How a Single Paywall Experiment Generated $50M – Jeff Morris, Chapter One, Ex-Tinder

David Barnard:

Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors, and builders behind the most successful apps in the world to learn from their successes and failures. Sub Club is brought to you by RevenueCat. Thousands of the world's best apps trust RevenueCat to power in app purchases, manage customers, and grow revenue across iOS, Android, and the web. You can learn more at revenuecat.com. Let's get into the show. Hello, I'm your host, David Barnard. My guest today is Jeff Morris, former VP of product at Tinder. Now, founder and general partner at Chapter One, the early stage venture firm for product obsessed founders. On the podcast, I talked with Jeff about Tinder's $50 million paywall win, why now is such a great time to build apps and how hard paywalls can mislead you about product market fit. Hey, Jeff, thanks so much for joining me on the podcast today.

Jeff Morris:

Yeah, excited to be here.

David Barnard:

So you tweeted a few weeks ago, a banger of a tweet, and immediately afterward I was like, I've got to get Jeff on the podcast. I think I DMed you in the past about coming on the podcast, but we finally made it happen and so I wanted to kick it off with that tweet. So the tweet I think to some people might be a little controversial in 2025.

Jeff Morris:

Love that.

David Barnard:

So I won't steal your thunder. Why don't you just tell me about what you shared in the tweet and why you think those things, and I'm sure I'll have a million follow-up questions.

Jeff Morris:

Yeah. So I guess a bit of background before I go into the tweet is I ran revenue at Tinder for four and a half years through our hyper growth years. And so I spent a lot of time thinking about monetization, subscriptions, and revenue, obviously. And what worked at Tinder and when we really started to turn on monetization didn't happen until years four or five into the product. And so we had built up just a great product that had extreme product market fit. We had scaled the product to 30 to 40 million monthly actives, but we didn't have a huge focus on monetization. I think the playbook, at least until call it AI native applications started to come to market was to really spend time on getting the product right, starting with just the core engagement loops and then making sure that you had great retention to kind of earn the right to build a subscription business or monetize through in app purchases or advertising.

I think there's a lot of external reasons why founders now are pushing monetization earlier. Market is so competitive. And so I think the metrics that you need to raise capital change, and so the revenue slopes are much more extreme, but you're seeing teams now focus on monetization really on day one, even within the first session. There's a part of it which is also like, hey, these businesses are really expensive to operate and the model costs for compute and inference require early stage founders to push monetization earlier in the funnel. And what's really interesting too from that perspective is you're seeing a lot more testing within what models do you offer consumers within subscription tiers? So do you give users access to your best performing model that might cost more than other models or can you convert them with lesser quality models that are cheaper? And so there's this whole new subscription playbook that I think, frankly, subscriptions were... It was always hard to monetize a user base, but the packaging and cadence of a subscription roadmap I think was a bit easier when I was operating in 2015 to 2020.

We now invest in a lot of applications and I meet with the teams and hear their list of challenges or concerns with monetization. And the questions they're asking are just really different from what prior platforms we're thinking about. So whether it's mobile or B2B SaaS or anything bottoms up productivity type of app. So yeah, and then the last comment I would say is just there's a lot of celebrating around revenue today, which I would say maybe is a bit premature because you see either on Twitter or within PitchDecks, the front page is, hey, we got from zero to 10 million in three months or six months or whatever it is.

And then you kind of look at the data room or start to unpack what the cohorts look like, and they're really new cohorts. So it's impressive that founders are reaching those revenue numbers so quickly, but the jury is often out as to whether the vibe route revenue or real revenue. And so I think there's going to be a lot of things that happen in the next year, whether it's the companies coming back to fundraise where the numbers don't look quite as advertised.

David Barnard:

Yeah. And I think that's what really resonated with me about your tweet and kind of this whole idea is that focusing first on engagement and retention and then monetization, it's not always the way to go. But what's beautiful about that is that you don't get a false sense of product market fit. And that's what I do think a lot of apps today that are launching with a hard paywall think they have product market fit because people are paying, but then they bleed customers out the back end and retention is even worse. And so, I mean, I don't think there's a right answer for the entire industry, but I do think more apps probably should be experimenting with freemium models early. Some should be experimenting early if the costs just don't allow you to do that, if you haven't fundraised or whatever, maybe you just can't and maybe you need that revenue upfront.

But for some businesses, they're maybe shooting themselves in the foot over monetizing because if there's people who might get into your product and actually enjoy it and be that long-term retaining cohort, but by monetizing up front, you kind of push them out and never get that chance to win them back, and then you get people who are willing to pay money to try it out, but then don't retain. And so you're getting a lot of mixed signals. Whereas if you can build from freemium from the start with that focus on engagement and retention from the beginning, you're potentially getting better signals of actual product market fit, whereas with annual subscriptions, you might not really understand just how bad your retention is until 12 months later. And there's hints of it. You can look at auto-renew status and stuff like that. But any kind of additional advice or thoughts on who should be trying that freemium model first versus maybe the apps that do work better with that flipped on its head, monetization, engagement, retention, which seems like most apps are kind of doing that today.

Jeff Morris:

It very much depends on the category. If I was building an app today, I'd probably build more premium experiences that don't sacrifice product quality if you were to monetize. So example being like there's a website builder I know well, they're more of an earlier stage company and it's a really popular product within its segment, but the challenge they had with Freemium was just users ... So if you build a website, whether it's on a Level or Bolt, you obviously have a fair amount of debugging that you have to do within any product that you create. And they actually couldn't afford to let their freemium users debug the initial builds. And so if you look at Twitter for that product, people were really frustrated because they would have some idea, they'd prompt the app, and then it would be buggy, and then they'd be pushed into some subscription to make that happen.

There's not a payoff of a successful outcome before you're asking people to open up their credit cards. So I think for something like that, I would probably just say, hey, we want everybody who pays for the product to really have full access to the best working version of our product. And so you're kind of getting people who are trying to monetize before they have that magic moment with their customers, which like at Tinder, you wait for somebody to get a match and to have a conversation and to really believe in the product before you ask them to become a paying subscriber. And so I would almost focus less on total subscription number in terms of users, but really try and provide a great experience for those people who are willing to pay early on. And I think you could still build very successful, call it whale driven products.

These aren't even whales. They're just people who really have a high intent, they have a problem that they really want you to solve rather than being like a GA product that is suboptimal that people complain about on Twitter.

David Barnard:

Yeah. And a really good example of this, people listening to this podcast probably don't, not many listeners also listen to Ben Thompson, but he's been talking a lot about how he thinks ChatGPT should monetize more via ads and probably should have from the beginning. And one of the points he's made that I think is really insightful is that most people who use ChatGPT have never gotten to experience thinking, pro or deep research because those aren't available on the free tier. And so they don't even know what ChatGPT is even really capable of because they've never paid. And so it's kind of to your point, there is a little bit of a, not chicken before the egg, but it's like you want your users to actually get the best possible experience to really understand what the product is, but that's a tension because how do you give that away for free or...

I mean, free trials kind of work, but then again, not everybody wants to start a free trial and that kind of thing, but how do you get those users that best experience of the product to understand what it's even capable of so that they know what they're paying for before they pay? And maybe ChatGPT is at a scale where it's okay and the revenue's grown tremendously, but it's a tough balance. I mean, what are your thoughts on how to balance that, like putting good stuff behind the paywall, but still providing the best possible experience?

Jeff Morris:

Yeah, I think that's a really hard question. I think this is a version of the world that favors the founder or the company that can just raise a ton of capital and has... We saw this within ride-sharing and kind of think of it as being a similar thing where if you were Uber or Lyft, you could subsidize the early costs, then become more efficient over time. And within AI applications, I think the same could be true where you're seeing startups really struggle to offer a great product because of the cost requirements as opposed to a founder who can raise a lot more. So I can think of a recent example where a founder raised ... I think they raised a $50 million series A from a big firm and they have an identical product to a startup I know, and they're able to just offer a better experience because they can either subsidize a premium product or be more generous with a subscription tier.

Within classic subscription products, if you're not building an AI, there's a whole different playbook. So I think it's probably good to look at the world between call it AI native compute intensive companies versus the rest if you're building a Tinder or a Headspace or something similar, it's kind of like the classic playbook and you don't have to worry as much about these new questions that I think founders are trying to figure out.

David Barnard:

Yeah, it is tough when things are expensive. And I'm curious your thoughts then on raising money as an app in 2025, because as you said, if you can raise money and offer an even better free experience, build up the usage, build up the engagement, build up the product retention, and then monetize down the road, for some companies that is the optimal path. But raising money in 2025, unless you're a hot AI startup is challenging. So what are your thoughts on what sorts of apps can and should raise in 2025 to run that playbook versus a lot of the folks listening are the more bootstrapped and do have to make these really tough trade-off decisions. I mean, my weather app that I work on on the side, I have really high data costs. To get good weather data, it's very expensive, especially animating the maps and stuff like that.

So I personally face this challenge and don't... I have a hard paywall right now in my app, specifically for the cost reasons similar to a lot of these AI native apps, but yeah, how do you avoid that in 2025? Who can raise money and who should raise money to start with that kind of more freemium experience?

Jeff Morris:

Yeah. I think the venture market is treating non-AI native apps as almost like a non-investible category, which I think is pretty crazy because we all know that mobile usage and adoption is growing year over year. I think the knock on mobile apps is just people... There's a perception that people aren't downloading new apps with the same frequency as they did maybe in the, I don't know, the 2005 to 2020 period. I think now is a great time to build a hyper premium mobile experience for every niche imaginable. The cost to build an application from an engineering perspective has gone down a lot and will continue to go down. And so probably my favorite example, which most of your listeners maybe know of is like Flighty I think has done an amazing job and their founder's been building that for probably almost 10 years at this point.

But if you travel a lot and you are a business traveler, Flighty is by far the best travel app, right? That does have a hard paywall. I'm willing to pay 40 bucks a year, expense it to your business or whatever it is because it's such a high utility product. If you're building something that's more social or less clear on what problem it's solving, then you might have a harder time asking the user to do that. If you can't raise venture dollars, then you should be confident you're building a product that people will pay for and you should ask people to pay for it and see what the response is. And I'm a big fan of monetizing early in that sense.

David Barnard:

Yeah. And Flighty is an interesting example. It may have been that you used it at a time when it was a more of a hard paywall, but he was actually recently on the Launched podcast, which is kind of a sister podcast to this and they have been experimenting... And he was actually on Ben Thompson's podcast talking about this and he has experimented his way. And maybe this is one of those kind of examples too of like, over time you do kind of find that right fit, but he has a really interesting model where now the first flight is completely free with all the pro features. And then if I remember correctly, some premium features then get locked after the first flight. And so he had to really experiment into this hybrid thing. And so maybe that goes to our point, there's not like a set rule.

You need to experiment and be willing to experiment and not just follow the patterns, but figure out what's right for your app, is that he experimented his way into this weird kind of freemium where he does-

Jeff Morris:

Yeah. That's almost like a trial to me.

David Barnard:

Yeah. Yeah, yeah.

Jeff Morris:

Freemium is like, in my mind, the definitions could be entirely different, it's like you can use the app in perpetuity, but there's just different value that the developer gives you for that experience. It's actually very possible that I did get that first flight free, but because the kind of free version was so limited it just pushed me right into the subscription.

David Barnard:

Yeah. That may be a good example for high cost apps though. Maybe that's the playbook to follow, is to figure out a way to give a taste of that better experience, even maybe without a free trial, but actually like some kind of usage limited, time limited. Maybe that's something ChatGPT has or should experiment with is giving one deep research a month so people can experience that. I mean, deep research is freaking incredible. I mean, the stuff I throw in there and the responses I get back, I mean, I use it almost on a daily basis. Things that I would otherwise spend an hour or two researching, I throw into deep research and get detailed notes and links. And I think a lot of people just don't even realize how good it is and it hallucinates way less because of how much it thinks. So maybe this is like a new playbook people should start experimenting with is finding ways to give one or two hints at that in the freemium experience to kind of offset the cost of it while still kind of giving that better experience.

Jeff Morris:

I think the truth is most of the really fast-growing AI products are putting out so many fires that monetization, it's not as sophisticated as you think it is within those orgs yet. And so we have a portfolio company, I won't say the name, but they hit 50 million in ARR within, we'll call it a year with a prosumer product. And I called the CEO and I was like, "Hey, this is really interesting. What are we doing on paywall optimizations and pricing?" And I started to put my revenue hat on and he was like, "What are you talking about?" And I was like, holy crap, you hit 50 million without any experience. I'm sure if you gave myself or anyone who loves revenue just the keys to the application for a couple sprints, we could probably double your revenue or do something that would really shock the team. And so it kind of reminded me that the sophistication we got to at Tinder took us a long time.

When we really built out the revenue team, it was 2016, about a year into my time at Tinder. And it was just myself and call it five or six engineers. You had three iOS engineers and three Android engineers. And then leaving the company, I think I had 40 plus engineers who were working on all parts of the revenue roadmap. And I think that's kind of where a lot of these AI companies are in their product journey. So it's almost, as we say that, a lot of them are trying to monetize really early and then they kind of do this set it and forget it thing where they're not really refining that part of their product. So I think it can lead to, again, even more false positives or metrics that might not prove to be durable over time.

David Barnard:

Well, without revealing too much about that startup, can you share what your first two experiments would be? I mean, did you go through the product yourself and say, hey, here are the top two I would run?"

Jeff Morris:

Yeah, I think it was mainly around packaging. And so they had a single subscription tier and at least I found my biggest unlock at Tinder was when I really started to think of the subscription tiers in terms of packages, all the way from the intra-subscriber who's probably younger and has less income and maybe isn't in the US to the largest whale you can imagine, someone who can spend like $50,000 a year on a subscription product, which we had at Tinder, but you're building for such different customers, right? But that just takes time to figure out because you're not only building new bundles, you're also building new features. And so you're trying to basically build very different experiences for users with different goals and expectations. You could do that forever. That's why revenue teams do what they do every day. And the other one that they hadn't done was just localization.

So I think at Tinder at least, we had a really, really complicated pricing grid that was based on a ton of different factors, the most obvious being geography. So knowing our fastest growing markets were LATAM and India, but those markets had a very different willingness to pay to a North America or UK or something similar.

David Barnard:

I did want to dig into pricing and packaging. So let's just move on to that topic. In your work at Tinder, because we had Ravi Meta on the podcast... So what's funny is he got to build that really cool chart with the higher price tier, the mid-price tier, the low price tier, and then the consumable stacked on top and how it perfectly fits the demand curve. But you were in the trenches building that from the ground up. He came along, he did help with that, but it's like he came along and a lot of that had been built. So I did want to dig into a little bit of how that came about. What were the experiments? What were the conversations that led to the three-tier system and the consumables on top of that? What was that process like to get there? And I guess maybe just frame it in a way that listeners today can be thinking through like, how do I get to that kind of multi-product? How do I better package my offerings to fit that demand curve and the need of the users?

Jeff Morris:

I came in and was basically given a spreadsheet which had some really early versions of what our pricing was like for a single subscription tier. So it was Tinder Plus at the time. Nobody was price testing. That was just kind of what... There was a data scientist or scientist who would run really basic initial tests and that's where they landed and it was kind of like set it and forget it. Where we really started to focus on pricing was as we started to saturate the US market and really started to focus on markets like India, as I mentioned, and LATAM which were growing, but weren't necessarily the places where we were monetizing really well. And so I'd say when should you start focusing on pricing? I would say really focus on your core markets.

And for a US app developer, generally speaking, unless you're building an international specific app, that's going to be the North America audience. When we start to expand the tiers, generally speaking, the product leads you to premium features in terms of you start to see what people are asking for and what they want you to build. And then the question as a product person is always, is that something we should monetize or give away for free? In the case of Tinder, which was specific to dating as a category, there was a certain element of, hey, we're building a network and ecosystem where if we give away everything for free, the application simply won't function. The kind of gameplay of the application starts to break down. And so we had to think a lot about the second order impact of any feature and what percentage of the population do you actually want to give that away to?

Because if you give everyone... I'll give a really obvious example. We put a paywall on the number of swipes that you could do on a daily basis because we found there were people who were just swiping their way through literally their entire city in a very small amount of sessions or you had things like auto swipers. And so we put up that paywall also to create a better ecosystem, but it also turned out to be a great thing for monetization. So I think a lot of it is in terms of like, you should have one or two things that you charge for early on and then really following the user and following your power users in terms of where they lead you for what they want you to build. And we always thought of these things as being superpowers that you could give the user. And obviously not everybody can have the full access to those superpowers because then those features will become less valuable to the subscriber base.

David Barnard:

Yeah, that's fascinating. Yeah. Thinking of it as superpowers, what superpowers do I want to give my users and kind of following the product demand into building those features. Did you all ever experiment during those years where you were like hardcore optimizing the revenue of pulling features in and out? So would you put something in the free tier and then, oh, wait, we really should have made that paid? How did you run those sorts of experiments? Because those are hard. And once somebody's gotten something for free, then putting it behind the paywall is weird. And then, oh, I paid for that. Why is that now free? How did you run those kind of experiments?

Jeff Morris:

Yeah, I think we might've been a bit different from normal companies, but the revenue roadmap and our products were very much built in a different part of the org. We were on the product team, but when we developed a revenue feature, it was kind of thought of as being a part of the revenue product line that we... We actually didn't pull things in and out very often. There were some cases where we thought we could charge for something and then we would look at the conversion data on that paywall and it just wasn't moving the needle and so we would make it free. But we never took something that was free and made it a paid feature as far as I remember.

And I think in most cases, people overthink the user impact of a lot of these decisions where if you make that decision to go free to pay, you can always reverse that decision. Or maybe you have these moments of where the users are like, hey, I hate that you made this decision. But if you're solving a big enough problem, they're going to stick with your product and so you just need to do so in a way that feels transparent and fair. We always overthought that things we were doing would have a bigger negative feedback than whether it's pricing or anything else. And we just always found that people were willing to stick with us as long as we gave them a core product that still provided value.

David Barnard:

Yeah. And in our notes that we're working on ahead of the podcast, you wrote something about that I thought was really great. It was, "We spent too much time building Excel features instead of testing ideas." And I assume that's what you meant, you overthink things and run the models and price everything out and make assumptions and overthink instead of just getting out there and testing it. Is that what you were talking about?

Jeff Morris:

So we were a private company and then we became a public company and Tinder itself was 90% of the revenue of that public company. And so it was actually a ton of pressure on us to perform every single quarter. So you basically had 12 weeks where you had to deliver some revenue growth. And if you didn't do that, literally the stock price would go down and everyone was mad. I think the Excel version of this was we just had more and more finance team members who wanted to help us forecast the impact of what we were doing so then they could go to the next earnings call and give what would be a reliable forecast. But that created, I think, a bit of Excel culture where the product team was forced to spend a lot of time speculating on things that were hard to predict.

Or we'd have things that would happen in the quarter that were small parts of our roadmaps going into the quarter that would work in a really big way that would make up for any kind of inconsistent forecasting. So that was the biggest thing was we kind of... I think as your company gets bigger, the org gets bigger, you become a public company, the stakes get higher and so you have to do things with more precision and in some ways that can slow you down for sure.

David Barnard:

Yeah, that's fascinating. We haven't had too many publicly traded companies on the podcast yet, something I'm working on, I'm actually interviewing the chief product officer at Duolingo is going to be an upcoming episode, so that'll be fun. But yeah, imagine the pressure quarter after quarter is just a whole different ballgame than most people are used to. I did want to step back and you kind of dropped a little something in there that I thought was really interesting is that because you were on the revenue team and the features were specifically designed for revenue, you said you would test a paywall and if those paywalls wouldn't convert, then you might make the feature free. So you were doing testing of paid and then switching some of those to free. What would that look like? It would be like the paywall would very specifically highlight this new feature you built, and then if the conversion on those paywalls wasn't high, then you were assuming that that particular feature wasn't valuable enough to drive enough incremental revenue that then maybe it should just be pushed back into free. So that's how you were testing these things?

Jeff Morris:

Yeah. Pretty much every subscription feature had a paywall entry point that we had a dashboard we'd wake up to every day and we could see the number of, obviously the number of clicks it got and then look at the conversion rate and then map that to incremental revenue for the subscription product. And so you could see really quickly which products were getting the most attention. And that could have been because the paywall was positioned... We always thought of it as being like real estate. And so you have a small canvas and a small amount of real estate. So maybe the problem is you're not showing the paywall in an aggressive enough way, or it could simply be that people are tapping on the feature and deciding that it's not valuable enough for them to pay for.

I think what we quickly learned is it's like any portfolio of companies or products. There's a power law to subscription features where one or two features are probably going to drive the majority of your new subscriptions. And everything else is nice to have, but it's incremental. That could change. I'm seeing a lot more creativity with multi-product revenue lines. Robinhood is a great example. It's not all subscription revenue, but I think they have 10 products that are independently generating north of $100 million each. And so I look at that. But at least when we were thinking about Tinder, it was a lot simpler. We had two to three power features that people really paid for, and then we would try and design more features on top of those over time or new experiments, but it was pretty consistent.

David Barnard:

Yeah. One particular experiment that you mentioned was a single experiment that generated $50 million in revenue. Tell me about that one. I mean, at Tinder's scale, maybe that wasn't... And maybe you can fill in the details there of how big the scale was, but tell me about that one experiment that generated $50 million.

Jeff Morris:

Yeah. So probably in 2018, it was actually a really fortunate surprise, tested a toggle on the top of the application where you could enter a new subscription tier from the top nav bar. And obviously talking about real estate, that was a really premium piece of real estate within the product and people would tap on it. It was almost like we almost discovered new real estate because the design team actually didn't want us to have that top nav, which is always a tension by the way. You have to have a beautiful product, but you also have to be creative in how you monetize. And so really we always had a roadmap as small, medium, large Excel experiments like everybody else, and I would probably say that was a small to medium experiment. It was kind of a throwaway AB test. And you wake up and you look at the dashboard I was talking about and you're like, wow, crap, this thing is really working. And those moments are really fun.

You get some of that when you're working at a smaller company. I had the benefit and fully aware of how lucky I was to be working at scale with 50 million monthly actives and a product that people were willing to pay for. So if you tried putting a top nav into a meditation app, I'm not sure if it would convert as high as what we were doing. But the point is you should constantly be thinking about where users can access your premium features, where the paywalls are placed. And often I find people are just not thinking creatively enough. Maybe you have some nav buried in your nav that people just can't access, and it always surprises me. I think revenue teams should be on the whole a bit more aggressive in terms of pricing and entry points because again, if your product's great, people are willing to go along for the ride.

David Barnard:

You brought up something in there that I wanted to talk about next anyway. And it is the tension between creating a quality product and caring about the users and the mission and things like that, but then also monetizing. And so it sounds like that $50 million paywall was a tension in the company of the designers not wanting the top nav pitch. But how do you balance those things to keep the product quality up while still monetizing as effectively as you can? And then in your case, doing it while having a quarterly pressure every 12 weeks to deliver.

Jeff Morris:

I think there was a great culture within our design team. We had a VP of design who understood that we were trying to design and build a beautiful product, but we also were trying to build a large business in the process. And so how we thought about it a lot was just taking all the interactions and paywalls and putting as much love into those designs as we would any other product feature. And so I remember in 2017, we added an animation to one of our paywalls. It was like this gold shimmer. It probably took a couple days of engineering time, but people saw them and it was a well-designed paywall, which I know is not something that design teams want to focus on, but we were like, if we're going to show a paywall, we want that to live up to the product, the core experience.

And so we tended to over-design the features that other people would spend less time on. And I think that at least showed the users that we cared about the experience. I see a lot of paywalls that look like they were designed by a PM, and I just don't think that's how you maintain product quality. The other thing, and I'll say I've seen it more from a lot of products is you do start to get into the over-optimization mode and you start to grind users and the product itself starts to feel almost like spammy where you have too many paywalls. And I think that just comes with a mature product that doesn't have enough room to kind of grow. And when you're a public company, I think you can start to over-monetize too. There's a trade-off. I was lucky in that role. I think I departed the company at the perfect time because we were still growing a lot and it wasn't kind of a more mature product. I don't think I would've been as good in the current years at doing that job.

David Barnard:

Yeah, it does. It gets harder and harder as you mature, as the user base matures, as competition matures, as the industry matures around you, it does get harder. I did want to get to some of your more recent contrarian takes. And one of them then is mobile isn't dead. And we've been hearing this since, I don't know, 2010, mobile is dead, mobile is dead, but you seem to think it's a great place to build today in 2025. Why do you think that?

Jeff Morris:

Every kind of platform has this golden age where there's so much opportunity and white space within new categories that you can build. And consumers almost pull the product out of you, right? And we saw that with mobile. I remember, I don't know, in 2015, it's like you see a cool new product, an app, and you're always willing to go through the process of downloading, installing the app. I think people have become a bit jaded on the consumer side as to try new products. And a lot of the big categories have become obviously very mature products that are hard to disrupt. And so from I guess an app developer perspective, I think there's been, on the venture back startup side, less founders building pure play mobile products over the past two to three years. Where I think there's a ton of opportunities, we have this new platform shift, which is AI. And so you can kind of reimagine new products.

I haven't seen personally, and this is why I'm still bullish, a ton of net new, truly AI native products that are mobile first come to market. And I think that's just because we're now getting out of the infrastructure build out to the application there. And the first part of the application there was a lot of vertical AI, mostly web-based products that obviously are doing well. And now I think we're finally entering the part of the market where founders will start to... There's enough infrastructure, there's enough experimentation where we'll start to see really cool either consumer products or mobile products for every category. So it could be things like commerce, travel, social. You can kind of canvas the app store, the top categories, and ask yourself, okay, what if I redesign this product? What part of it could be net new if I did it in more of an AI native way?

And so I think that's pretty cool. And then I guess the last point is that we haven't gone out of this mobile design space where it's... Or sorry, the AI design space where it's like prompt to action. And so I think there's a lot of opportunity within the new wave of AI products, especially as we see better memory and context to reinvent a lot of mobile products that feel more personalized and feel more predictive of what we want to do as users.

David Barnard:

And I'll add to that too. I mean, five billion people a day are on their mobile phones around the world and they're more open than ever to pay for software. So it does feel like in addition to this platform opportunity where AI is coming in and allowing you to rethink things, you're able to rethink things in a very dynamic market. Sure, it's competitive, sure it's hard, but when you succeed, it can succeed really big. And then you said very early in the podcast that there is an opportunity, and I totally agree with this, for apps now to be built in all these niches that maybe didn't make sense during the kind of "golden age of apps" a decade ago or whenever it was. So yeah, I mean, I share your being really bullish on the future and there's just so much opportunity in the space.

What are your thoughts though on how AI might subsume apps and those opportunities? Flighty an example. At what point does ChatGPT have your calendar know when you're flying? Are they going to build this kind of stuff? What categories do you think are kind of more at risk of being subsumed by AI? And then what areas do you think are safer to build in maybe?

Jeff Morris:

Yeah, I think about it a lot. There's this belief that maybe in a future where AGI exists or advanced AI capabilities exist, that there's not going to be any interfaces. And I just think people love to be entertained. They like to be told what to do when they're using products. And they like using products when people have strong opinions. And so if you are a designer or builder who has a point of view on what the product should look like and feel like, I fully believe that people still want to be shown a beautiful interface and a really efficient workflow and that we're not just going to have agents doing everything for us. I also think we're a very visual species when we're shopping or planning trips, there's some things that you don't want to do in a interface that looks like a ID or developer environment.

Again, back to the entertainment idea, a part of this too is just like we love to have a sense of control and to kind of go on that journey whether you're buying a new pair of shoes or you're planning a summer trip. I also just think people might have more free time. And so again, what do you do when you have free time? You're probably going to be using your phone a lot more and doing things that are a lot more entertainment focused. And so I'm not at all worried about the end of apps. I think the bar for design and product will get higher and higher, and that's a great thing because you're going to have a lot of this AI driven product design, and then you're going to have real professional design that rises above. And there's a really clear zeitgeist right now, which is like the anti-slop zeitgeist, and people wanting things, to use things, whether it's in the physical world or digital world that are high quality and thoughtful and well-designed.

So I think if anything, doubling down on product and design and user experience will separate people from the general purpose super apps. And sure, I could track my travel on ChatGPT. I could probably already do that, but Flighty is just such a compelling product that I'll stick with that.

David Barnard:

Relatedly, one of your other kind of contrarian takes is that there are more apps and companies than there are great ideas and that maybe more people should be working together instead of on separate apps. And maybe that's to this point. It's like because the bar is raised, instead of being a solo founder just hacking it out by yourself, finding other top people to build with might help you achieve that level of quality.

Jeff Morris:

Yeah. I read this quote, it was like, it's easier to raise money for a startup than to get an engineering job at a top company these days. So there's a lot of company creation and there's a dispersion of talent that I didn't have at least early in my career. I remember the days when the Snapchat team was so talent rich, top to bottom, it was almost like an all star team of mobile consumer talent. And I think now the incentive to start a company and to do things on your own has created a lot more companies than we need to exist. And I'm hopeful that talent consolidates and we have really great smaller teams working together. You see a lot of the big, like the incumbents, the Facebooks, even OpenAI have really great talent across the board and they're just able to pay a lot more money obviously for that talent.

I'm hopeful that we have these groups of younger talented entrepreneurs who agree like, hey, it's better. If we're going at a problem and maybe you have a competitor going after the same problem, maybe you should team up and do it together.

David Barnard:

Yeah, I think that's great advice. And it's tough because I see so many developers get to 2K in MRR and 5K in MRR. And I do wonder if a group of two or three of them or somebody more product oriented, somebody more design oriented, somebody who's just like the hardcore developer, if as a team they could kind of break through that wall instead of everybody thinking they need to just do everything and be everything. So yeah, maybe that's a good challenge to folks listening to the podcast. If your side project hasn't taken off, maybe you need to collaborate more and find some talent to work with instead of thinking you have to do it all.

Jeff Morris:

I mean, definitely I see these apps and these stories of people getting to a couple million subscription revenue as like a one or two person team, and it's really cool that that's a possibility. And so I think about that a lot just personally. If I wasn't a VC, could I pull that off and what would that be like? I think for me personally, I want to do things at scale, and so that wouldn't kind of satisfy me, but I can see how that would be for a lot of people, like a really great career option. It just depends on the personality and what you want to do with your career.

David Barnard:

Well, I think now's a good time to kick off the lightning round. I call it the lightning round, but we can have a discussion around these. It's kind of a loose thing I've started putting here at the end of the podcast. The questions are more focused on operators. So I'll ask this in a different way for you, but the question is generally, what's your biggest win of the year? So for you, maybe it's a portfolio company, a biggest win a portfolio company had, or just something you think people could learn from that you saw in the past year?

Jeff Morris:

Yeah, I think for us on the investment side, we were pre-seed investors in Superbase, which I think the company's done an incredible job of really leaning into what's happening in AI and becoming the database of record for most major website builders. They've done so by being extremely developer... The speed at which they ship features, they ship a new feature every single day. And so I think they set the bar for what product velocity should look like and just appears like they won't slow down. Personally, I think the thing I've loved doing is I've gone back to even as a VC designing new products. And so we have a incubation, which we'll be able to share next year, which has been a ton of fun to work on because it's been back in the Figma files and getting really deep in product design, which as an investor helps me stay sharp.

I don't know how I could do this job and not still build things and create things. And then we have another product that we're releasing in the next couple of weeks, which is more like a venture scale product, but it's just something that we're having a lot of fun building. So I think the lesson for me is all my energy that I get is through building things and building products and investing, but I really need to build things to be happy as an investor too.

David Barnard:

That's fun. And it's interesting you brought up Superbase. I do think this podcast is very focused on building consumer subscription businesses, but some folks in our audience might think about building some B2B. What things are you frustrated with in the experience or what holes are there? What gaps are there in the experience of consumer developers and where could you fill? And Superbase, it's crazy how big they've grown and how quickly they've grown by filling one of those needs for the market that already seems saturated. So it's pretty fascinating.

Jeff Morris:

Yeah. I think a lot about just like day one problems that every developer faces. And so authentication, picking a database, we were early investors in Mercury, which is a bank for startups, like these day one decisions, and there's always going to be new pain points to solve there. And then as it relates to the developer experience, as you're building your subscription products, I'm sure there's a million pain points that you have every single day. And I found software when I was operating to be highly, highly inefficient from design through product work to engineering deployment, post-deployment, there's so many bottlenecks. And luckily, I think we're in a moment in time where all that's being kind of remixed in terms of the functions and the workflows. And so I think there's a lot of opportunity to, we call it the software factory, but if you think about the engineering cycle and the production cycle of software, to really lean into what is changing today and build new either B2B tooling or infrastructure for those new problems.

David Barnard:

Yeah. And in revenue cap, I mean, we're trying to solve a lot of those pain points and increasingly building out new products and stuff, but there's still just so much white space in the industry. And to our point earlier about consumer, there's also space to think what's the AI native version of solving this pain point? What's the AI native version of solving authentication or other problems like Superbase did for databases? The next question is, what was the biggest fail of the year or portfolio company that you saw run a... Maybe one of the big fails was not doing pricing experiment or packaging experiment for that one portfolio company, but any other big fails that you think folks could learn from?

Jeff Morris:

Biggest failure has always come back to product velocity. And I think there's a ton of pressure right now, especially within the venture backed startup world to ship things that are of a very high quality on day one. And so I've heard this idea kind of like iterating your way to product market fit and that whole exercise is almost like we've kind of gone back to a world where you are shipping extra large day one products. And so I see some founders who are stuck in their own heads or organizations as to when they should shift their product and almost waiting too long. And the markets are moving so quickly that if you wait too long today, someone else is going to come in and take that market. For me, I think we have to get back to a lot more experimentation at the application layer and be willing to make mistakes and not having to have day one perfection.

David Barnard:

Last question, growth would be easier if...

Jeff Morris:

I think growth would always be easier if you had better day one data and data systems in place. Even up until I left Tinder, a lot of the business intelligence questions and data questions were still very hard to pull. Obviously, a lot of us knew how to use SQL and could run queries, but I think a lot of the... Actually, I've thought a lot about this before, this moment we're in terms of can you use AI to basically recreate things that revenue teams can do really well in a more efficient way? So things like understanding your funnel better, really knowing what, [inaudible 00:52:12] you said like pricing, localization, all these things that were actually really hard for us to solve for I think are easier today. And so growth would be, I think, a lot easier if we really lean into this AI moment and try to rethink the way we operate revenue teams as an industry.

David Barnard:

Such a great place to wrap up. Anything else you wanted to share as we wrap up?

Jeff Morris:

Yeah. If you're building a company that's venture backed, would love to hear more. I'm JMJ on Twitter, so you can also follow me. I'm pretty active online. I want to share as much as I can about what we're doing, so follow me there. And last place you can find me is Substack. So I run a publication called The New Internet, which I spend a lot of time on as well.

David Barnard:

Awesome. We'll link to both of those in the show notes, but thanks so much for your time. This was a really fun conversation.

Jeff Morris:

Thanks, David.

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.