Growing to $1M MRR with Paywall and Pricing Experiments — Francescu Santoni, Mojo

David Barnard:

Hello, I'm your host, David Barnard, and with me today, RevenueCat CEO, Jacob Eiting. Our guest today is Francescu Santoni, the CEO and Co-founder of Mojo, an app that enables everyone to easily create top-notch videos for Instagram and TikTok.

On the podcast, we talk with Francescu about how Mojo grew to over 1 million in ARR, the most impactful pricing and paywall experiments, and why it's important to choose complexity instead of just letting it happen.

Hey, Francescu, thanks so much for joining us on the podcast today.

Francescu Santoni:

Hey. Super excited to be here.

David Barnard:

And Jacob, nice to have you on the podcast today.

Jacob Eiting:

I'm here, David. I'm ready to talk about subscriptions and with a person I've known for a very long time. So exciting.

David Barnard:

Nice. Speaking of long time, I did want to go back in history a little bit. We don't always dig into the history of apps and founding stories and stuff, but you've got an especially cool ones. Tell me about what you were doing way back in 2013 and how that brought you to founding Mojo.

Francescu Santoni:

I think the relationship that I have with apps and video is long. I think a bit like Jacob, I started as an iOS developer and an entrepreneur, but around mobile apps. And in 2013, for the first time I was an employee as an iOS developer. I met my co-founder there, but also my team was great because I was working with Matthieu from Photoroom, which I think is also a huge fan of RevenueCat.

Jacob Eiting:

Fan of the Cat. Yeah.

Francescu Santoni:

Like me. We did work on this cool video editing app together and with, of course, a small ninja startup team, and we got acquired by GoPro, so we continued to work on video.

Jacob Eiting:

That became the official GoPro app, right, for a while?

Francescu Santoni:

Yeah, exactly. We transformed the Replay app into the Quik app.

Jacob Eiting:

Which is still is the base of the GoPro app every time I open it up. Yeah.

Francescu Santoni:

Yeah, but it was also a lot of fun story both in term of engineering and product, like the transformation. One product into another one was really... At the time also, fun story, they also acquired Splice, another video editor at the exact same time. So we had to merge code and stuff.

Jacob Eiting:

That had to be... We could do a whole podcast on the social and emotional dynamics of that, I'm sure. Also, GoPro was already public at the time, right?

Francescu Santoni:

Yeah, exactly. And we got some shares, but unfortunately that went down.

Jacob Eiting:

Yeah, public markets are tough. You know?

Francescu Santoni:

DJI phones. But the brand is still amazing. I love GoPro.

Jacob Eiting:

Yeah, they still make great cameras. The software's really good. I use their old app. Whenever I live stream my race car races, I use the Quik app to set up live-streaming straight from the GoPro to the hotspot and all that, so it's pretty interesting. Even if the equity didn't pan out, it's needs to still have the impact, right?

Francescu Santoni:

Yeah, sure.

David Barnard:

And the bigger impact, and you kind of brushed over it a little bit, but you were working with Matthieu from Photoroom who went on to found what's now one of the biggest apps in Photo. You went on to found Mojo, which we're going to talk about, with a co-founder who was there. Huge successful app. And then the CTO at Hugging Face was also there at the time. So you've got this Replay mafia. I think that's true of a lot of startups, like the PayPal mafia. We get a lot of really smart people together.

Jacob Eiting:

High density, have similar experiences, and then you also get a built-in network. But you guys probably can take some credit for France's reputation in AI. Not all of it, but there is a reputation that Paris specifically in France, after San Francisco, it might be the most known hub for AI right now. And it's not in spite of this, right?

Francescu Santoni:

Yeah. I think Julien and Matthieu were the pioneers of actual applied AI in France and they really paved the way. And we also got those new players like Mistral. We also got the poolside team moved from I think the US to France. So yeah, I think right now... But don't start me about AI because we will never talking about either mobile or [inaudible 00:03:49].

Jacob Eiting:

It goes to show that the folks that are winning in this category or seem way ahead in this category didn't start last year, they started a decade ago and were building the expertise. Then the right moment happens and then all of a sudden you have a thing. But these talent density networks are really interesting...

... in our thing, I strive to one day create a RevenueCat mafia. That's my dream.

David Barnard:

We're never going to leave Jacob. Come on, man.

Jacob Eiting:

Right, yeah. That's what all-

David Barnard:

You're stuck with me.

Francescu Santoni:

The fun story is Hugging Face actually now that I think about it, and hello to Claymore and Julien, they started as a mobile app, a chat bot, like a Tamagotchi like, a virtual front. So I think at some point the circle will close because I think they should do it again.

Jacob Eiting:

It also highlights how interleaved mobile and AI is. I think there's been some people being like, "Mobile is over and apps are over and AI is starting," and it's like, they're the same thing. The AI revolution is another app revolution, and in some cases came very much from the talent and learnings of those. It's just a great form factor for it.

Francescu Santoni:

I think for AI, I think something that's never said enough, I think AI simplified so many things that you can make even more things in mobile, especially on the creation side. So consumption on mobile is normal, but creation and Photoroom, like Mojo, I think creation on mobile would get much, much bigger thanks to AI. And we also have this US or European point of view, but if you think about even our top markets like Brazil or Asia, they don't have enough laptops or computers. So if you bring that power into mobile, meaning that you can do a lot more stuff with less and fewer interface.

Jacob Eiting:

I didn't even think about that, that the leverage you get out of a textual interface gets you much more difference on a mobile device than it does on a laptop where maybe point and click is actually pretty good. That's interesting. It highlights the constraints of human computer interfaces, and that's actually probably where a lot of our constraints lie today. Anyway, we're here to talk about apps. So let's-

David Barnard:

Yeah, well, and we're here to talk about the story. We already dove down a pretty deep rabbit hole.

But I want to resurface and say, I think a lot of people listening to this podcast, whether they're already working at an app company or dreaming of a side project or whatever, if you're working at a huge company and you think you want to start a little startup, maybe go find a cool app startup to join and find one of those high density places, and then go start your startup after that. It's pretty cool how many people from that team went on to found very successful companies. That's probably not a coincidence.

Francescu Santoni:

I can double down on that just because just after uni, I immediately started my first two companies in mobile that I failed miserly, but I learned a lot. And once I started to really join that really talented team at Stupeflix, I've learned so much, that then starting a company again was much easier. I don't spoil also, but I think mobile and AI from the previous founder of Stupeflix, maybe they are also planning something cool.

David Barnard:

Nice. And then to finish, to close that loop, a year after joining GoPro, you and your co-founder left GoPro and started a new app and went through YC. Tell me a little bit about that.

Francescu Santoni:

Yeah, basically we're obsessed about going fast, having impact and having a lot of fun. So we were always looking for this innovative idea in creativity. And the fun part is also we did AI back then, but it was the previous wave that didn't really took off, deep learning and CNN and all of this.

So we decided basically to make an animation app. You could put 3D text in the real world. So augmented reality. We were a bit too early, let's say. But we had so much fun and we applied to YC. But at the time, French to YC was not a big thing, so we were not really thinking that we had a realistic chance. But eventually we got in and we learned so much. And then we were followed by RevenueCat, I think the next batch, and then Photoroom not so long after.

Jacob Eiting:

It was around 2017, '18, yeah.

David Barnard:

And so you started the augmented reality app and raised money through YC, went through YC with that and then pivoted?

Francescu Santoni:

Yeah, it was hard, because I think, and this is a good lesson actually for the Sub Club. Basically what we've successfully done with the augmented reality app, that was we got a wow effect. So basically when you study the app, you will show immediately something that you wouldn't think were possible with technology. So you will see your actual text in 3D in the real world, and that was so cool. We were also detecting emotion and putting emojis automatically. So people were so hyped that they were downloading the app a lot. Apple was also super hyped because the quality was there and AR of course was very strategic for them.

But so we got those hundred of thousands of downloads in a few months. And it's really, really hard to at some point acknowledge that you have to shut down something like that. So basically the reason we did that and the proxy metrics that we used, and thanks to YC, is you really have to do something that people love first. So no matter if you have 1 million users that just like your product and don't come back, you need to find those 100 users that are really dying for your product. And we couldn't crack any engagement metrics like retention or stickiness.

We tried a lot of things in AR. We tried to really pivot inside the app first. So we did interactive stuff during the 2018 World Cup with live scores and a lot of things, gaming, dancing, we tried brainstorming a lot of things. But at some point you have to realize that it was too early for augmented reality to take off. And we really re-centered on our core beliefs around video creation. So good learnings, but really hard, hard time when you go back to zero and say, okay, now we also find an idea-

Jacob Eiting:

Those retention metrics. I just was talking to a very nascent founder yesterday who's just launching an app and was like, "Oh, I think it's got legs or whatever." And I was like, "What's your retention?" That's what matters. I don't care how many downloads you have, I don't care if it's been featured. It's like, how many people are using the app? How many people are coming back? And then if you're paying, how many people are renewing. Paying is interesting, but also renewing.

And the thing is you can't hide. You can't hide that. If people aren't loving your product, they're not going to keep opening it. And I've been in that world too where you've got something, you try to wander around a local maxima, which is good. Eventually you find, okay, you try moving in as many orthogonal directions as you can understand. And then if you don't see a big lift, then at some point you have to go like, "Well, we need to jump somewhere else in the distribution."

David Barnard:

I think a really good way to think about that is, do you have a gimmick or do you have a product? And a gimmick can be fun and-

Jacob Eiting:

Well, it can be the start of something, right?

David Barnard:

Yeah. Yeah. It can be the start of something, but it has to turn into a product. And this is something to think about even as you're adding features to an existing app that maybe have some level of product market fit, is that, and I chased my tail a lot with my launching a pro app because I would get these big splashy launches because we'd do something super innovative, but then it wouldn't stick as a real feature. It wasn't a real product, it was just something that got people hyped, got a lot of downloads, but it wasn't a real business, it wasn't a real product. People wouldn't engage with it over time. People downloaded, played with it for a minute and moved on with their lives.

So you really got to build the features and the products that people are going to come back to. To your point, Francescu, that you didn't have a business, people weren't engaging over time, and it's great that you figured out that you needed to pivot and made those hard choices.

Jacob Eiting:

And Apple's Love can actually make this worse, right?

Francescu Santoni:

Yeah.

Jacob Eiting:

They could artificially inflate your organics.

Francescu Santoni:

That was the main reason that we actually added subscription into Mojo from the get-go.

Jacob Eiting:

Right away, I remember talking to you about this.

Francescu Santoni:

As you said, you have this kind of funnel. Of course you need activation, but we didn't even add an onboarding paywall for a few years, because what we wanted to measure is the actual interest. And so at some point of course, you have to grow a bit more, so you put this paywall into the onboarding.

Jacob Eiting:

A dollar is a dollar. If you can capture a dollar, you've captured something measurable and real and you can't really lie to yourself, right?

Francescu Santoni:

Exactly. The best proxy ever.

Jacob Eiting:

And even if it's small dollars, it doesn't matter. If you can move that up, now you have something measurable that you know is real. And then like you said, when it's time to actually make money, then you can start to think about how to actually optimize for that. But there's some argument to, you have to build a lot of stuff to justify a subscription on day one, but not that much stuff.

Take one really cool thing, put it behind a paywall and see what you get. There's no harm in that. I think some people are embarrassed to charge for something not done, but it's like, whatever. People don't have to buy it. Nobody's entitled to what you built, right?

Francescu Santoni:

We were very, very embarrassed.

Jacob Eiting:

Yeah, you should be. You should be. It's good. Starting anything is embarrassing. That's the thing is, if you can't just manage embarrassment for a really long time, you're probably not going to build something.

David Barnard:

As you pivoted into Mojo, what did that early first launch of the Mojo app look like?

Francescu Santoni:

I think like Jacob said, that you have to be a bit ashamed. We were just pivoting and we were at founding story, should we give back the money to investors? So we took that call with our YC partners or Michael and Gustav. They were almost laughing at us. He's like, "What are you talking? We invested in you, not in your product that throw emojis everywhere." And basically the first thing that they said and that I say also as a business angel and coach sometimes is, it's never too early to release your product.

So I think we took still two full months, a bit more to build the first version that what I called alpha and we did a product hunt. And basically that day we decided to put subscription for the get-go. I think the first time that I talked to Jacob. I remember we were just the two of us, my co-founder and I, plus an intern, which is now working on an AI app. And we were like, if on the day zero we get one trial, and at the time the trial was 30 days, because we didn't want anyone to pay by accident.

Even wanted to put $1 a month a subscription, but we eventually set it to 10. And we are like, if we get one trial period from one country that we don't know, so except us and France because of friends maybe, we will celebrate. And we got, I think on the day zero, 30 trials. Even was the app that we thought was broken. We really thought that the app was broken. Half of this thing were glitchy, but you can provide value to people. And what we enabled people to do was actually much, much easier than... We didn't realize that until the actual actual launch.

Jacob Eiting:

I do really think with ideas, people are always like, "Oh, does this have legs? Whatever, whatever." And if you're asking yourself, it's probably not. Even RevenueCat, it took longer for a B2B thing to get any sort of positive feedback, but I could tell in conversations with people and I could tell there was legs and stuff, but for consumer it pops. If it's good enough, it'll pop. Now, can you build something sustaining and differentiated? That's a different question. But often you have good signal on day zero when something's really, really useful.

David Barnard:

And then skipping ahead to today, you shared with me that Mojo now does over $1 million in MRR, has over 40 million downloads and does that with a team of 30. So incredibly successful by most metrics. I wanted to go through some of the things that it took to get there, some of the experiments, some of what the team has done with such a small team to build such a great business around this early app.

I wanted to start with pricing and paywalls, and what are some of the bigger lessons you've learned growing to this size around paywalls?

Francescu Santoni:

I think paywalls is a good example of things that we did very late on, because we were heavily focused on the product. But at some point, you cannot take things for granted. So of course, most of the value you capture is from your product itself and from the value that you provide to your users. But at some point, you have to show them that.

I remember because the first signal that we got was from the App Store team from Apple is like, you're not pushing your paywall enough. And the first paywall experiment that we did without even changing the paywall was putting it at the end of the onboarding, which everyone was doing that, but we were like, "Oh, but they didn't try the app yet and whatever." But they have a trial.

So the first actual big experiment that we had was the onboarding paywall, and I think it account for most of the trial even today. And then slowly moving of course of the funnel of impact, so the paywall position on top. Then you want to iterate of course on the paywall design, the paywall layout and core narrative of the paywall. Do you want to use the-

Jacob Eiting:

How do you split that? How much do you think about visual aspects and the weights and things like that, which matter, the subconscious and psychological things? And then also how do you think about what it's actually saying? What is the actual message?

Francescu Santoni:

I think we were super lucky at some point to hire someone dedicated to monetization, Michal. I think he wrote a great article on the RevenueCat blog actually about our experiments and growth. So what we've done, as you said, we're a small team. So every decision, every focus is like, you cannot spread too much your attention and you really have to be focused.

So what we've done is basically do one quarter after another, focusing on those kind of prioritization part. First is position of the paywall. Two is really the totally different paywalls, just try different paywalls, one with a video. What we did is mixing silver bullets. At any given point we'll hear from, oh, you have to show a video, a simple, no a lot of text. And sometimes it's scrolling, sometimes it's like you have to do a trial reminder, putting the trial to go. There's so many best practice that change over time. So just changing these big different concepts was really helpful because you never know with this kind of audience what will work better.

Then we done that a bit more localized also into different countries because I think it's also one specificity that we have also as a European company, I think from the get-go, you have this very international worldwide view, where I think US is a third of revenues only. Number one country, yes, but just a third.

So then you always have to think about all the countries. So big layer chain. When one paywall is working, you can do smaller change within that. And then you do price testing and really changing the price and see what works. But it's hard because what I say is you should basically take two things into consideration. One is of course the average revenue per user that you get, ARPU, but the other is what is aligned with your product because some product are more naturally aligned with more B2C distribution, so you want that to be a bit cheaper, even if you lose a bit of money starting, maybe you will get it on the longer run.

And also you want to focus on high quality user, so you want to charge a bit more. And you can look at different pricing on the industry like video editing, photo editing, and you will see basically where you are. In our case, it was charging a bit more, because also it was profitable a bit more for us, but also targeting a bit more pro-sumer users, like small businesses and so on. Because when you have a freemium app, you get a lot of free users and it's hard to, sometime they will pay but cancel early, and it's hard to get all of the signal. And even now, to be honest, it's a problem that we're still focusing on. It's like, how do you get your core user base to pay the right price without losing the benefit of the other?

Jacob Eiting:

That's just pricing and packaging. Are you doing any separation in tiers or anything like this now?

Francescu Santoni:

No. That's something that we didn't try. We didn't try basically. What we have still left in the monetization side is trying the weekly. We didn't try. Trying the, as you said, changing the limiting factor in any given price and doing maybe-

Jacob Eiting:

Like what features?

Francescu Santoni:

... a different process. Yeah, exactly. What feature go into what plan. Businesses actually, they often, like you do user interviews, they say, "I don't understand why you charge $60, $70 a year." And sometime App Store reviews like, "Wow, what this price is like... It does not make sense."

Jacob Eiting:

Of course. Well, the product generates massively different surplus value depending on how it's being used. So one of my gifts at RevenueCat is I can understand the value generated to some degree and measure, but for consumer apps, it is very different. I think it's one of the core challenges of doing price discrimination.

Matthieu talked about this a couple of years ago when he was on the podcast, but this has been a big part of their strategy too, is differentiating between these different use cases and trying to hit them with the right price points.

I think as we see more... We were talking about the power of mobile first tooling at the top of the call, and I think more and more apps are going to see this where the breakout apps, if you're not a Duolingo, if you're not a massive consumer brand, the other path is going to be this B2C, B2B pro-sumer path. So I think there's a lot to be figured out there because it's complex, right?

David Barnard:

Anytime you're helping somebody make money, you can charge more money.

Jacob Eiting:

It's a surplus value, you're capturing surplus value.

David Barnard:

And for somebody who's just your random person to TikTok or Instagram, there's not a lot of value for them personally. Their grandma's seeing their-

Jacob Eiting:

It's not something they translate easily to cash, right?

David Barnard:

Yeah, exactly. And those are the people who are like "$60 a year to post better videos to Instagram, this is insane."

Jacob Eiting:

It's so funny how that affects so many people, how mad that makes... I've probably said this on the podcast 100 times, but if somebody isn't mad at you about your pricing, your pricing's wrong. If you make everybody happy, you're definitely underpricing. So it's about strategically deciding how many people you want to make mad and who you want to make mad. And it's actually a good signal if people are complaining about your price a little bit, because you can always take that information and adjust it and things like this.

But the last thing you want to do, especially when you're on the outset, is set your price point super low because then not only have you left a lot of money on the table, you've also set the perception that your product's not worth that much. And so, if the developer's saying It's only worth a dollar, why am I going to value this thing?

Francescu Santoni:

You want a fun story about that?

Jacob Eiting:

Sure, yeah.

David Barnard:

Yeah, we do.

Francescu Santoni:

Now that I think about it, I got a user telling us that we should charge way more, so they end up with less users using Mojo under the pro, the top templates so they could stand up even more on social media.

Jacob Eiting:

Oh, that's really interesting.

Francescu Santoni:

"You should charge even 10..." because some people, they create agencies out of Mojo. They will hire three freelancers and they will charge the business.

Jacob Eiting:

We should give people Sub Club challenges, David. But your Sub Club challenge is this, create a $100 a month skew that's just full of exclusivity luxury templates. I would be really interested to see what that experiment yields, then trade off. Because again, it's like there are people for whom that exclusivity has a lot of value and you can capture some of that, I think. It's the whole LVMH model, just charge for exclusivity. It'd be very French, right? Of course.

Francescu Santoni:

Yeah, exactly. As French, we love design, we love tech and science and math and luxury and exclusivity. So it's fine.

David Barnard:

It sounds like you did raise your prices significantly. Did that have a huge impact on the business?

Francescu Santoni:

Yeah, it did. I think IRP increased in the range of plus 50% at some point.

David Barnard:

Wow.

Francescu Santoni:

So yeah, it had a huge impact with all the testing. Sometimes it's just, I think the latest experiment that we had is we didn't realize that how Turkey inflation was hitting them and the price point there and whatever. So Michal had to test a few weeks ago that we roll out with plus 100% the IRP because inflation and all of this. So sometime it's just like, you don't see how much this can impact your users and also positively.

And even now, I think we didn't crack the logic of it, the core, as you said, how do you split? Because every time we increase the price, we also make those part of the user that tried the product, but then at some point they don't get enough value so they churn more. If we had several price points I think will be the perfect thing. But it's also we're humble enough to know that it's hard to manage several price point and tiers.

Jacob Eiting:

It's hard to manage because it's complex. And if it's complex for you, your customers are also going to be confused. And that in itself will create downward pressure on conversions if it's hard to buy. And I think that's the challenge.

Francescu Santoni:

Even for the engineering team. And everything that you do, then you have to think about, oh, is it tier one, tier two-

Jacob Eiting:

Your matrix becomes very complex.

Francescu Santoni:

Matrix and all of this. There are two kind of companies or product or developers, the one that's always say that it's easy and sometime I'm a bit like this. And sometime you're so humbled down by the, oh, it looked easy but actually the simple stuff, it should take two days, but it took-

Jacob Eiting:

A thousand little ropes-

Francescu Santoni:

... two months.

Jacob Eiting:

... that hold you down over time as you build. I think about us, we've had one, two, three, four, five. We have seven plans over three iterations. And that's not a ton for consumer, especially if you're doing it in different countries and stuff. But even that of thinking about all the transition states between those different things and why, not only do you have to make that work commercially so that you're like, oh, what happens to people on this plan to compare to the new plan and all that stuff, but you also have to make work technically. What happens technically when this person wants to go to this plan? And then thirdly, operationally, which is, how do we read that data? How do we put it into our charts? All of that stuff, the complexity grows.

So we push experimentation and trying stuff, but I do think there is a limit to the amount of complexity, unless you have a really good process for trying and shutting down things and clearing it out.

But I'm curious, what would you say percentage of your R&D resources go into monetization and building that stuff, versus building new product? Do you have a split in mind or is it like, one quarter we're focused on this, one quarter we're focused on this?

Francescu Santoni:

We just have one guy on monetization.

Jacob Eiting:

Just one guy, just going.

Francescu Santoni:

It's Michal.

Jacob Eiting:

He's got Superwall, RevenueCat, just ripping. I got it.

Francescu Santoni:

No, but it's true. We are using Revenue Cat a lot from the get-go. I think at the time it was super controversial because people were think it's easy. But I managed-

Jacob Eiting:

Yeah, we were talking about this before the call. You were a very early adopter.

Francescu Santoni:

Yeah, because I think that's exactly the kind of thing, but from the outside it's like, oh yeah, it's super easy. The SDK is getting better, maybe the Storekit part, but-

Jacob Eiting:

It's definitely different now than it was in 2018, for sure.

Francescu Santoni:

Yeah, but it was still good enough for you to do things easily. But you always have this kind of, if you want to be really into excellence and have this great experience, you always lacked a bit nice touch and make it work perfectly.

David Barnard:

And even today with Storekit too, as easy it is, you said you launched the MVP of Mojo in two months. You're not going to launch an MVP in two months if you're-

Jacob Eiting:

With monetization.

David Barnard:

.... building out your own subscriptions and paywalls and everything else.

Jacob Eiting:

At least in a future-proof way. We're transitioning to the ad segment. But we were talking about how in the early days, the early adopters really had to be believers. They had to have as much conviction as you do that this is a good idea, that you don't need to convince them. And going back to your first launch of Mojo, it's like that's who you're looking for. You're looking for those first couple of users who get it and they can see through how bad it is and see through all of it and still understand it. And the other crossing the chasm to Turkey and all those other things really can wait.

You really just want to find those couple. And you were definitely of that first couple, I think you were in our first a 100 apps, but every single one of those people had to have a real belief in RevenueCat.

And then over time, we were talking before the call, it's now become the opposite where often you see people being like, "Oh, don't do anything else." It was very non-consensus at the beginning, which is true to some degree for all tools. I think we're seeing it now with generally AI and when to use LLMs and not and all of this stuff. And then at some point it'll switch to everybody being like, "Why are you doing this the stupid way?"

David Barnard:

But you were talking about pricing and having a dedicated person and what kind of focus you have on monetization and the split between product monetization. We can't chase a rabbit hole, but I wanted to get back to that.

Jacob Eiting:

I had an opportunity to show my company, David. I cannot leave it. I cannot pass on that.

David Barnard:

Hey, I started the show, it's my fault. But I wanted to get back to that because I'd love to hear your thinking about how much iteration you put into the monetization side of things versus like Jacob was asking, versus product, and how you balance that when there is so much low-hanging fruit and constantly iterating on pricing and packaging. But you got to have a product to sell too. All these things are a tough balance.

Francescu Santoni:

For us what worked well so far is really to put that... With no sponsorship intended, and I can also quote Superwall to make that a bit even because we use that for the paywalls, but if you get the right tooling and the right person that is obsessed about that, then you can iterate a lot. And Michal is doing a lot of experiment. He's really dedicated to that gross part and monetization, paywall, pricing, onboarding. CRM, we don't do yet. We might do a bit more with Michal. So from time to time, international expansion, he gets one developer when we need for experimentation, but most of it actually he can do it by himself.

Jacob Eiting:

Are they a technical background or engineer or a growth marketer? What's the-

Francescu Santoni:

Not necessarily, but he has really this data mind. He's from Czech Republic and with this kind of structural approach with everything is documented in the [inaudible 00:28:53] and you experiment. And this is working very well. But for the product part too, yeah, you're right because I think I'm coming back to the first part and maybe an advice for the creative space. I think the Sub Club listener can be divided between the people that are more maybe business side and want to try apps and make it. And with AI today, I think it's really a new El Dorado, kind of Godrej. But there are also a lot of more indie developers that have this craft and I think that originally are developers.

For those, I think in creative space, never forget that we are lucky enough to build product where people would create something that they would inherently share. So either with the watermark or better with Mojo at the beginning, I think until several hundred thousand dollars per month, we spent zero dollar in that. Why? Because we invented basically the animated posters in stories. It didn't exist. When people saw a random guy posting this super great video, animated poster on Instagram, they were asking in the DMs, "How did you do that? That's not you." And people were just referring the app without any referral mechanism.

So that's also just I wanted to give a bit of hope to developers because it's hard often to know how to put effort. Where do we put effort? All in ASO, UA versus product. But if you really are into the right product angle, you can make it by having something inherently superior as long as it's interesting distribution channel. You want the output of your app to be visible. And if you have that, think about how you can leverage that to get some-

Jacob Eiting:

Well, it's just much more efficient than having to spend. Even ASO you have to spend to get it right, and then obviously acquisition is a very $1 in, $1.10 out or whatever. It's not a highly leveraged game. Versus having what we used to call a K-factor, I don't know if people still call it that, but how many downloads does it download beget? But building that into your product from the beginning, it will make a difference. And you don't have to do it... I actually would suggest not doing it in a way that's very clearly just an afterthought. It's just like, oh, share your scorecard or whatever. That's fine, but what you want to do is think about a way. Your product is made for sharing. So it's built in and that's the case with a lot of photo editing stuff, maybe some more than others, or creation stuff.

But you can think about it in other aspects. Invites are a famous in social. Invites are the thing which I don't know if you saw, they're shutting off free access to contact books. So we'll never see another viral social app again I think. But thinking about how does the core loop of the app... And then there's really not a clear line. There's maybe monetization, but growth is actually bigger than that. Maybe it's a good chance to ask about this.

So you said initially you didn't have any growth spend and stuff like that, which I would recommend. We talk about things that hide your lack of product market fit. Dumping a bunch of money in acquisition is a good way to convince yourself you have something when you don't.

Francescu Santoni:

Thank you.

Jacob Eiting:

So get off the ground and make sure you have something. But you go from that couple hundred thousand to million, what were the moves in place that allowed you to get people driven into the app?

Francescu Santoni:

From this organic push from the users and also Apple, we got also a lot featured. So again, and I'm super grateful for the App Store and also the App Store itself for existing, I'm a huge fan. No, because it's true because before if you remember about the other stores, even publishing a game on any video game console was super hard. Distributing a software on PC was super hard and the App Store is really intrinsically worldwide and all of this.

So this is why I'm talking that not just to thanks the Apple team, but also because we are like this worldwide approach. We are these spikes in countries that organically we didn't spend any money, but then at some point we got our first user acquisition guy, Anthony, that really changed the way that we leverage this smart acquisition in the fact that you can have from Apple search ads also the more broad Meta and TikTok approach. You can get ROI approach.

Of course SkAdNetwork also changed the game a lot, but user acquisition was our first, let's say non-organic gross lever with an approach that was still mostly relying on this organic factor. So what we did is at the time, it was still a thing to pay the influencers to publish in their own accounts rather than use their content to ads. So we tried in several countries to do those campaigns. They were not profitable, but they enabled in some countries.

I remember Brazil for example. Brazil, we did the campaign, it was a fail. Small spike and this, but a few weeks later we got the initial spark enough and it's still among our top five, even top three countries nowadays. So paid acquisition like influencers and thing. And then that turned paid into a bigger scale with all of the challenges, gross data of course, because with SkAdNetwork even with MMPs, even though there is-

Jacob Eiting:

How much effort do you put in trying to match attribution these days?

Francescu Santoni:

The core thing first that we gave up in a way that we don't do PLTV and stuff, we push a lot more the yearly plan to make that much easier.

Jacob Eiting:

So the idea being is you can get the payback on a cohort quickly and then you don't have to worry about it.

Francescu Santoni:

Exactly, you want to get the payback in 30 days kind of ish.

Jacob Eiting:

How do you... Without fingerprinting, or you just go by country or you break it down into a demo or how?

Francescu Santoni:

The first split, and that is the easiest part. You split by country, you split by platform also, of course iOS and Android. Sure. Now we went back through and depending on the day-to-day versus longer budget allocation. On the day-to-day it's more like, let's say we attribute the subscription by the date of ad spend. Let's say trial start with the ad spend of that week. But on the longer run we do that cohort based. So basically the user acquired by a certain amount of ad spend are blended by country and also of course country platform.

Jacob Eiting:

But you'd have some shifting window cohorts where you're like, okay-

Francescu Santoni:

Yeah, exactly.

Jacob Eiting:

... we're just going to say that the ad money we spent in this period created these trials. Whether or not that's accurate or not doesn't matter. That's maybe a good enough approach to make sure you're not bankrupting the company in ad spend.

Francescu Santoni:

Yeah, exactly. And maybe I got some feature requests for you.

Jacob Eiting:

Oh yeah, yeah. Hit me.

Francescu Santoni:

I think what we're using, we are actually using RevenueCat as one of the source of new users. Something that I was talking with Bernardo and of course lately we're thinking about the way to attribute actually new users or this paying, should be maybe hybrid approach where you could basically say you count as a new user at least for attribution for that sliding, we know cohort. But you could have, let's say that a user is inactive for a certain amount of time, let's say 30 days. Then you count back to the new period. Because what happened is when you spend a lot of money, you increase the past cohort because you're retargeting because of a lot of debt. And some of them maybe uninstalled the app.

Jacob Eiting:

They already have the app installed, but they still click an add.

Francescu Santoni:

Exactly. Or they already have even sometimes somehow with iCloud. And nowadays, I think even without uninstalling, because people, I'm not sure they even uninstall apps again with the automatic offloading and stuff like that. So I think something like hybrid is something that we want to try in the next few weeks.

Jacob Eiting:

The world has shifted so much in attribution. I think the thing is that the new world, the new fingerprintless world has made it so there's so much less value in the technology there, which is also why nobody's rushed into solve it because there's not a huge business to build there. But for us, thinking about it, there's one of the things we can do. I'll just say we're thinking about it.

David Barnard:

One of the things that you mentioned to me when we were prepping for this conversation was don't fall into the product led growth trap. A lot of what we talked about early on was product led growth, but then you did start venturing into paid user acquisition. But what did you mean by that, don't fall into the product led growth trap?

Francescu Santoni:

What I mean is basically you have to really know your strength and know what are not your strength and what are your weaknesses. And basically, you can have three buckets. Thing that you're inherently bad at. I can give you some example for me, I'm bad at ops, I'm bad at things that are boring. I'm bad at a lot of things. So I would not be owning a regular OPEX business like delivery app or whatever. I will be super bad. I will be the worst CEO ever.

What we are good at Mojo is the product and the tech and this angle. You have this angle, this leverage and this market, which is you create video, you create the most beautiful video, it's inherent. But then when you're in the middle and you're more with a regular app or business centric, if you don't have this core product leg, it's not by adding a referral whatever that you will think that you made it. And I think Jacob said it, it's not something that you add later on that you fake it.

Of course, it's always good to do a bit, but don't think that you will crack it after a while. And if it's not in the core DNA, either in the distribution of your app or your content that you create out of your app, or the strength in your team. So what I meant by don't fall in the product led growth is product led growth is always kind of shiny.

Jacob Eiting:

You mean just make the product better and they will come, right?

Francescu Santoni:

Yeah, exactly. But also if you're like a business person, accept it and work on paid and make that the best LTV and CAC and beat people on the user acquisition and paywalls testing even more and don't fall too much into, oh, when we build this six months feature of referral, the app will grow up. Or when we need the sharing those cards, yeah, sure, but nobody shares even their Duolingo card or whatever.

Jacob Eiting:

There are a few counter examples of apps that don't focus on anything else and just can win through a good product, but there's always something, there's always either Apple Love or it's something inherently viral or it's something inherently unique they do. I think of Anki, the flash card app that's very popular. It's not even a paid app I don't think, but they just built a really good product, but maybe not a really good business. Or maybe Craigslist is a good example of where it's worked, some counter examples of where they haven't had to really think about growth. But those are outliers. You're not Craigslist. You're not one of these apps that just gets lucky probably.

Being somebody who did that a lot for some years at Elevate, we wandered the wilderness on... Before we really dipped our toes into leaning into a growth engine and realizing the product's as good maybe as it's going to get within some parameters, and it had some sort of product market fit, but we weren't going to double our retention through new features. It was probably some sort of inherent level that it gets to and then you have to figure out where your leverage actually lies.

David Barnard:

I was really surprised, and you kind of touched on it earlier, that even at a million plus in MRR, you aren't doing CRM. You're not doing some of the basics.

Jacob Eiting:

It's that PLG.

David Barnard:

But what you were talking about is focus, right? And so yeah, maybe you're not doing CRM, but you have a whole person dedicated to constantly doing monetization experiments and paywall experiments. It sounds like a lot of the success of Mojo is looking at what's working and being introspective about why it's working and doubling down on those strengths versus looking at what you're weak in and overly focusing on those weaknesses.

Francescu Santoni:

It's true. At some point you still have to accept, and that's why we probably will do a bit of CRM at some point, but it's exactly that. Even the top five languages in Mojo does not account for more than two thirds of our user base. So if you think about CRM and scaling that to different languages and having the impact, CRM is probably single digit growth so that you can activate with a lot of effort. We were a bit reluctant and we pushed that back.

Of course at some point, you need to as the company grow and it is a bit more established, you need to take those, okay, that CRM card, we need to activate it now to have this bit of growth. But if you do that too early, also my biggest fear, and I think I didn't overcome it yet, because also video market is changing fast and especially right now in AI. And Mojo, to be honest, I don't consider it as a success yet because I think that the future of video editing is AI. All the market is disrupt. I love it personally, but everything is yet to be built.

I'm always afraid to wean away from the signal of product market fit. It's also coming back to my own fears I think, and to overcome that a bit sometime because I need also to be a better, I think business person and less sometime of a product guy.

Jacob Eiting:

No, don't listen to him.

David Barnard:

I think Jacob's framing earlier, I really liked. I'm going to steal this from you Jacob, but I forget exactly how you said it, but it was like, you're going to piss off some people with your price. The important thing is to choose who you piss off with your price. I think this applies to building a company, is that you're going to have complexity, choose your complexity, and you want to choose that complexity based on leverage. So right now you recognize that CRM is very complex and is relatively low leverage.

It's going to be hard to squeeze double-digit growth out of CRM and it's really complex. So instead you're choosing the complexity of building into the AI future of video editing. That's a very complex thing to build. You're choosing to do something very complex, but you're doing something complex that's very high leverage, that's going to be the foundation of the business moving forward. And I think that's kind of a great [inaudible 00:42:09].

Jacob Eiting:

It's differentiated too. Do complexity that other people can't.

Francescu Santoni:

For people that didn't read the piece of Paul Graham, How to do Great Work, I strongly encourage you to read that immediately because I think that's the core thing also that focus on the problem that you really are passionate to solve and that of course is-

Jacob Eiting:

Makes up for a lot, right? As we scale too, and I'm always debating with Miguel. Sure, if I spent time on every part of the business, there's something I could improve. But if we let every single part of the business that isn't working exactly how we'd like into our brains, we'll be paralyzed and we won't move forward on the thing that got us here in the first place.

And so I think that's one of the learnings. I don't think that really happens until you're maybe at your guys' scale and above where there's edges of the empire that you can't see anymore as a founder and you have to just be okay with it being how it is. There's the thing, it's like, oh, you can let fires burn, but almost worse is you just don't even know if it's a fire or not. You're like, it could be a fire, it could be fine. I don't really know, right?

Francescu Santoni:

Don't lie to us, Jacob. I think that every other week you get this kind of stress like whoa, this fire is burning. But I think I'm getting more and more okay with those, and distance and this.

But I think the biggest challenge as an app maker, founder or whatever I think is in there and to change yourself, to perceive things differently. Really, I want to put that on phases. At some point for the same level of information you will look at everything is not the way I want and the week after nothing drastically changed and you think, oh, we're doing good.

Jacob Eiting:

Yeah, yeah, yeah. The same inputs, the same inputs. You start to realize how much of it is perception bias, how you're feeling that day. I don't think that's ever stopped. It's a constant oscillation between we're so back, it's so over, over and over and again. I think the only thing that can come with years is just realizing that the troughs are just as transient as the peaks, just ride them out. Try not to quit when you're in a trough and keep going.

I don't think I can stand behind that enough in terms of... And for people at all stages of the journey. If you're at the beginning, if you're at the end or whatever, you're good at something and you can probably build anything, but the best thing you're going to build is the thing you're good at. You maybe don't get to choose that. I didn't get to choose in app purchases, it's the thing I was good at. It's just kind of what happened.

And maybe there's an argument for, oh, I've had a different passion for something else, but at the end of the day, performing and being good at something that you created is probably more satisfying than something you have a passionate about, but it has no legs. It doesn't go anywhere. So anyway, we went from user acquisition to philosophy real fast on this episode of Sub Club.

David Barnard:

You also have to choose which weaknesses to fill in, I think, is that, like you Jacob, you came to RevenueCat and you coded a lot of it and you were very in the weeds. And then at some point you did have to choose to go down the company building path. I've seen you build the skills of people management and company management. You do have to fill in some of the gaps that you don't like doing.

But again, it's like, find people who are good at the things that you're not good at, but then also choose the things you're going to fill in and get better at. Versus you can't be good at everything, so recognize that. And then don't try to be good at everything, but pick the things you want to get better at and then find ways to work around the things you aren't high leverage for to get better at or aren't going to move the business forward or whatever else.

Jacob Eiting:

I would like to share advice, but then I think that would imply I've figured something out which I haven't. I do miss coding though. I don't know if I was ever as that good of a programmer, but I do think I was probably a better programmer than, I'm not going to say it, than I'll ever be as a CEO. But there's a part of me that thinks that. I'm sure Francescu too, you think the same thing, right? I'll never feel as skilled or as capable as I was when I was 24 years old and ripping code out all day.

Francescu Santoni:

Believe it or not, during Christmas I took my phone and I use Replit AI to call the API of Replicate to batch AI, to fine tune some parameters. I was happy just to see those line of codes. I miss that so much.

Jacob Eiting:

I don't know about you, but not only have I stopped doing code, I had to realize I'll never be as good as I was. I've taken too long of a break.

Francescu Santoni:

But we can pretend. It's fine because we are the CEOs.

Jacob Eiting:

I get to live vicariously through everybody else who gets to ship. It's fun to build things that do things. It's fun to build things that do things, and if you can find joy in that, then it almost doesn't matter. You can find joy in just winning and building and making customers happy and showing up and being useful, that's the Arnold Schwarzenegger book, Be Useful. Just being useful is satisfying as a human being. Anyway, this has been the Sub Club, career, advice and life philosophy of the hour, but hopefully it's compelling.

David Barnard:

This is super fun. I think this is a great place to wrap up. Anything else you wanted to share, Francescu as we wrap up?

Francescu Santoni:

First, thank you a lot for this discussion. Not only interesting, but also a great moment. I think that's something that we can celebrate and be grateful to. I think it's very important. And also, maybe a piece of advice to the people creating apps also because it's my duty to do so. On social media, please try to create more content consistently. Not just use Mojo or any other app, but I think one of the secrets is the podcast is a good illustration of that.

Those people building apps, you have so many things to tell, so many stories to tell, and not every one of them, of course can go into podcasts and be lucky as me. So more and more what we see on social media is people sharing their stories by themselves and not just creators, more and more business owner, even, I don't know, restaurant owners, butchers. That will be my piece of advice for people creating project. Find a way to share what you are passionate about and social media is a great way to get your first users sometime. So peace of a sponsored moment.

David Barnard:

Awesome. Well, thanks again for joining us. This was such a fun chat.

Jacob Eiting:

Thank you.

David Barnard:

Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.