How to win in consumer subscription

We’ve observed a trend of consumer apps pushing annual discounted pricing more and more aggressively (sometimes not even offering monthly prices anymore, like Calm) to improve revenue retention metrics and reinvest revenues into growth. We’ve also seen others do a lot of creative experimentation with their price points (e.g. Noom’s ‘name your own p... See more

“’Take the long view’ is an operating principle at Duolingo that we’ve stuck to for years. We believe it’s key to building a durable business. It means: if something works in the short term but hurts Duolingo in the long term, it’s not right. We make decisions that keep us moving toward our big goals.For example: If you offer subscription pricing t... See more

“A helpful mental model we use when designing the first-time user experience is to look at how long it takes a person to reach the ‘aha’ moment in our app. That’s the moment when the problem we solve and the role our app plays in a person’s life becomes crystal clear. It’s the best moment for magic. On Tinder, it’s when you get your first match. On... See more

“One of the most important elements of Grammarly’s early success was nailing a narrow, strong PMF early. Specifically, this was ‘high-consequence writing,’ e.g. term papers, cover letters, business memos, public blog posts. We targeted them aggressively with custom creative, landing pages, and onboarding experiences.”—Yuriy Timen

This helped us continuously increase our retention over the years, making Duolingo more fun and sticky. Every screen in our products is obsessed over many times by many people. You can see this throughout the product, where every screen takes Duolingo design principles seriously: every screen will have minimal text, be gamified, simple and intuitiv... See more

“The bar for freemium models at the time was Skype, which converted about 7% of their users to pay at least something—maybe a dollar. We hit that in a few months, but it just continued from there. Past 10%, 15%, 20%—and we realized that we had stumbled on what might just be the most effective freemium model the world had ever seen.”—Gustav Söderstr... See more

Duolingo, which was also driven almost exclusively by word of mouth, optimized for free user growth: “By offering all of its learning content for free, Duolingo built a massive user base through word of mouth and no paid marketing. This also helped us build a growth revenue loop: Building a free and fun product → more users → more subscribers → mor... See more

The second most consistent pattern across these companies was an inseparable alignment between the product roadmap and the growth engine. Surviving in B2C is all about finding an efficient (aka cheap) growth channel.

Rishi Mandal: “Efficiency, and the discipline to keep our team and footprint small, has allowed us to do something that I think category-creating consumer businesses have to be able to do, which is to be misunderstood for a number of years. When we started Future, we felt that the broader world (consumers, investors, our friends, the press) may not... See more