discriminating on price, but it's like if you come from a Facebook ad, you know, you get an option to pay 20 bucks a year, no trial.

But if you download the app organically, there's a free tier. I think people are maybe hush hush about it. I don't actually think it's that. Unusual. Like if I walk into a, uh, I don't know, a Koa campground, I get a discount. If I'm a AAA member or whatever, right. There are like all these sort of hidden discounts and secret things that companies are arranged for, for Gretta Marcus.

I don't think it's that strange at all. Yeah. And just online shopping in general, it's like if you go to Casper because, and you heard about it on a podcast or you just Google Casper coupon code, you have a different experience coming into it. Pricing wise than somebody who just goes to casper.com. Yeah, there's tons of that going on.

It's just not as, uh, it's just not talked about in that way. Like, it's harder do an apps too, like with the deep problem, like you need some sort of attribution and you use like, um, adjuster, a deep link system to, to do that. Basically. I just use AppsFlyer and then when the app launches upload the entire.

Attribution dictionary to a backend, but then sees like, did you come from Facebook? Did you come from Snapchat, tick doc. And based on that serves you like a paywall object, I call it, which is just Jason information about, you know, like what product you get offered, how long until the cancel button comes up, what the actual, like visual paywall you're seeing looks like.

Yeah. So like, I mean, it's interesting. I recently started doing ads on Snapchat and Tik TOK and for whatever reason, they're like. The paywall I've been offering for Facebook ads and Instagram ads users, wasn't doing well. So I tried changing it to instead of a 20 bucks a year option a two 99 a week, because maybe people are maybe like the younger crowd.

There is more likely to buy a two 99 a week option, for example. So it really gives you a lot of freedom and then you can just tweak it from the backend whenever you will. And was it mostly going from the different channels? Is it more often you're playing with price or more often you're playing with positioning as far as like features and benefits or what's the like, or is there not a set rule?

I would say like, I I've done it mostly on price, but positioning is definitely something I want to do. Like obviously if you're coming from tick-tock ads, All of the stuff that I'm showing you to upsell, you should be totally different because you don't care about getting more likes on your photo years.

It's all about getting your, making your video go viral. So it's a very different use case. But with, with pricing, it's not just like the price of one product. There's also like a whole flow. So I created this concept called a flex paywall where like, if you see the regular paywall for 10 to 15 seconds, And you don't pay then that to me is like the developer means like, you're like kind of thinking about it.

You're not sure what you want to do. You might leave the app and a button appears that says view more pricing options. And that that button will reveal a menu that has a trial, a weekly option, a monthly option, so that okay. 20 bucks a year. You're not going to bite fine. You've built the app equivalent of a high pressure sales.

Like

don't leave, don't leave, but bring out the free toaster. Let me throw that in there. What have you found as far as like intent, like do different ads kind of bring in users with different like levels of intent versus, and especially organic? Like, it seems like. Organic users are coming in having search the app store for some kind of like hashtag or social tools or whatever.

So do you see a pretty strong difference in conversion between your, um, the different, even the specific ads that you run and then, and then between organics and then Facebook versus Tik TOK versus Snapchat? Yeah. Oh yeah. I mean, the conversion rates are like so different between. Organic and paid and just the revenue I make per user is very different.

But yeah, I would say that like for paid users, there's, they're like more than likely to subscribe and an organic user just because like, they get really excited about this app. They download it, they take like that big step of like clicking the ad, downloading it, setting up their account. Then we say, okay, you have to subscribe to continue.

So after all of that, you know, sunk costs finally. Okay. I'll subscribe. Whereas with an organic user, maybe they're just like kicking the tires a little bit more or, you know, they just want to try out the free features or something like that. So, I mean, the conversion rates across the different channels are very different, but also at the same time, organic users have a free tier of the app, whereas the paid users don't.

So because of that, like just inherently, the conversion rate is, is lower because it's not as forceful. Have, um, have you ever gotten pushed back from Apple on, I mean, I know the answer to this question. So what kind of pushback have you gotten from Apple as far as like some of these techniques is? I imagine they don't see a lot of them, right.

When you get the review. So I actually haven't gotten any pushback about the techniques. Um, I think like you're perfectly okay to offer different subscription groups and different pricings and discriminate in that scenario. Yeah. I don't know. For some reason it just like, seems it's, it seems like to me, like something I would be like.

Yeah. I could see them being a pain about it, right? Yeah. Well, it's good. Just because it's like, Oh, this is something that makes my life easier. Surely Apple won't just let me do it. Let me see, has been pushing the promotional offers and the retention strategies and stuff like that. Their whole thing with promotional offers is like, They they're super inflexible for it.

It's so weird. I, I, we can do a whole podcast on YPO offers where like the myths of the century. But, um, but they're, they're, they're, they're all about that for that, like recapture, which just like, isn't a huge channel. Like it's just not a huge channel. The bigger channel is what Zack's doing. These like first subscription that like conversion moment optimizing that.

And Apple's pretty, like you have to create these multiple subscription groups, which they aren't like super cool with always. And you can't like. Modulate the intro offer or pricing or anything like that on individual products very easily. Yeah. Yeah. I think one of, one of the issues is like Apple never, like they don't see all of this just because I'm pretty sure that in the, in the test environment they're marked as organic.

I think so. So they like just see the organic paywall, which is very normal, but yeah. Um, I don't, I'm not even sure how I could build, like something just for after view to see every single different iteration of my payroll. Like how could they expect the development? It just highlights the ridiculousness of app review in general, right?

Like anybody who's like sufficiently savvy, they just have to trust you that you're not going to be evil. Right. Because you can very easily do bad stuff and just need to get by. No problem. I think in some form they've seen, like, they, there's definitely been situations where like, I shipped tried the, the, what I was showing to Facebook users, to organic users and they saw it, but like the only issues I've had have been like the standard ones of like, you have to make the pricing clear.

You have to, you have to show the full price. Actually, once in the paywalls, I was showing just the weekly price and I said, billed annually. So it was like two 99 a week billed annually. And then after the app had been approved, they flagged me and said, you have 14 days to fix this. And if you don't, we're going to remove your app.

Because you're not on vacation, the only problem I've had and ever since then, I'm like, Oh, we show the annual price. Like, no matter what, knock on wood. I think, I think, I think you might be, uh, you might be doing pretty good on that. I, I just, maybe it's maybe it's also my, our like, position that we just see.

Like everybody's like we see the complaints and rejection constantly, right. To follow up on that. Thread. Are you also customizing onboarding? Like something I've been thinking a ton about is like, and you know, we've talked about before, like calms, paywall. Oh, they must have AB tested that like crazy. So that's like the ultimate paywall or like, you know, you as a, as a developer, you're looking for examples.

And so you see something like calm. You're like, Oh, that must be like really effective. But the thing you miss looking at comps paywall is that like 50% of the people who get to that paywall are tapping on like Matthew McConaughey reads me to sleep or like LeBron James is like pre-workout meditation.

And so like what leads to the paywall is, is oftentimes, you know, 10 times more important than the like design of the paywall and other things. Have you done much to like, customize that, that process and experimented with your, your onboarding in different ways? I haven't, but I, I totally agree with you.

And I think that is like the next frontier. Like the thing that I want to start working on is like, What I was saying before, if you come from Tik TOK, you see one thing. If you come from a Snapchat ad, you see as something else, because like it's a hundred percent true that there are dozens of different use cases for every app.

And if you're at scale advertising and you hit a ceiling and you're trying to unlock additional channels for revenue, then that is like, naturally the next point. It's like, okay, if we're trying to spend 50 K a month on Snapchat ads, we need to figure out like, how do we make Snapchat, Snapchat ads work?

How do we make. Ads from this network work. And each of them has to be considered like as its own. I think. Yeah. There's a totality of the experience, right? Like we, we saw this at, at, at Ella, we weren't doing like super multi-channel optimization or anything like this, but, but just being very tactful about where we had the paywall moving.

I mean, I think your yours is pretty aggressive and that you do it very early in the process, but you don't want to do it. Like the first thing the app opens, right? Like you have to like lead in with something, right? Yeah. I don't know. To me, it was to be honest, like. One of the most shocking experiments I ever did.

And this was Jake's idea, which was like there, Jake, other Jake, previous guests, Jake, not me. Oh yeah. I don't know what you're about to say, but I don't want to take credit for it. He was like, like I had this screen where you could choose your plan. So like, you you'd be able to browse all the pro features and then after you browse them, you could say continue.

And then it would show you like a screen where you could pick your plan, like either annual or monthly. So he's like, why don't you just show that, that screen where you pick your annual or monthly plan to people, right. When they download the app and skip the features. So like you download the app, you like enter your interest for like what hashtags you're interested in, what like what categories, and then just says, pick your plan.

And that paywall like outperformed everything I had been doing previously by like a huge margin. Wow. Was it hiring conversion rate or just higher in like net conversions because of the lower bounce? Cause it was earlier in the process. I think both like it doesn't surprise me. It was literally like it just something about making it, the product, be like something about showing the product as like, Hey, this, this costs money.

This isn't a free product. That changes how people view it. It's like, Oh, okay. I have to pay for this. I mean, that's the secret of luxury products in general, right? It's just like, I mean, how much nicer is an Audi than a Volkswagen? It's like a little bit nicer, but like a lot of it's just the whole branding and the whole, like, you know, like convincing you that, Hey, like it's a status thing a little bit.

It's harder for apps to be about status, but it's also just like a, you know, this is the premier experience premium product you gotta pay to play. Yeah. When you did that and they experimented with, with moving it up like that, did you experiment with price at all? Like, did you see much, um, headroom on being able to increase the price or having to decrease the price to get those early conversions?

Yeah, so I actually ended up decreasing the price because what, what I noticed was that I could offer a higher price 48 a year versus like 20 a year. And people would pay it. I'd make up roughly the same amount of money, but way less people get to use the product. So I was like, okay, you know, I'll cut it down to 20 a year now, way more people got to use it.

And people are happier. They think it's cheaper. So it's, it's a win-win and I'm still getting basically just as much revenue. And it's kind of interesting if you have a very, um, you know, elastic demand curve, a lot of times you'll end up in a situation where price, the total earnings tends to be fairly similar.

Right. Maybe that's an inelastic demand curve, whatever it means. Uh, is that yeah, like you ended up taking home, like the market has a pretty good, like you're abstinent tend to do a pretty good job of like, just discovering the propensity of spend for the users that are coming in. Right. I see this a lot of times with like people who experiment with monthly and annual, like it.

Do an annual plan versus a monthly, it turns out that like the renewal rates and sometimes a lot of times, like, it's surprisingly interesting how they'll equalize, like the amount of money somebody is willing to spend. Yeah. Completely. And that's, that's what I've noticed actually like before this, I was looking at like the revenue cat dashboard to see how much revenue was coming from weekly, monthly, yearly.

And like over the past couple of months, I've tried being more forceful with like weekly or more forceful with. Monthly or just like adding it as an option. And it's literally like revenue from this one just transfers to here and revenue from, from weekly transfers to monthly. And it's just, you get the same amount, no matter what.

Yeah. You're sampling from the same underlying distribution of people. Right. So like, there's, there's, there's some like underlying thing. Packaging can only get you so far where I see it sometimes as people when they're just like grossly under overpriced, Um, or like just have some really bad packaging fixing that often will have a big impact, but once you get it, like fairly tuned in, then a lot of times, you know, you're not going to super optimize.

Right. Exactly. Exactly. And speaking of that, I actually did want to talk about, um, weekly subscriptions. So like, I I'm like in the kind of snooty in the developer community, it's kind of like a weekly subscriptions, but, um, But what, like, how do you, like, how do you see them, uh, in your product? And then like, what are the, what are the, how have they been effective?

And like what ways have you found them to be weekly products are like the easiest way to get access the easiest and cheapest way to get access to the product. Right. I paid three bucks today and I get to use all the premium features. And then some people will like subscribe on weekly for some number of weeks and then switch to an annual plan.

Or they might forget about a weekly plan, which does happen from time to time. But I just see it as being more flexible as like a way to give, give the user more options. And very rarely am I just offering a weekly plan. But even with that, I mean, I have no problem doing it because like, I'm very generous with refunds.

Like. There in the app, you can like get explicit instructions for how to go to get a refund. And if you're having trouble getting one from Apple, I'll pay Taleo and we're starting to do that a good amount and like very rarely do I get somebody who reaches out to me and is like, Hey, I subscribed the weekly a year ago.

And I paid you $200 that I did not mean to. Can you refund that has never happened. Not a single time. Wow. Really? Yeah. So I, I think that, and I was just like going through the weekly subscript subscribers in revenue, Pat, and seeing that. Like when the last time they used the app was, and a lot of them it's like, they pay weekly and they use it like every two or three weeks or something like that.

And for that reason, I have no problem with it. I do think like, The 20 bucks a week that night, the 15 bucks, like there, you're clearly trying to rip people off and like prey on them for getting, but like in terms of the percentage of my revenue, that's from those people who have been subscribed for like six months or more on weekly and forgotten, forgotten about it.

I think it's like a very small percentage. It makes a lot of sense. And like, I was talking to somebody in the industry, I won't name the company they work for, but they're talking about how, um, How some people like actually get paid weekly and do prefer. And so if you, if you have a cheaper, weekly subscription versus like paying up front at the 40, 60, 80 bucks, that it can be a preference for some people to have.

And like you said, I mean the ones that are like 10 or 20 bucks a month, that's like hundreds of dollars a year. Like that's pretty scammy, but a buck or two a week is like for, especially for something people are actually using like. It's that it's that kind of easy intro it's like, w you know, why, why do you pay five bucks a month versus 50 bucks a year?

Well, sometimes it's just easier to pay that five bucks a month. Yeah. I think this feels like this was a bigger topic of debate, like a year ago. Um, and the weekly subscription. Cause there were some people pushing, like don't even offer them. Um, but like, I think it's one of those things where I would love to know how Apple.

Thinks about this stuff when it comes in, like, do they give app reviewers any guidance on when to look more closely? Like if a weekly subscription is more than 10 or more than 20 or more than X dollars, like, do they say, okay, like it's still allowed, but double-check this app, like, make sure that there, cause that that would seem to me like that should flag, like, Hey, these guys might be running like an arbitrage, like.

Get users, get them booked and then, you know, whatever kind of scam, which, which does happen. Right. Um, or they'll switch their paywall or like say it's a free trial or whatever. Right. The three day I feel like the three-day trial into the weekly subscription should, should, should garner a little extra scrutiny, but it shouldn't necessarily, it shouldn't ever be like, Disallowed categorically, right?

I mean, yeah. And that's the interesting thing too, is like, there are apps where like you get a lot of the value in the first week or two. And so as a developer, it's like, how do you capture that? So like with my app launch and our pro actually just removed the free trial, because we're really pushing this icon creation aspect of the app.

Well, if you're going to customize your home screen, you can do that in an hour. And so if we, if we do a seven day free trial and you're downloading the app to customize your free, your home screen, you do that in an hour. You can't see your free trial. You've gotten all the value out of the app without paying anything.

Or right now we're only offering the $20 a year subscription. And so, I mean, I've even been thinking like, well, it's, this is an opportunity to actually do like. Three bucks a week. Somebody can subscribe for a week customized to their heart's desire. They only pay the three bucks. They cancel and move on versus like, it is like you were saying, it's like just meeting people where they're at and, and giving them more options to pay, I think is, is.

Compelling. And like, I was looking at a math tutor app and they were actually, like you were saying, Jacob, they were charging like 10 or 20 bucks a week, but it was one of those kind of apps. And maybe, I dunno, I didn't pay, I didn't look at it. But like, if you're, if you're tutoring your kid on math and you need to get them over the hump on algebra or something, And so you pay 10 bucks for a week.

You study really hard that week, and then you cancel your subscription. Like you've gotten way more than $10 of value out of that. And some of them are just that kind of short-term value experience versus the long-term value of experience. So it's kind of a weird thing now with, with like how to balance those things.

Yeah. Yeah. I think it's definitely like become a little bit more acceptable in the past year. Like Jacob was saying against it. Definitely. There was a ton of chatter about it being like out of the question to offer it. But I can just tell you from my experience, when I offer weekly, monthly and yearly options, the weekly is way more popular than a monthly.

Yeah. It's just cheaper. It's cheaper. It's like higher resolution, I think. Um, yeah, I think David and I kind of agree on this and is that like, people tend to be a little patronizing of consumers. Right. They'll tend to be like, Oh, they're just, you know, the simple phone user can't I don't know if you saw, we just messed up.

Like, people are pretty savvy actually with their phones. Right? Like people know how to work their phones. They shouldn't, you know, like, especially if people who are even waiting into paying for apps, which I still think the vast, I don't know. I would love to. Is this something that the CEO revenue cap, I shouldn't know, but like what the percentage of like iPhone users are actually engaging in, in app purchases, let alone interruptions.

Right. Um, but I would, I would wager to say, we're still on the early side of that adoption curve. Right. So the people doing them tend to be probably fairly savvy. Right. Um, and we saw that in our analysis last fall, too. Right. Like when we're looking at the, the cancellation rates and then, you know, Apple added the prompt that if you delete an app, it asks you want to manage your subscription or keep it.

And, you know, we saw outs in our platform that had like single digit retention rates from their free trial. So it's like, people know, like you were saying that 90% of those users figure it out, right? Yes. There's always going to be that 10%. Right. And that's, that's, you know, that's sort of some of the baked in upside of subscriptions.

Like, we can be honest about it, but it's actually. Not the narrative that like subscriptions in general are like a way to trick users into paying more money is, is I think more and more big, not becoming the case and like the data, the data bears that out. I would definitely agree with that. I think like very few people are making their first in-app purchase today.

I think it's where we're reaching some level of maturity where people understand, okay, I can go to settings and manage my subscription. I can contact Apple to get a refund if I need to. And. This app is trying to trick me very, very few people are like in that minority that don't understand that. Are you tracking your, um, uh, retention cohorts, uh, between weekly, monthly, and annual, and then looking at like the weekly cancellation versus weekly transitioning to the annual plan?

Like, is it like 10% of the people who are, who are canceling their weekly Panner plan are actually transitioning to a monthly or annual plan? Or is it, is it higher than that? I actually don't know that figure. I'd probably have to run like a really complex database query. Yeah. I was just wondering if you like, had it set up in your dashboard because that would be kind of an interesting thing to watch, to like the deeper I get into this, the more I realized, like, I want more, like, I need more data.

I need to be able to get all these crazy metrics, but like, I am seeing like the average lifetime on like a weekly subscription is like eight renewal periods. So like about eight weeks. And then, you know, monthly is like, Somewhere around like four to five months. So like P people who are subscribed weekly are staying for like a decent amount of time.

And like, if you eight times, eight weeks, times, three bucks a week. That's I mean, That's like that 20 bucks a year price that I'm getting from a lot of users. Yeah. Other way, right? Yeah. That's what you were saying earlier, Jacob. Like everything that all comes through users are fairly logical, right? When they're, when they evaluate price and benefit and stuff, like they ha they have amount they're willing to spend and they can kind of calculate it honestly.

Or subconsciously it's genuinely frustrating because like, like I did all this testing hoping to unlock like a little bit more value. And then the conclusion is like, it doesn't matter. Or like, I dunno, like I'm more confused now than when I started. Uh, so I wanna, I wanna talk about, um, your a hundred K app challenge.

Cause I think, I think. A lot of, kind of the themes that we're talking about and the way I've, I've watched you work over the last couple of years, it's kind of been building up to a lot of the themes with this. So can you, can you tell us a little bit about what your a hundred K I don't know what you're, what you're officially calling it, but I have it in my notes to the a hundred K no, that's, that's what I'm calling it.

Okay. Yeah, I dunno. I was just kind of like getting bored, working on like the existing apps and I wanted to build something new and. I never saw like somebody being like super ultra transparent about how they're doing things, like literally documenting exactly how they named their app and exactly how they think about an app idea, because there's a lot of high-level advice out there, but not a ton of like micro, super focused, super transparent advice.

Um, and I like writing, so I decided like, let's, let's see if I can make an app that from scratch that generates a hundred thousand dollars in profit. In six months and I'm writing everything I do try and make dashboards that show all the data for the app, the spending for the company and seeing if I can do it.

And that's, that's one thing I've always like debated with my mom about like, I've actually had these conversations with her where like, listen, if, if hashtag expert tomorrow start like was making $0 and just got kicked off the app store, I think I could build another app that made money. So let's, let's see what happens.

And hopefully people learn a lot, never underestimate the motivations, having a chip on your shoulder from your parents, something deeply psychological. We could probably go into a whole nother podcast about that. But, uh, so, so yeah. Tell us a little bit about. Yeah, the project and like what, you know, I think the, the, and we'll, we'll, we'll share this in the show notes.

Cause I think it's the primary source material that you've written is like, certainly we're 3d, but can you give us like the quick up-to-date like the story so far? Sure. Yeah. So I started by like, the first thing I wanted to do was figure out like, what space do I want to work on? What problems I want to solve?

Uh, and like one of the mistakes I've made a ton of times when. I was building apps in the beginning was just building something I thought of, because I thought it was cool and then hoping to make money from it. And then I eventually got lucky with the Instagram analytics app where I thought that was cool.

And it also happened to be good market. So I started making money and now having, having that hindsight knowledge, I decided like, okay, let me sit back research. Some app store, keywords, research, some markets like what apps are making a ton of money where I think I have like a unique advantage. And, uh, you know, I can build something that delivers value.

And that took me to like a meal planning app that helps with weight loss. And so, like, I stumbled upon that idea. I'm like, okay, there's a ton of weight loss apps that are like printing money that haven't been updated forever. Like weight Watchers is making tons of money and weight Watchers has been around forever.

Uh, my fitness pal is like making $7 million a month. And hasn't had like a material update in literally fitness is just an evergreen category, right? Like it's something that people are always, there's so much value in having people be in better shape people, value, fitness, so highly that like, they're always going to be some propensity to spend them.

Yeah. There's fitness and like weight loss. Well, like also weight loss, like factors into like a macro economic thing that's happening, where it's like everybody. In America is becoming overweight. So like the, the demand for a weight loss app is only going to go up over like the next couple of years. So that's how I land on that space.

But I think the thing I did that was interesting to note that few other people did, it was like the second I had an idea. I'm like, okay, how can I test this without writing any code? So I made a post on Reddit where I was like, Hey, would any of you be interested in a bunch of recipes that help you lose weight, that you could make really quickly, something like that.

And the post like did tremendous and like did amazing. And that just told me that like, people were interested in this, this like micro space of like meal planning to lose weight. So like, not just like, what should I eat? You know, here's the calories count them. It's like here are specific meals and the recipes plan them on your Sunday, cook all of them, buy them.

And that'll be your, your mechanism for losing weight. So I tested that with like a Reddit post and it did really well. So that told me we expected all that, that post would, I mean, it was like, uh, I don't know why the typical top post on that sub is, but it was like thousands of votes, right? Yeah. I literally got like 1200 uploads revenue.

Cat's launch post got 39 votes. So just as like put things in perspective here. Yeah. So demand is off the chart. So at that point I'm like, okay, like I asked people if they'd be interested in a post about how to meal plan to lose weight. So then I made the actual post. It didn't do as well, but like I posted it on like a weight loss sub read and a meal planning, subreddit, and a food subreddit and a recipe one.

And like in all of those that did pretty good and a reporter ended up reaching out to me. He was like, Hey, I think this is awesome. Can I write a story about it? So she wrote a story about it on life hacker. So that to me and I hadn't written a single line of code yet. So I'm like, okay, this idea, like has some legs, like, let me, let me start over.

I mean, that's a, that's a really just savvy thing. I mean, outside of app businesses in general, right? It's like validate, just get some validation, some heat. Like when I was thinking about starting revenue, Kat. Like I didn't, obviously I didn't start writing code. I started pinging people and emailing people and being like, Hey, would you use something like this?

Right. Like I asked him more directly. Right. Um, but, but, and then, and then the thing is, I think also what people get tripped up just like don't you don't have to wait for empirical proof. Right. I think your proof is pretty empirical. It was pretty damn good. But, but like, you just want to feel like something that's like, okay, like there's a little bit of pull here.

Like, this is exciting to some people, right. Right. Yeah. And I mean, with revenue count, I'm sure you got like great feedback where people are like, yeah, I hate dealing with subscriptions. Yeah. It's like nine out of nine people. I reached out to her like, Oh my God. Yes. I was like combined, but that was also combined with my personal experience.

Right. Which is like validating, which I think also in this case, it's something that you've experienced doing these meal, prep plans and stuff. Is that something you're just like validating your initial kind of assumptions? I think sometimes entrepreneurs can. Get caught up in themselves and like, believe some demand exists for something because they care about it.

Right. But they, you really have to take that extra step to be like, okay, are there 10 other people I can easily find that also care. Yeah. You're just saving yourself time. Like, I I've seen so many people, like I was actually hired to like build apps for other people, which I'm sure like a ton of developers have done.

And these people just come to you. They're like I had this idea. I want to build this like social network for photo sharing, blah, blah, blah, blah, blah. Or, you know, I want to build Instagram for, for food and I build it and then they launch it like nothing happened. So it's just, you're saving yourself time and energy.

It's just like, Hey, the money code is super expensive. I was thinking about that today. Like code just any code is very expensive. Right. Like the, the average price of like one block of code is just right. And if it does the right thing and it's reusable and it's functional, it can actually produce value, super expensive.

Right. And so even our revenue, we have like 10 engineers or something and we still are constantly like, okay, how can we not write any code? Because it's just, you know, unless it's something that's really, really needs it. And it's really, really, you need to be able to, you know, create reproducible value, like.

Make it something that you can hack with spreadsheets or whatever. Yeah. Yeah, exactly. So where are you at, in the process then? Like where are you? Um, like, is it, have you started writing code now and when w when are you going to launch? Cause you're what, three, three months into it. Yeah. So, um, so I started July, so July, Oh shit, three months, a hundred K in three months.

Um, well, like I'm at like a point right now where I'm just like building the backend, but I've just been like. So freaking busy, day-to-day running like hashtag expert. Like I just added a product manager and I'm hiring another engineer and trying to grow that. And at the time I was like not, I was not working on my main apps at all.

So I had a lot of, a lot more free time, but I'm still like trying to like schedule on my calendar four hours here, four hours there just like start working on meal, farm and writing about it. And I think just the collective pressure of knowing people are like waiting for you to do this. Definitely ads.

Um, I'm on the, I don't know, actually, if I'm on the sub stack or not, but I'll add myself there on the list I'm on. It's been great. But yeah, so, so the status of it right now is I built a dashboard for like inputting recipes into a database, which sounds really easy, but like having a database of where you can, like on demand, calculate the nutrition of a recipe and like substitute ingredients and know the updated nutrition.

It's like kind of complicated. So that like took me a while to figure out. And then I had like, this VA put in like 40 recipes. So I could just play around with the algorithm that serves you recipes. So I like, I don't think the actual building of the app is going to take long. It's more just like figuring out what is the flow of the app.

And all that stuff. Yeah. Stuff you can prototype, honestly, like, you know, with a script or with, uh, with, um, I don't know, spreadsheets and stuff like that. Right. Um, often that, that helps a lot. I mean, we, when I'm working on features at revenue Castille, we'll put paper prototype or spreadsheet prototype, or do anything I can to like using real data or whatever, create a simulation of the experience before we actually even move into product development.

Um, yeah, it's exciting. So, so. It's still targeting. So one question I would ask at the beginning is like you said, a hundred K in profit. How do you define profit? I mean, like after ad spend, after the cost of personnel, after cost of SAS, you count yourself in cost of personnel. No. Okay. My goal, so like I infused like five K of cash into this company.

My goal is to like, have a bank account balance of like a hundred thousand or like have a payment that will make my bank account balance over a hundred thousand. By like the date, right? Yeah. I mean, it's, it's it's I think it's fair. That's why I asked how do you break that up? I think if you're like only off by the difference in tax, I think you still, uh, I think you can still count it as a win cause I don't think that's pretty impressive.

What I've found is like, people are less invested in like the actual getting to a hundred K it's more just like, how are you building an app that makes money. That's what people are interested in. So I think if it goes over a couple of months, if it takes me a little bit longer, it's really okay. No, you'll fail.

It is a failure. I'll call you a failure and we will, we will talk about where she went wrong and, and, and how you couldn't produce an app. In six months, I made a hundred. Okay. We're going to get that ready. Got there. Well, I'm looking forward to it. I think your approach to how you're doing this is really interesting.

I think the, I think the. It's a really good example and public model of, I think, responsible business building, right. Or not even responsible and social response or whatever, but like, you're, you're going about the right way. That's going to narrow your scope as you go, as opposed to just like calling a shot, swinging, and then like you spent six months and then just like falls flat on its face.

Right. Which I think is a lesson. A lot of, I mean, you probably learned that the hard way working with other people, I think people are not the hard way, launching a few things without like, Proper validation. Um, so yeah, I'm excited. I think we've all been there. I think exciting. It's exciting to see how it, how it went.

Yeah. Yeah. Thanks for that. I appreciate it. We should probably should wrap up. We're hitting on the top of the hour, but man, it was great having you on the show, Zach. And, uh, we'll, we'll put links in the show notes. Um, but we're where can people find you, you, uh, post on Twitter or Instagram? Yeah. So I'm on Twitter, uh, at Zack shuck head and yeah, that's where I'm, um, I tweet occasionally.

And then the sub stack is where I'm doing like the bulk of my writing. So, uh, David we'll link to that, but it's called shit. I'm thinking of

nice. I just wanted to keep it things casual. Cause like the whole reason I started is cause like I just wanna, you know, I'm so I work for myself. I want to just be able to say whatever I want. Like. Sometimes I'm going to write about this challenge. Sometimes I'm going to write about other stuff. I'm just going to write about whatever the heck I care about and that's it.

It's casual. It's low-key, you know, I've been following is great. So. All right. Thanks, Zach. Yeah. Thanks for having me 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.