Founder Playbook · Sub Club by RevenueCat
9 tactics from Eric Crowley
Optimizing Your Subscription App for Growth
Watch the full episode“Instead of just pumping ads through Facebook and trying to find someone who fits a profile, you spend a lot more time really narrowly targeting your demographic, your niche, and then finding ways for them to find your product organically.”
ATT is short-term pain but forces organic acquisition that builds lasting asset value
ATT degraded Facebook targeting efficiency — CACs rose 20-30% and install-to-subscribe rates fell because apps could no longer reliably reach their ideal user. Eric Crowley frames this as a forcing function: the companies that adapt will build organic acquisition engines (partnerships, content, influencers) that are not dependent on two tech companies in San Francisco. Those organic channels show up in enterprise value at exit; a Facebook-only channel does not.
“Pink Bike partners with the trail associations for mountain bikers, and those trail associations now act almost as the marketing partner of Pink Bike to let consumers know that all the trail detail is on the PinkBike app.”
Partnership distribution: PinkBike's trail associations became a zero-CAC acquisition engine
When paid acquisition becomes unreliable, the apps that win embed themselves in their community's existing infrastructure. PinkBike (TrailForks) distributed through trail associations — the very organisations their target users already trust — with zero ad spend. Eric cites Strava and Pray.com/NFL as parallel examples. These partnerships are earned, not bought, and compound brand value in a way a Facebook campaign never can.
“Your LTV of each one of those three groups are very, very different. Really find out who those locals are — who are those people that are going to come and use your app every day, every week — and find ways to measure that.”
Tourists vs Locals: average LTV hides the cohort that will make your business
LTV from an average subscriber base blends three cohorts: power users (locals) who stay for years, casual users who drop off after 2-3 months, and wrong-fit users who churn in month one. Eric advises breaking cohorts and optimising product, acquisition, and fundraising narrative around locals only — because in five years, only locals remain, and they define your actual retention curve and investor story.
“You acquire 100,000 this year and they're still there next year, and you put 100,000 on top of that — by year three you just continue to grow this pie of people who are very sticky in the product.”
Long-term local retention stacks cohorts into compounding revenue layers
If locals genuinely flatline on churn (like long-term Netflix or Spotify subscribers), each acquisition cohort becomes a permanent revenue layer. Year-over-year you do not replace subscribers — you stack them. This is the mechanism behind the extreme multiples CSS companies command: investors are pricing the right to that stacking behaviour, not just today's ARR.
“For a really strong app an investor would be super excited — you're closer to 6x. Less than 3x you start to cool off. But the important thing is how does the story of your business tie to these metrics.”
LTV to CAC of 6x signals investor-grade health; below 3x, excitement cools
Eric's benchmark: investors get excited at 6x LTV:CAC; 3x is lukewarm. But the ratio only makes sense relative to stage. An early-stage land-grab might intentionally operate at 1-2x while acquiring UGC-contributing users whose platform value compounds. The discipline is building a narrative that explains why your current ratio is a strategic choice, not a weakness — and knowing which metrics each investor type prioritises.
“On advertising you're picking up pennies per user. On a subscriber you're making $10-$20 a month — maybe $60 a year. The amount of users you have compounds so quickly, and if you have heavy retention you've got these really thick layers of cash flow that come in every year.”
Spotify vs Pandora: subscription compounds; ad-revenue picks up pennies
Pandora was the US incumbent when Spotify was a small Nordic startup. Spotify asked users to decide if the product was worth money — a hard ask — but subscription revenue at $60/year per user versus pennies per ad impression means compounding at entirely different rates. Each subscriber funds better product, which attracts more subscribers. Pandora optimised for reach; Spotify optimised for LTV. The chart of their revenues over the following decade tells the story.
“Day One got bought by Automattic — raised almost zero outside capital. He just listened to his users, didn't care about vanity metrics, grew really nicely, and got a fantastic exit out of it.”
Zero-capital, user-obsessed bootstraps can achieve premium exits
The Day One acquisition by Automattic is Eric's proof that you do not need VC money to build a highly valuable CSS business. The journal app grew quietly by serving its locals obsessively, never chased press, and exited on the strength of genuine long-term retention. This validates the locals-first strategy: build a product so useful to the right people that valuation follows without needing headline growth metrics.
“What else could people pay for additional services? What we've seen is marketplaces or transactions spinning off these — if you have a really passionate user base doing camping, what about a marketplace to buy and sell used tents?”
CSS needs net revenue retention story even without SaaS expansion — consumables and marketplaces fill the gap
CSS lacks SaaS-style seat expansion, so NRR is structurally capped below 100%. Eric flags this as a known CSS limitation in public markets, but points to two paths: consumable add-ons (like Tinder boosts), and marketplace transactions that monetise existing user behaviour. The prerequisite is scale — he explicitly warns founders against adding a marketplace before $20-50M ARR, where focus still beats complexity.
“There's a lot of tourists in that group that start a trial or convert a trial, and a lot of people are targeting off of that — as these methods become less good, it'll force developers to actually talk to users.”
Optimising Facebook on trial conversions acquires tourists, not locals
Optimising Meta campaigns on trial starts targets the event easiest to drive, not the users who will pay for three years. High trial volume with weak long-term retention is a tourist-acquisition machine dressed up as growth. ATT degrading that signal is arguably a gift: it forces a shift toward understanding why locals convert and building acquisition around those behaviours — lower volume, far better LTV.