How Simply Finally Cracked Facebook Ads with Web Funnels – Yoav Sharon, Simply

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, and with me today, RevenueCat CEO, Jacob Eiting. Our guest today is Yoav Sharon, head of growth and product at Simply.

Simply is the world's leading creativity companion for the home. On the podcast, we talk with Yoav about reaching brand new audiences through web funnels, how they created their own Big Mac index for global pricing and why monthly plans can beat annual on LTV. Hey, Yoav, thanks so much for joining us on the podcast today.

Yoav Sharon:

Thank you for having me. I'm happy to be here. Looking forward to chat.

David Barnard:

I thought it'd be helpful to get a quick overview. Simply does a lot and to have context for the rest of the conversation, it'd be great to just hear a little bit about what y'all do.

Yoav Sharon:

Sounds good. Maybe I'll start with a very easy question. Does any of you play any musical instrument?

Jacob Eiting:

Oh, yeah. Oh, yeah. I can't see it in the shot here, but my guitar's hanging on the wall. I mean, I call it it's my aspirational guitar because it gets looked at a lot more than it gets played, but it's there.

David Barnard:

Oh, I took classical piano lessons growing up.

Jacob Eiting:

Yeah, David's actually more of a musician I think than me, but-

David Barnard:

Used to be. Used to be more of a musician.

Jacob Eiting:

It used to be. That's also accurate for me. Yeah, yeah, yeah.

Yoav Sharon:

So, it's actually so familiar what you're saying and inspirational is a word. Basically, Simply is about helping kids and adults around the world learn creative hobbies. Learn how to play piano, how to play the guitar, how to gain confidence in singing, how to express themselves through drawing. And all of these, and again, like you're saying, inspirational and you said you pick it up David as a kid, it's always some kind of a dream. It's quite hard to learn this new skill. So, what Simply is doing is we're breaking up to small chunks each of the pedagogical way and we help people through all the challenges, and we really make dreams come true in this aspect.

We help people across the world learn their musical instrument, what they've been dreaming on since kids. And it's really exciting, exciting things to do.

Jacob Eiting:

I love it. When I learned guitar, initially I was like 12 and I did it with VS... I can't remember the name of the software, but some piece of Boxed software I got from Staples.

Yoav Sharon:

Oh, wow.

David Barnard:

Because there was no YouTube, Jacob.

Jacob Eiting:

Yeah, there was no App Store. I drove to the town over and I probably paid $45 for a box of software that taught me to play guitar. So, I might be one of the early digital musical natives, right? But I've always been sold on the concept since then because I actually did learn guitar sitting at my desktop PC with that suite of software. Yeah, that's crazy.

Yoav Sharon:

It's fantastic. Today basically, we're able to bring a coach almost at a coach level next to you to be with you as you learn all these skills and all these hobbies. We'll get right into all of these, but this is in big we have in general, I just mentioned we have Simply Piano, our most mature app. We have Simply Guitar and Simply Sing and Simply Draw was the recent app that joined. Across all of them, we are active with million users and learners around the world.

Jacob Eiting:

Wow.

Yoav Sharon:

11 languages, 180 countries. So, we're quite at the interesting scale at this point.

David Barnard:

That's actually where I did want to start is the multi-app portfolio. So, I actually had the cheap product officer from Duolingo on the podcast earlier this year and he talked about how they tried to launch multiple learning apps and ended up pulling it back in. I've heard from a lot of other people who struggled to do the portfolio approach.

Jacob Eiting:

Oh, David, do you know the Elevate story before we did Elevate?

David Barnard:

No.

Jacob Eiting:

It was originally this company called MindSnacks and we had like 10 different language distinguish, it was a nightmare. I mean, it was hard technically, and just everything, it's everything hard.

David Barnard:

And promotion, like having to get people to 10 different apps and you think, you think like, oh, they download the main app and then we push them to the other apps, but that doesn't always work.

Jacob Eiting:

Economies of scale are a lot rarer than people think, right?

Yoav Sharon:

Not only this, basically when you have your first mature app and it's already at scale, getting to the second app is more than finding the product market fit. It's basically proving that you have a repeatable way to create value. And what we do at Simply we learn, we always listen to our users and we saw that our audience is not single users and this is it. In many cases, they are part of a household and in that household there are many passions for creative hobbies. People want to play the guitar, people want to sing, to cook, to draw.

And we always start by really understanding what the pains are, what the real needs, what limits people like for you Jacob Black, it was kind of hard to learn from a box, from a non-interactive way to try to pick up at the age of 12. It doesn't know anything about you at that point. So, trying to understand what limits people from learning a certain hobby and then forming a multidisciplinary team, we call them pods that basically tries to build a product offering and nail down that value proposition that actually meets that needs. And we use our playbooks that we try...

Of course, we have those playbooks, the early growth playbooks and the early customer discovery playbooks and it's not always the same like you mentioned, but we apply the same principles across all of our apps. And first principle thinking and we'll talk about other principles in a second, but it's definitely a hard task. It's not reveal to translate your success. And today we have already, I mentioned earlier all the apps, but Simply Piano is a market leader like 80% amongst all piano learning apps. We are already in that market. Simply Sing and Simply Guitar are growing to become market leaders.

And actually Simply Draw that only was the recent launch, it grew six weeks last year in revenue and already at an interesting scale so it's not growing slow. I think at this point, it's really exciting that we feel that we have certain playbooks that we can apply for finding product market fit with other. Not everything is success. We don't always succeed, but we do have some ways that allow us to repeat the-

Jacob Eiting:

You kind of know what works. You've also defined a little bit your product or your market, right? You have the set of users in there, you're talking about adjacent users. We think about this with features with RevenueCat. Your first product market fit is hard because you're just like shooting in the dark, but then it's like once you have those users, you mentioned just talk to them and you can kind of figure out. And if it's not that user, it's like a user that's almost exactly the same but slightly different that you just missed. It's like, "Okay, how do I get that?" And then of course, there's like the resource engine, right?

It's like the first successful PMF tends to produce excess capital flow, revenue, whatever you need to invest in the next thing, right?

David Barnard:

Yeah. I want to dig into the playbooks, but I was curious first, was it always the plan to do a portfolio of apps or did you try to put ... I think Simply Piano was first and Simply Guitar was second. Did you try and just like have a tab bar with like piano or a menu selection with piano and guitar? Or did you always plan on doing a portfolio?

Yoav Sharon:

It was not always the plan. Early on, we did understand that we are serving quite many needs and it wasn't that trivial to decide are we doing it under one umbrella or are we doing it in separate apps? Each one has its pros and cons. There is no right way to go about it.

David Barnard:

And I'd love to dig deep into that because this is a real challenge for apps because you have an app like Calm where they make a name for themselves in meditation and it wasn't necessarily obvious that sleep stories should go inside the Calm app. Does that confuse the experience? Does it overload users? How do you onboard to two different use cases? It creates complexity in a single app. And one of the things you generally try and do in an app is keep it as simple and straightforward as you can. So, let's dig deep into that decision making process of like why create the second app and any struggles you had trying to fit it in the first app.

Yoav Sharon:

So, everything for us always starts and ends with what makes sense for the users, what brings the value to the users. And as you mentioned, we deeply understand the job to be done, what they're looking to achieve. And you're right, Jacob, that we're looking at adjacent users, but still when you have a household, when you have parents and kids and siblings and each one at different intent levels, different schedule, different availabilities, it's different mindset altogether. So, when we build new separate apps, for us we start with separate apps. It helps us not pull weight on any product. We talk about this, how we work. We try to work very fast and very independent with each product.

And one of the challenges that we discovered is on the user acquisition front, on the growth front, where when you have multiple apps platform, you want to make sure that you don't always just optimize performance for each of the apps. You want to make sure that those apps don't compete with each other. You really try to understand where your audience overlap, where they don't overlap and eventually it all goes back to the classic growth questions. Okay, who are our users? Where are they? How can we reach them with which messaging? Basically tests to ensure that we don't cannibalize each other and we don't compete. I'll tell you even I think mid last year we've had a very interesting test.

I think it deserves its own episode. I will not go into details too much, but in essence, what we've done there, we tested for the interaction between the apps and across platforms, iOS and Android. And basically, we have app campaigns when on the go side and we have web to app campaigns. And what we did, we turned off app campaigns on a certain geo. We turned off web campaigns on another geo and we started seeing what happens to the organic traffic, what happens to the interactions between apps, between platforms and the same app and we're able to crystallize any cannibalization that happened or did not happen.

So, we're doing this, we're measuring this way to make sure that we don't compete. But I'll tell you, the bottom line is when you have a platform with multiple apps, it's never about perfect attribution.

Jacob Eiting:

World's so chaotic, right? There's just so many things that can happen, right?

Yoav Sharon:

It's so chaotic, but you do need enough truth in your CAC modeling, in your customer acquisition cost modeling to understand where to put your next dollar. This is the essence. So, it's not about perfect attribution, but it's about enough understanding of where you want to put your next dollar when you spend.

David Barnard:

When you launched Simply Guitar, and this goes to the cannibalization question, did you promote it inside the piano app or did you use what you learned scaling Simply Piano and do almost like a parallel motion to scale Simply Guitar?

Yoav Sharon:

Parallel motion, we only do these promotions when it really serves our users. Meaning, where we feel that actually... so I'll tell you even an interesting example. We heard from many Simply Piano users that we understood that when they play, they also sing. So, we added in our library of, we have library of many songs, a lot of licensed songs, we added an indication for those pieces that we also had the same piece in Simply Sing so that a person know, okay, I can learn how to play this on my piano and my spouse can increase our confidence in singing this and we can sing and play together or I can do it by myself. So, only when we do feel that it gives value to each of the apps, we do this type of promotions.

We do have one angle and we can talk about it separately where we do promote our bundle, all of our apps, but this is definitely separate. When we start, no, we always start with our playing our independent growth playbooks.

David Barnard:

And it makes a lot of sense. And as you were describing your whole business earlier, I was thinking, "Oh, it was like a light bulb going off in my head." My daughter loves to draw, my son is playing the saxophone, my other son learned guitar. It's like in a family unit, you do have all these different interests, creative interests, and that's where the cross promotion makes sense. It's interesting to hear that it doesn't sound like that's a huge motion for you because I mean, that would be the playbook I think most people would expect.

You have this big scaled app, you're going to bombard it with pushing people to get the other app, but it sounds like you take a much more subtle approach of like, "Hey, you're learning piano. Do you also want to sing?" And then, "Hey, if you have a family, you can learn all the things." So, how do you present that to the user in an effective way?

Yoav Sharon:

I think what leads us is not the growth aspect, but rather their usage and retention. And at the beginning, Simply Piano, we had only a single user, single profile. And we learned exactly to your point, these are our households. Many people using sometimes several are using Simply Piano, sometimes several are using several apps. So, we introduced the family plan and the family plan gave flexibility for different members of the family. Later on, it became multi-profile with up to five profiles and multi-app. So, you have an offering that allows for this flexibility.

And what we saw that when you look, of course, on a cohort usage, you see that at any given cohort, the segment that has the strongest retention by far are those that have multi-app, multi-profile accounts. Because like you said, you're now very busy with hosting and podcasts and stuff. So, by your daughter, she's just went to summer vacation. She has time to start drawing and your spouse is now, she wants during the weekend to learn to pay the gap. So, at any point in time, one person at the family will engage with the app and enjoy this family plan, multi-app, multi-professional. Yeah.

Jacob Eiting:

It really fits the narrative you're saying just about the adjacencies in the household. I mean, I think about our Spotify family account subscription is like nobody's churning. You know what I mean? Yeah. I mean, it's just because everybody gets one and we want our profiles to be separate and we pay and then we'll pay forever because it'll never be a line that everybody wants to cancel at the same time, right?

Yoav Sharon:

I agree.

Jacob Eiting:

So, it makes a lot of sense.

David Barnard:

What are the mechanics of presentation? What have you learned over time? When somebody comes into Simply Guitar is the first paywall they see doesn't even mention a family plan, you just try and get them on guitar and then at some point in the future as they retain, you present it. What are the mechanics of how you do that?

Yoav Sharon:

It differs. It differs not only across apps, but also across the maturity of the app and across time. I think it also, it's not in itself isolated. It depends with which expectations they came from the ad, which campaigns we have out there, what is our current value proposition and in sometimes we can discuss it as well. Sometime, we have them soft paywalls to start with sometimes only waiting for them to really feel the value to appreciate the value and then ask them to subscribe. So, it does vary. I think all your interviewees and all the companies that you're speaking with, it's all about testing, always testing and what the data shows us.

David Barnard:

Do you ever advertise the family bundle as a unit? Do you ever do ads of saying, "Hey, your whole family's creative, join the bundle." And for those, do you send them to the web or to the app?

Yoav Sharon:

So, you touched exactly the point. We used to beware subscription mobile apps. So, we used to be 100% at campaigns and we started enjoying web campaigns. A couple of years ago last year, I think we've already, I think 20% of Simply revenue is already coming from web campaigns. What web campaigns allowed us is of course it does allow us for better attribution because on the app campaigns you have ATT and this is one of the main challenges, but in addition to better attribution and sometimes lower fees, but again, this is not our main driver.

It does allow us to first of all to customize the experience better to our users and also through that it allows us to reach new audiences that weren't able to reach them before that. We can talk about this, but I think the last point is exactly to your point, we're able to offer them this bundle offering. When you do your app campaign, you send someone to the app store, they are now going to download Simply Sync, Simply Draw, Simply Piano, but when they get into some kind of a web experience that is where you can really tell them, "Oh, welcome to Simply."

In Simply, you can access all those apps. So, this is where we're able to market our bundle offer. And definitely we are doing it in the web and it's really working well for us.

David Barnard:

It's kind of fascinating to me how Apple's rules shape how you develop a business because in some ways pre ATT where you could deterministically see that somebody saw an ad for Simply Guitar, maybe in that world it would've made more sense to have one app that has everything in it because you can do an ad for Simply Guitar, you can deterministically see what ad they saw and then put them through an onboarding that takes them through Simply Guitar. If you were advertising a family plan, you could have deterministically put them through the family plan.

And there's a little bit of ways to hack around that now with product pages where you can send the app campaign to a different product page and then you know what product page they landed on so you can customize a little bit. But it's kind of fascinating to me that the part of the draw to the web was actually Apple's rules making it harder to do these kinds of like customizations on it. Any other comments on that or just lessons from the web?

Yoav Sharon:

No, exactly that. And many companies, it's very popular web flows, right? You have Noom on the one side of the extreme side and you have single page web flows on the other side and what we found that working really well for us is the ability to have a holistic flow from the ad. Exactly to your point through onboarding and all the way to the payroll itself, if someone clicked on a parent ad and addressed at parents, we can address through the onboarding the entire pains and the entire needs of that parent that looks for an app for their kid. And through that, if I'm taking I think one step back, when we browse our social networks, people on Facebook and stuff, we're in a very lean back mindset.

We're scrolling and going from a lean back mindset to an app store and immediately ask to download an app, it's quite a friction and people are, "No, I'm chilling. Okay, I have an ad, but I'm not ready to download an app and start learning a new skill." Whereas our web flow helps us move people from a lean back mindset through consideration.

Jacob Eiting:

Yeah, you ask them a basic simple question just to get that first-

Yoav Sharon:

Exactly. And it can take two minutes, but still-

Jacob Eiting:

And by the end-

Yoav Sharon:

... it's a shift.

Jacob Eiting:

... they'll hit the download button because they've been warmed up.

Yoav Sharon:

Exactly, exactly. It makes much easier to help them understand the value even before trying the product.

Jacob Eiting:

But even aside from that, you're just like from a psychological perspective, you're like waking them up a little bit, right? You give them a little time to kind of like-

Yoav Sharon:

Promoting them. Exactly.

Jacob Eiting:

Yeah.

David Barnard:

So, how much of your traffic now is going through web funnels and have you seen any kind of ARPU lift or any meaningful benefit of going through the web?

Yoav Sharon:

About 20% of our revenue from CMB panel in the past year came from a web flow. We did see significant benefits for some of our audience to go through this web flow. We did see some very successful tests where this holistic experience from ad through onboarding through the paywall managed to increase conversion significantly.

Jacob Eiting:

For your paid, are you sending some users straight to the app store and some to web? Is there a rough breakdown of when to send them where?

Yoav Sharon:

So, it depends. Each app at its maturity level at what is the right creative at the right timeline. There are many considerations and we have very well oiled growth machine that checks all the effectiveness and performance of all of our campaigns all the time. It allows for better attribution. So, all this personalization through the way is something that benefits us, but it does vary. You don't have strict tools.

Jacob Eiting:

Sure. So, it's not like we're only doing web app. It's just like web to app is one of the types, you pair a piece of creative, a placement plus like where it goes and that those all three of those are being tested and optimized.  

Yoav Sharon:

Exactly. And actually, I mentioned earlier that it allows us to get to incremental audience. So, the web flow, for example, for us, it helped us be successful with Facebook for the first time.

Jacob Eiting:

I've heard that before. Yeah.

Yoav Sharon:

For Simply Piano, it didn't work before because the lean back mindset. And so, first of all, we're able now finally to reach out to audiences on Facebook.

Jacob Eiting:

Yeah, I've heard that. It's just like the universe of people who download apps, it's almost like an identity thing. It's like, I don't do apps, right? And so, it's the same thing you got to prime them to be like, "No, actually you should do apps," right? And, yeah, I've heard the same from other apps as well.

David Barnard:

I had this exact conversation with Leon Sasson from Rise Science-

Jacob Eiting:

Yeah, that's right who told me, I think this is originally. Yeah.

David Barnard:

He was on the podcast earlier this year and he said exactly that, that they've seen a ton of success or almost exclusively with the Facebook ads and he attributed it even to age that it is typically older, more fluent audience-

Jacob Eiting:

Who are native, right?

David Barnard:

... and who also not just needed more warming up.

Jacob Eiting:

Yeah, yeah, yeah. Millennials are app native. The app store's been around since I was in college, right? And that's not true for the generations ahead of me a little bit.

Yoav Sharon:

We don't take it. We are not insulted, but we are that audience.

David Barnard:

Yeah. Yeah, exactly. Any other top lessons from the web as far as like ... I mean, I think that's really insightful for folks to say, "Okay, we never found success on Facebook before. Let's try web flow from Facebook and not replicate our Instagram funnel." Any other top lessons like that that you think people can take away and like where to experiment, how to experiment. It sounds like y'all have done a lot of experimentation. So, I'd be curious to hear any other kind of top lessons people can take away.

Yoav Sharon:

We don't look at web flow as only a place where we can save some platform fees. And usually this is one of the drivers, right? Attribution is one driver, platform fees, but we learned that it's just a way to reach incremental audiences. You just need to understand what works with web flow, how can you communicate your value in a way ... And by the way, it's also you don't just replicate your app store to web experience. It's not about that. It's about how you can make your users or potential users understand some of the value they're going to get, set up the right expectations so that when they hit the paywall, they really understand the value they're going to get.

David Barnard:

That's a really different perspective, I think, than a lot of people these days. I mean, I hear from more and more people that it's just like, "Screw Apple. I'm going to send all my stuff to the web." And there's this weird hostility, but it sounds like you take a much more pragmatic approach of whatever makes us the most money, that's what we're going to do. How do you think about that?

Yoav Sharon:

So, I think it's more than just pragmatic. We look at the platforms, Google and Apple, don't look at them at the other side. We look at them as a true partners. We have, first of all, alignment of interests. We want to reach the most relevant audience that they have.

Jacob Eiting:

You have 30 points of alignment of interest.

Yoav Sharon:

Exactly. No, and they want to have these quality apps as valued to their users and app stores and they see most of the metrics, right? But metrics are lagging indicators. They don't always help understand. So, we found what's working really well for us is we work very closely with them. We share with them our plans, share with them our roadmaps. Of course, we share with them our challenges. We ask for their help in supporting some of the areas where we're going. And we found that in addition to helping us understand where the market is going, it also helps us really gain some access to beta programs. It helps us gain access to design partnerships.

Some of them I cannot even talk about here, like all the stuff, but really, really cool design partnerships that we partner with both platforms and basically we're looking at the platforms as real partners. Of course, no one likes to pay large fees for these.

Jacob Eiting:

Right, yeah. You ask people what fee they would want to pay, it's 0%, right? That's the only logical answer.

Yoav Sharon:

Exactly, Exactly. Exactly. We understand that and we're not happy to pay, but still we look at them as true partners and we have very close collaboration and relationship with them.

Jacob Eiting:

Yeah. I think it's like, David, you're just talking about the rage and it's like Sweeney... I mean, Tim, if you want to come on the pod, Tim, I know you listen, Tim Sweeney, please, you're always welcome, but it's like getting mad at the weather. You know what I mean? You could get mad at the weather that you're allowed. It's free country. You can do what you want, but I don't think it's going to improve your outcomes.

Yoav Sharon:

You cannot reach audience without them.

Jacob Eiting:

Yeah. And I think there's much more benefit in maximizing the relationship, seeing the alignment and then trying to ... And everybody I've talked to who has run the experiment has seen how much they can net out of the web to app, or sorry, app to web flows, like running their purchases. It's interesting, but it's, I don't want to say marginal, but it's pretty close to marginal, right? It's not business changing.

Yoav Sharon:

Exactly. It used to be more, but it's not that.

Jacob Eiting:

And I get it. This is where I get accused of being a shell for Apple because obviously I like AP and stuff, but again, it's like-

David Barnard:

It's just about making the most money.

Jacob Eiting:

Right. It's testing. You mentioned it already, but testing. It's like, "Hey, to test it, try it."

David Barnard:

But I think at RevenueCat, we're building web funnels. We have web payments.

Jacob Eiting:

We're all about it.

David Barnard:

We have paddle integration, but it's about how do you make the most money? Not like, how do you screw Apple? It's like send people to the web when the web makes sense. Send people the app when the app makes sense. And your point is so good, Jacob, don't let this kind of anger or rage or frustration-

Jacob Eiting:

Justice mindset, right about it.

David Barnard:

Justice mindset, make bad business decisions, make business decisions, still make emotional justice driven decisions.

Jacob Eiting:

Is it fair that Apple's a trillion-dollar company has a lot more leverage than you? I don't know. I don't make up the fairness rules, but it's reality, right? So, deal with it.

David Barnard:

I think a lot of people listening will be curious and you don't have to answer if you don't have a good answer, but How would you recommend people build a relationship with Apple? Often it's like a we'll call you, don't call us kind of situation. But do you have any tips for working with Apple and Google as partners and maybe even how you establish that relationship early on?

Yoav Sharon:

I think any company, any app developer at a certain size, but even already at the earlier sizes, you have an account manager there. Embrace that. Embrace that. Keep them in the loop, fly to meet them. Make sure that you share with them your plans, your challenges. So, in the earlier days we used to send our developers to WWDC with real problems that we have with building our sound recognition engine. And we gave unprecedented access to engineers in their sound system to help us in all of these forms, relationships, and they see a partner here that really cares to have great value to the users on their platform.

So, we're always trying to adopt all the new features and adopt all the recent technologies that we can to make sure that we give the most quality value to our users, the user experience across all of our apps. We have monthly meetings, even in Simply Piano, I think we have a fortnightly meetings, biweekly meetings with our account managers there, both in Apple and Google. So, we're always keeping track and updating them and learning from them where do they see that we're not according to what they expect in terms of benchmarks and stuff like this. So, I think it's just embrace this collaboration and keep ongoing communication with your account manager.

Jacob Eiting:

That's more meetings than I have with most of my reports.

David Barnard:

That's really great advice though. And speaking of those partnerships and collaborations, I know y'all have been working on Vision Pro and Android XR and things like that. And I'll be honest, I'm a little jealous in some ways in that as platforms are so early that I imagine you're not seeing like a dollar for dollar return on your investment in those platforms, but it's like you're getting to be at the forefront of this technology that will continue getting better and better and it helps build that relationship. I'm sure Apple and Google really happy that you were on the platform. And so, even if you're not getting a dollar for dollar return on today, you'll hopefully get it in the future.

Jacob Eiting:

I mean if it's ever a good platform, there's so much alpha and being early on a platform that just compounds. So, if it does take off, then the bet, even if you don't invest anymore, like the bet will pay off way down the road potentially.

Yoav Sharon:

I agree. I super agree. And you touched the XR and wearables and all this world of augmented reality. And for us, creating learning skill, learning hobbies, creative hobbies, when people experience them in an augmented reality, it's a different game. It's a different game. Of course, one day everyone, this is how people will learn how to pay the piano, to pay the guitar, to sing, to draw. For us, you touched it, I cannot say, but definitely some of the design partnerships that I mentioned earlier are around these areas. And for us, we really care to be like Jacob, like you said, at the forefront of all of these releases.

Anytime that we learn that a new device is coming up, we try to understand, okay, this form factor, which of our products will benefit the most from that form factor? And it differs across apps and across devices. And at that point, we set up, again, another pod where we are working very fast and very closely with the platform to make sure that we can have a product as early as the release of that device others. I agree with you. It's not about an ROI right now or the direct revenues, but it's definitely the direction of the future and we really believe in that future. So, we want to be there very strongly.

David Barnard:

Yeah. And I'm such a huge Vision Pro fan. I mean, it's too expensive. It's too heavy.

Jacob Eiting:

David, you got to believe, you got to hear this. I've never used it.

David Barnard:

You haven't?

Jacob Eiting:

I've never put one on my face. No, I should have asked you to bring it to the offsite or something because like-

Yoav Sharon:

I'll tell you, I lead the first build of Simply Piano on Vision Pro and I'm not kidding guys, seeing someone learning how to play with Vision Pro and I'm all immersed in that experience and seeing how at the end of their first course they are getting a standing ovation from a crowd in Carnegie Hall and playing goosebumps. It's like goosebump and this guy played all to joy at the end and feels like at the top of the world. You cannot get that in a non-immersive experience. This is one of the real benefits of having this augmented reality.

David Barnard:

That's what's so sad to me that rumors are Apple's kind of slowed down and they are working on the Vision Air, but it's going to be delayed a year or two or whatever it is. So, it will get lighter and easier and better-

Yoav Sharon:

For all of us to be-

David Barnard:

... all the things. But man, exactly what you're saying is like I don't use a Vision Pro a lot, but when I use it and especially, and I wish Apple would just keep leaning more into it and putting more content out because when you see a basketball game where you can actually see how huge, how athletic these ... I've never sat courtside at an NBA game, but you put on the Vision Pro and it's like, holy crap, that is a totally different experience than watching a TNN broadcast of a basketball game. The Vision Pro, they did all those sample videos and they have a whole series with adventure stuff. It is insane how immersive those experiences are.

And it's like I want to use it more, but as a platform, I wish it would have taken off more. And I actually had not downloaded the Simply Piano app on it yet. I need to go do that this afternoon.

Yoav Sharon:

Yeah, you should go ahead.

David Barnard:

But it's like when you get that experience. So, yeah, I'm as bullish as you are on the future of it, but we are very early innings and it's going to take a while for the tech to catch up.

Jacob Eiting:

They make an immersive email and podcasting app, then I will have a big use for it. Until then, I don't have as much time. It'd be an aspirational goggles for me.

David Barnard:

YouTube on the... oh, actually-

Jacob Eiting:

Oh, I'm sure. I'm sure.

David Barnard:

YouTube built a native app and it kind of sucks compared to the one that was-

Jacob Eiting:

My Christians one.

David Barnard:

Christian built, Juno. But man, kicking back in a recliner with YouTube like a hundred-inch TV, even that not immersive as far as like the video itself wasn't immersive. It was like an experience.

Jacob Eiting:

Young children, full-time job plus VR headsets, there's not enough room for all three.

David Barnard:

And it's part of why I don't use it very much.

Jacob Eiting:

Yeah.

David Barnard:

Yeah. All right. It's no more fanboying around the Vision Pro. Let's get back to the topics. I did want to talk about your contrarian view on monthly plans. I know that's something Simply Piano really focuses on where a lot of the industry has been pushing harder and harder into annual plans. So, why do you push in monthly plans and what are your tactics around that?

Yoav Sharon:

Definitely annual plans is the way that most companies start with, especially for Simply we're learning a new skill, learning how to play the piano, how to express yourself, drawing better, how to gain confidence in singing. It takes time. It takes time and it requires a lot of commitment. I'm going to now dedicate time the next few ... I'm going to start. You don't need much time, by the way, even 50 minutes a day, but still you want to start something you're committing to someone. And we saw that committing to an annual plan sometime deters our users. It's quite another commitment of another financial commitment.

So, first of all, it started introducing monthly plans and we saw that it adds that flexibility to our users. So, over time we realized, okay, it can work in some aspects and some users find themselves feeling better with annual plans because of the discount and maybe their intent is more clear. Whereas others, they select the monthly plans and they are renewing it from a month to month. Now it's not that straightforward because of course in an annual plan it's better cash-wise, right? You get all the annual price in advance. This is why companies start with it. You have now an entire year to improve your product before the renewal comes.

The move to monthly works only when you have good enough retention renewals on your monthly plans. So, when it's justified, when you can really move there, the math does work. However, again here, it's never only math for us. What we care a lot about is to be able to have this fast feedback loop between a winning test and how it gets translated, winning on usage and how it gets translated to its monetary value. So, by having monthly plans, this feedback loop is really fast. Every usage improvement-

Jacob Eiting:

You get more renewal binary events that are trustworthy. Yeah.

Yoav Sharon:

You improve your usage, you improve your retention, people use it more. Immediately it translates to a better renewal, one month renewal multiplier and it gets translated to revenues. So, it does work well for us the monthly plan. We moved there after having a very heavily and thoroughly tested pricing strategy for that because you don't just do monthly plans. Okay. But you need to really test thoroughly to understand what would be the right point with the best optimal balance for your users and for you. And today we have these monthly plans many of our users are using and some are still using annual plans that fits them better.

David Barnard:

And it makes a lot of sense. I mean, there's a reason why Netflix and big companies like that don't do monthly plans. And I was doing the math in my head as you were talking a minute ago, because I've never even done this math before, is that a $25 a month Netflix subscription is $300 a year. I did that right, right?

Jacob Eiting:

Yeah. If I had to pay $300 for Netflix, I'd be like, "It's never worth that to me. There's nothing about Netflix worth $300 to me," which obviously isn't true because I've been a continuous subscriber for 20 years or something, but I don't feel that way, right?

David Barnard:

I had this conversation with Seth Miller maybe five years ago. He was like, "Look, my thesis is if you have a high retaining app, a really great app and a loyal user base, the optimal LTV will always come from a monthly." But he was struggling to do that in his app, Rapchat, but that always stuck with me and thinking about the Netflix of the world, like we're saying, you wouldn't pay $300 in one drop for Netflix. And so, how are you thinking about and using the pricing to maximize LTV? And are you seeing good LTV on your monthly?

Yoav Sharon:

Yes, yes. We wouldn't have moved if we haven't seen. No, seriously, it's not across all of our apps, only at a certain maturity level where we do see really strong usage for our monthly plans we do this transition and we do have better LTV basically on our monthly plans for Simply Piano. For the other apps, we still split some of them and we do a lot of testing ongoing, but in our more mature apps we feel really comfortable about going with monthly plans.

David Barnard:

So, I'm curious on the annual plans, because this is something a lot of people test and I imagine you've done a ton of testing on it. What have you found to be a good ratio or a good discount percentage that does attract the people you want to annual, but then also kind of maintains a high enough monthly price where you do kind of maximize that LTV?

Yoav Sharon:

There is no single percent or single discount, but definitely the discounts vary, I think sometimes it's 60 plus 60% or sometimes 75. It depends on the plan itself. Of course, user psychology plays a lot here and all of our biases and anchoring, there are a lot of user psychology goes into pricing. This discount level is definitely one of the levers that we found really beneficial to test basically.

Jacob Eiting:

I wonder, I don't know if this played in at you, but I feel like annual versus monthly for a lot of developers, whether they think about it or not, it's like kind of a cashflow hack, right? It's like financial engineering. It's basically financing your growth with future customer revenues. Does that play into your philosophy here as like the need or lack of need for operating capital at any given time? Does that play into it at all?

Yoav Sharon:

We try not to get into these things. It's not about financial engineering, which I agree there can be this way, but it's not like that for us. For us, we value this cash when we try to, at the beginning of the product, when we try to use it to improve the product over time. At the end of the day, yes, annual plans give you a cash benefit, but monthly plans, we feel that it give you some kind of the truth about your usage.

Jacob Eiting:

What's the actual dollar? There's a dollar value to the information, right?

Yoav Sharon:

Exactly. Any retention, any usage value that is being really translated. So, we try to avoid these financial engineering. It's not beneficial. We do what works really well for our users and finding the right balance of letting those that care more about the discount to have the annual plans and letting those that care more about ongoing usage on a monthly basis, let them choose the monthly, this is what we found workspace for us.

Jacob Eiting:

Yeah. I say it's a luxury. It's a bit of a luxury of a company that has time, that has the ability to compound and let this thing grow. Because you see this often, especially in the money Twitter growth hacky part of App World where it's like, "Hey, three day trial to an annual plan gives you the most cash flow and then you can reinvest it." And that definitely works, but it's very unlikely to me that that is globally optimal, right? That it's probably just what you need to go from zero to one, which the kind of point I was digging into is kind of sometimes it's right and that can dominate the reasoning.

It's like, "Hey, the financial, like borrowing money from your customers at a 0% interest rate, or actually in this case, a 40% fee, you have to give a pretty big discount to do that, but can be optimal, which can be an input too." But I'm with you. I mean both I think emotionally and financially, I think the information flow of monthly, I also think it's like flexibility is good. And in fact, I look at ChatGPT and now they've differentiated and they've added annual plans and stuff. But for the first couple years, they were just offering a very simple $20 a month and I think there's one simplifies things for your customers, also for you is a great place to start.

And then also it does feel like it comes from a position of strength. I know this as an industry insider, maybe that doesn't affect the average consumer, but you go like, "Oh, well, it goes back to the Netflix thing, David. Like Netflix, it's X dollars a month," right? It's not like, "Oh, this was a discount and blah, blah, blah. They do bundling and stuff like that." But it does, I think in some ways signal premium to some degree, right? As a consumer, always buy the monthly, always buy the monthly. Even if it's five times more expensive, I'm always going to buy the monthly. Yeah, because I'm very bad at hedging or pricing my future attention span, right? I pay more for the flexibility, right?  

Yoav Sharon:

So, interesting because I'm as a parent, I feel that I know it's contradicting any logic, but I found myself buying annual plans for my kids sometimes because my inspiration, I think of course they will use it. Of course, they will-

Jacob Eiting:

Just depends on the app.

Yoav Sharon:

... use this mass app. Thank you for those.

Jacob Eiting:

You make an investment.

Yoav Sharon:

After six months, I realize, "Oh, I have a subscription here."

Jacob Eiting:

Yeah, yeah, yeah. It goes back to testing, right?

Yoav Sharon:

Exactly.

Jacob Eiting:

Every user has different motivations and you have to test for the aggregate.

David Barnard:

Have you ever experimented with weekly plans? I mean, a lot of apps that use them aren't high retention and so it's kind of like maximizing the LTV over a very short time span.

Jacob Eiting:

It's the monthly thesis set the limit, right? It's like, how do you maximize, maximize?

David Barnard:

For Simply Piano and then maybe especially the bundle a week, I don't know exactly what your plans are for the bundle, but five or 10 bucks a week is probably a very reasonable price for the bundle where you get all the apps and everything like that. And then I heard from a guy at Apple, he's since left so I feel more comfortable saying this.

I pushed back really hard on weekly subscriptions like a decade ago and the conversation with him was like Apple from their talking to users and everything like that, they do see, especially like in emerging markets and stuff that a weekly plans are, that people do like them because it gives you that like you're not ... For people who like $50 a month is a lot. If they get $50 a month of value but spread that out or $40 a month of value, but they spread that out $10 a week, that's actually a nice, even kind of what we were talking about with the cash flow of monthly, it's like taking that to the limit of like, I'm just going to pay $10 a week instead of $40 a month instead of $480 a year.

So, of all the apps, I think a bundle with all your apps probably is worth 10 bucks a week. So, with all that set up, I'm curious if you've done any experimentation on it and then what you learned doing that.

Yoav Sharon:

It's a great question because I think I always like to look at the extremes. Yes, weekly reduces the friction even further, right? You don't even think about $5, how much the coffee cost you this morning. However, when you look, and I'm always sorry for always going back to our users and how they use our app, you want to learn a new skill. This takes time. You cannot judge yourself every week. Oh, do I already know how to play the piano? Am I more confident in singing already? No, this takes time. So, having, yes, it's a low friction, but having this on every week, are you sure you want to pay? Are you sure you want to pay? It's not that easy.

So, I think when we think of usage, the longer plans make more sense for how people learn new skills. However, you're right that there is this other side of reducing friction upon checkout. We've tested it in some of the apps, not in the bundle in some apps, but right now we're not offering anything.

David Barnard:

And that says a lot. And I love your point too, that even on a monthly, there is a little bit of a commitment like, "Hey, I paid 40 bucks or 30 bucks or whatever the price is and I'm going to make use of that. I'm going to actually..."

Yoav Sharon:

You need to build the habit. You need to build the habit now.

David Barnard:

And finances are an incentive to build that habit.

Yoav Sharon:

Exactly.  

David Barnard:

Exactly. As you've scaled the business, what have you done as far as localization? I know so many apps so dependent on the US and so focused on the US, but it does seem like as companies scale, they have more resources and time to invest in other countries and then actually start to make it work where people more focused on the US, just throw a price out there and it doesn't happen. So, what are you seeing internationally for your products?

Yoav Sharon:

I think for many companies, localization or expanding to other geos is quite a high potential low risk growth engine, right? There's not so much risk, of course. You will localize your app to a different culture, people will feel more comfortable using it. However, it's not that trivial. We've done two things that mainly work well for us in terms of localization. First of all, when you localize to a different country or you want to not only convert your currency there, but you really want to localize the pricing, which makes sense.

So, we created our own pricing index, like our own Big Mac index, similar concept that takes into account not similarly to the Big Mac, like the purchase power in that geo, but also other considerations that we can refer to when people think about using learning how to pay a musical instrument or learning how to draw. This is one thing that we've done and we applied this pricing scheme across all geos. We saw significant dramatic ARPU increase. In some geos, we were surprised that it didn't work, but we had to adapt there, but in the vast majority of geos, it really worked really well for us.

David Barnard:

What was the initial hypothesis or factors that went into the first test and then how many geos did you go into where your assumption on price was wrong and you had to change it? Did you start with the Big Mac index and work your way back or how did you actually ... Because this is something I hear a lot of people asking about. Actually, this is a question I get for RevenueCat all the time. It's like, you guys have all the data, you should create a pricing suggestion table, but it's not that simple. Different products have different willingness to pay. So, what were the kind of factors that went into your decision making around that starting price when you were focusing on a new geo?

Yoav Sharon:

We start always with the linest way possible. So, I think at the beginning, and talking about years ago, we implemented the Big Mac as itself index and then we evolved it over the years. In that case, we didn't test one geo after the other. We just defined, we modeled pricing strategy with the same principle across all geos. We rolled it out as a test and we saw which worked and we optimized it over time. And of course, pricing tests also, you need to update your pricing not only as your up matures, but also as you reach new audiences, the time passes.

And so, it is something that we continuously work on, but I think you touched also on the way that we test stuff and it does touch the second part of how we localize and basically localization, it's more than just translation. In our case, we localize the content, the songs of that country, all the translation of the app, all the app store, and of course the pricing and the creatives as well. But if you want to localize to a specific country, you cannot do all this work only to find out that it's not as you hoped for. So, what the principle that leads us is we want to make sure that whatever we do, we do it with the highest quality. With localization, it's all about trust, right?

If you try to localize your first time user experience, but you don't continue to localize deeper into the product, people lose trust. I don't know if any of you, if you try to localize to German, Germany is an interesting example where the way you address people changes. So, the consistency, the way that you localize throughout your app, the way that the UX looks, the currency, everything, you need to make sure that whatever you do, even if it's a limited scope, you do it at the highest standards, you don't want to lose trust, you want to make sure that you set up the right expectations with the users.

And once you gain confidence in that direction, then you can go all in and do full localization, but we don't do it to begin with because okay, it's not the riskiest part of growing a product. It's something that it's quite sure when we need, we expand to other markets.

David Barnard:

I'm going to clip that whole segment and anybody who tells me, "We tried Germany, we localized the price, we did a couple of things and we just can't crack Germany, I'm going to send them that clip because cracking international markets really is a ton of work and it is an investment and you have to think about it like that because if you just change the price and expect to crack a market, that's not how you crack a market. Any other top lessons or interesting geos where there were counterintuitive things that you learned that maybe you could share and at least give people a head start?

Yoav Sharon:

So, yeah, actually one of the most mind-blowing learnings that we've had at some point in time at Simply Piano, we decided we already had been translated to 11 languages. And we decided we want to go to the first geo where we're going to really localize, not translation, but fully localization. So, like we always do, we created a very thoughtful and deep model that estimated the potential of each geo in terms of what might be the upside in that geo, the incremental audience and incremental ARPU, but also what is our confidence that we can really meet that potential. So, we landed on Japan. Japan for us for Simply Piano was our first deep localization that we wanted to grow.

So, we started, like I mentioned, we're highly confident that we can really reach this potential. We localized some Japanese, some songs like from anime and all the UX was changed and app store creatives, everything was translated and localized, of course, currency to Japanese and all the metrics started growing great as expected, except for one metric, the checkout conversion, the paywall conversion, it did not move even on the contrary, it even decreased and we didn't know why. Come on. It's like we did everything properly. We brought in a country manager, Japanese country manager, a great guy, and he reviewed our flow and he told us, "Guys, you're not treating the paywall properly us, we're used to all the best practices in paywalls, make it very clear, least disruptive.

You want to minimize the details on the paywall. You want some social proof, you want some things, but overall you want a very clean paywall." The Japanese 180 degrees are opposite. They expect very detailed story of the company, of the founders, of our values, of all the things that you're frustrated that no one reads, they want to read all the social quotes and a lot of colors. I'm telling you, you can't even believe we had a very long one pager that they scrolled and scrolled and read, conversion skyrocketed.

David Barnard:

Wow.

Yoav Sharon:

So, it taught us that in any localization, best practices can take you up to a certain point, but you really need to understand the intricacies and delicacies of each user that you're serving in the audience and what really bothers them. So, it was a great lesson in localization.

David Barnard:

Such a great insight. Well, as we wrap up, I'm going to ask you the three questions I now ask every guest kicking off with what's the most impactful experiment or change you've implemented this year, your biggest win?

Yoav Sharon:

I can talk about a fantastic test that our product team in Simply Draw did where it ... Of course, we didn't talk about how we use AI across all of our work, but we use it very, of course, extensively and heavily and they used AI to bring the drawing that the kid was just finished drawing, bring it to life and this gave the kids excitement and something to be proud of that they were running to their parents to be proud. "Look what I did. Now the parents at that point, what did they see? They saw that, hey, this app that my kid is using is not just spending time on another app, it's very positive screen and they could see the value of the app.

So, when we introduced this during first time user experience, it really increased ARPU because parents could really understand, "Hey, this product worth me investing in it." So, this was an amazing, I think, win from our product team. It was something that they do these social shares where they share organically, parents share organically on Instagram like, "Look what my kid, eight-year-old kid did." And it's a delight. It's a delight. You see them, it's really a fantastic way to see.

David Barnard:

Have you found that feature to perform well as an ad creative? Once you launched that feature and saw it really take off, are you actually using that in ads? Because sometimes, that's a fun way to get a really high performing ad is to find that kind of magic moment.

Yoav Sharon:

Exactly. So, we are doing it and we are doing it and you're spot on. Many times, many of our creatives are being inspired by real usage that happens and features that are really beneficial to our users. We turn them into ants.

David Barnard:

Yeah. Very cool. All right. What is the worst experiment or change you made in the past year, your biggest fail of the past year?

Yoav Sharon:

I knew that you're going to ask me these questions because you're asking it in every episode and I am a big fan of your podcast. When I though about it, I said, first of all, so many to choose from, right? We're a testing company, we're always test and so many failures. But I think one that taught us a lot was what we call a premium awareness test where in Simply Piano we introduced a soft paywall at the end of onboarding and we wanted to see maybe it will be appealing to ... The onboarding will be enough for people to already commit. This test was fantastic significantly on ARPU. It was a great, great win.

We celebrated it and we were proud of it, and we enjoyed it for month and month only to realize after lots of month that after many months, that actually the users that subscribed through that soft paywall were using our touch experience. Meaning, they don't necessarily have any piano at home or any keyboard home. We have some couple of touch courses on Simply Piano. So, they only enjoyed playing it, but they signed up for a year. We don't have any value for a year. So, this is not the audience that we're looking for. So, we're so bummed about it because it wasn't winning as we thought, but then we had a second lesson.

Then when we looked deeper into the deeper segmentation, we realized that actually one segment did find real value in it and this was the segment of kids because kids, they love to really play and play the same songs again and again and again. They just enjoy it and it builds them, it gives them time until they're ready to get their first small keyboard at home. So, we added up taking it off our adults, all the accounts with only adults profiles and we kept the soft paywall for those accounts that have kids profiles on. And this works well for us, but it started as a really very surprising loss that we had for that test.

David Barnard:

Yeah, that's fascinating. All right, last question as we wrap up and this is a fill in the blank. Growth would be easier if ...

Yoav Sharon:

I think if we could impact users during awareness and consideration phases without hurting their privacy needs. At the end of the day, ATT is there for a reason, right? Privacy is good. It does prevent us to customize the experience already from awareness and consideration phases. So, I think if we could magically do that, not hurt your privacy, but still be able to fully customize our growth activities and creatives for you, it could have been easier.

David Barnard:

Yeah. It's especially hard for you all targeting kids. The rules around kids and a lot of it is like governmental regulations and stuff like that that you have to abide by.

Jacob Eiting:

And we all know just how safe and wholesome the app store is for kids, thanks to those regulations. As parents, we all know that's been done. Thank you very much, Apple, for protecting us. Sorry.

David Barnard:

All right. Well, this was so much fun. I really enjoyed the conversation. I think there's so much people can take away experiments they can go do based on this conversation. So, thank you so much for sharing and opening up. Anything you wanted to share as we wrap up? Any roles you're hiring for? Anything you wanted to shout out?

Yoav Sharon:

So, first of all, it was a great fun. Thank you so much for having me and it's a real honor to be here. I think for us, I mentioned it earlier, we're always hiring on our website, the positions we're looking for. It's always about being able to reach almost every household around the world and help them fulfill their long life dreams sometimes of playing piano, playing the guitar, singing more confidently or drawing more expressively. And I think we're thinking big.

We're thinking we're on our way there and I hope to be able to speak with you guys maybe in a year or two years' time and to talk about more products and wider audience and more than anything, more lessons that we have gathered. It's a really exciting time.

David Barnard:

Awesome. Thank you so much for joining us. This was so fun. 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.