Founder Playbook · Sub Club by RevenueCat
9 tactics from Eric Stromberg
The Rise of Consumer SaaS — Eric Stromberg, Bedrock
Watch the full episode“we launched i think we had about 15 percent churn so i looked at the numbers and i said 15 churn that seems really high i then checked it against kind of what netflix was seeing and what these act scale companies were seeing and they should call it three four percent of the time churn”
Month-1 Churn of 15% Is Normal — Netflix's 3% Is an Apples-to-Oranges Comparison
When you launch, almost all subscribers are new — and new subscribers churn at much higher rates than older ones. Comparing your month-1 blended churn to Netflix's steady-state 3% is meaningless. The metric that matters is whether churn improves cohort-over-cohort; the flattening asymptote is the real signal of product-market fit.
“as subscription businesses get older as their uh cohorts age the churn just kind of naturally comes down over time... as a new entrant again you come in and you're turning at 15 a month you have to spend a much higher percentage of your revenue just to replace your user base every month”
Old Cohorts Compound Into a Moat — and a Cash Flow Advantage Over Every New Entrant
Mature subscription businesses have older subscribers who churn at 2–4% blended. A new entrant churning at 15%/month must spend proportionally far more revenue just to stay flat, while incumbents invest that surplus into R&D and acquisition. This natural compounding of retained cohorts is what makes established subscription apps structurally hard to displace.
“apple only launched an app subscription 2011. like like i know you all know that but like a lot of people don't focus on the limited audience right audience and then stripe same thing around that same time and google at the same time so like it is new in this in the spectrum of internet evolution like it is very very new”
Consumer SaaS Is on a Later Evolutionary Timeline — Don't Compare It to Mature B2B SaaS
When B2B SaaS was nascent, investors dismissed it the same way people dismiss consumer SaaS today. Apple app subscriptions, Stripe, and Google Play billing all launched around 2011 — meaning consumer SaaS has barely a decade of infrastructure. Judging it against 25-year-old B2B SaaS outcomes is the same mistake investors made dismissing Salesforce in 2000.
“whenever you're pitching the company again to investors to the press to to people you're going to hire there's like 10 talking points that you that you talk through that you speak through and you see someone's eyes light up and you hate to lose eight or nine of those but often that's what you need to do right to really land the punch on the one thing”
Pitch Like a Screenshot Essay — Kill 8 of 10 Talking Points to Land the One That Matters
Every pitch has one point that makes eyes light up — but founders resist cutting the other nine. Just like a screenshot essay forces a single chart and 30 seconds of voiceover, your pitch should identify that one insight and cut everything else. Ruthless distillation is the competitive advantage in investor meetings, press pitches, and hiring conversations.
“they built a product that did very accurate gate tracking for riders... they used that one tool as a way to basically aggregate all of these equestrians in the world and then went deeper into their workflow... a safety tracking feature where basically when you turn that on if there's impact someone that you select is notified”
Wedge Deep Before Expanding — Equilab Went From Gait Tracking to Safety Alerts to Community
Start with one precise problem, get people to depend on it, then deepen into adjacent pain points within the same workflow — not copy what competitors do in other categories. Equilab's gait tracking gave them the equestrian audience; safety alerts made the app part of relationships; community tied users to a specific barn. Each step made the product stickier without changing the target user.
“for a content-based business i think there is a decision point that every content-based app needs to make which is are you a platform to enable other content providers to reach customers... the flip side being a platform is to be a content producer”
Platform vs. Content Producer — You Can't Do Both Without Diluting Your Moat
Content apps must pick a lane: Roku-style platform aggregating third-party content, or Peloton-style producer owning original content. Trying to do both forces heavy content investment while simultaneously ceding distribution to channels where users already are. Pick the model that fits your user relationship and build the moat that model enables.
“what's gonna really improve your business and kind of break through what i refer to as the carrying capacity of the business which is basically when you know churn equals new customers and you basically start leveling out to actually cut through that carrying capacity you need to drive product improvement”
To Break Through the Growth Ceiling, Drive Product Improvement — Not Just Better CRM
Every subscription business hits a 'carrying capacity' where churn absorbs all new growth. CRM tweaks, annual plan nudges, and better onboarding emails move the needle 5–10%. To actually break through the ceiling, you need product improvements — better content discovery, data accumulation fed back to users, or expansion into adjacent offerings.
“can we buy these software businesses these sas businesses that sit adjacent to fintech opportunities and then actually launch those fintech opportunities so things like payments banking cards payroll and lending on the back of the initial wedge that that company has carved out for themselves”
The Fintech Bridge: Apps Adjacent to Payments Can Unlock a Much Larger Business
Universe Software's thesis: scheduling/booking apps are wedges into payments, payroll, and lending — the same playbook as Shopify (started as SaaS, 70% of revenue is now fintech) and Toast. The app gets you the trusted user relationship; the fintech product is where the real margin lives. Any app adjacent to a point of transaction has this same optionality.
“consumer spending in the united states is like two-thirds of uh spent so it's like greater than business spend right so you start there now of course there's a lot of things people are spending on that aren't ultimately going to be captured by apps but just as a starting point there's no inherent reason why consumer sas or consumer spend should be dramatically less than b2b spending”
Consumer Spending Is 2/3 of GDP — No Structural Reason Consumer SaaS Should Be Smaller
The conventional wisdom that B2B is inherently bigger than consumer misses the macro reality: US consumer spending dwarfs business spending. The opportunity in consumer SaaS is limited by infrastructure maturity and innovation cycles that are still early, not by demand. The TAM argument for B2B over consumer is a temporal artifact, not a structural truth.