Founder Playbook · Sub Club by RevenueCat
12 tactics from Michael Segal & Mark Ungerer
How Skylight Doubled Subscription Prices to $79
Watch the full episode“our test showed us that 99 would have made us more when you calculate all the numbers in the spreadsheet it was like a little bit better right it wasn't like massively better and so it's kind of like why don't we do that and it was like I don't know it just felt like overreaching right we were doubling our price we want good vibes to continue we can always go up”
Double the price but stop short of the data-maximizing number
Skylight's tests showed $99 narrowly beat $79 on spreadsheet ARPU but felt like overreaching after doubling from $39. They chose $79 as a middle ground with high confidence it would hold, leaving room to raise again later. Optimizing purely for ARPU-max ignores brand equity and customer sentiment; leaving a little on the table today preserves the ability to raise again in future without triggering a backlash moment.
“when it's something that they feel on almost a values basis should be free the emotion that is elicited is disgust and anger and when you're trying to build a multi-billion dollar brand that is not an emotion even if it's actually short-term subscription maximizing not an emotion you want to elicit”
Disgust and anger tell you the paywall line is wrong
Skylight uses emotional reaction as the primary paywall calibration signal, not conversion data. If customer interviews or reviews reveal disgust rather than reluctant acceptance, the feature comes out of the paywall regardless of short-term subscription lifts. For a brand trying to grow over a decade, anger is a long-term churn and word-of-mouth cost that never shows up in the experiment dashboard.
“on myskylight.com we have a much higher attach rate to the subscription because we can turn the subscription on automatically and we actually like pro tip here we give a discount on the hardware if you sign up with the subscription and that is a super successful way to get subscribers”
Bundle hardware discount with subscription to lift attach rate
On the owned website channel, Skylight bundles a hardware discount with subscription sign-up so users pay less for the device today, get a free month, and full access. Most people do not opt out. This cannot be replicated on Amazon or in retail, giving the direct channel a structurally higher subscription attach rate. Hardware founders: use your own storefront to make the device discount the subscription acquisition mechanism.
“we flipped that to Apple and we saw over 100% increase in conversion now the number of people that were doing that was smaller right so again it wasn't like the 2x factor of the price that affected everybody but just reducing that friction of like mom pulls out her phone scans a QR code bang she's subscribed over 100% lift”
Switch QR-code checkout to Apple IAP for 100%+ conversion lift
Skylight replaced a web-based checkout behind a QR code with Apple IAP and saw conversion more than double on that channel. The absolute volume was smaller than the direct price-increase impact, but it required minimal product work. Friction in the payment step, even one extra screen or redirect, costs a meaningful fraction of ready-to-buy users; the Apple native checkout is often the path of least resistance.
“you want the what the customer is buying like the heart of like why do they want this thing to be part of what they're getting and they're paying for that $300 or they'll feel sort of tricked and duped right”
Keep the product's core promise free or customers feel tricked
Skylight draws the paywall line at the product's core promise: photo-sharing to grandma stays free, videos go behind the paywall. Calendar management stays free, meal planning is a subscription. When the feature a customer bought the device for is paywalled, the emotional response is betrayal rather than aspiration. Define the core promise of your product explicitly, and never put it behind a paywall regardless of conversion impact.
“if your product isn't like a solid 40 NPS I think marketing effort and dollars are kind of a waste of time cuz you're going to get a false negative people aren't going to want it you're not going to know if it's cuz your marketing sucks or your product sucks”
Marketing spend is wasted until your product hits 40 NPS
Skylight launched its calendar product in 2018, gunned marketing in 2021-22, but the product was not ready and spend generated no traction. They nearly killed it entirely. The lesson: marketing before product-market fit produces false negatives that could kill a good idea prematurely. Hold marketing budget until NPS is comfortably above 40 so you are testing market demand, not product readiness.
“we did not apply it to our existing customer base they were grandfathered in if they reached out to us we honored the old price effectively indefinitely”
Grandfather existing customers when raising prices
When Skylight doubled its subscription price from $39 to $79, it applied the new price only to new customers. Existing subscribers were grandfathered into Legacy Plus with no change, and anyone on the fence could email for the old price indefinitely. This preserved goodwill and sacrificed only a few million in theoretical revenue uplift. When raising prices, protect long-term brand equity rather than trying to extract maximum short-term revenue from the existing base.
“just pay back on the first order do whatever you humanly can to pay back on day zero because then you have no marketing payback time with Skylight with a hardware business you have the added benefit that we're selling a thing right so like a physical thing so we pay back every single order in the company's history has paid back on day zero”
Hardware pays back on day zero, eliminating the VC payback problem
Because Skylight sells physical hardware, every marketing dollar generates same-day hardware revenue covering acquisition cost and eliminating the payback period that forces software-only subscription companies to raise venture capital. Michael generalizes this: find a way to generate upfront cash on day zero, whether through an annual plan, hardware sale, or setup fee, and the VC dependency disappears entirely. Day-zero payback is a bootstrapping superpower.
“the data shows us after 30 days it's pretty hard to change their behaviors so our newer customers that set up the device with more features tend to use those things more the older customers their habits are set”
Onboarding window closes after 30 days: front-load feature discovery
Skylight found that customers who set up more features during initial onboarding continued using them long-term, while those who skipped them almost never added them later. After 30 days, behavior is set. Every subscription-tier feature that goes undiscovered in the first 30 days is a renewal risk. Front-load the aha moments for your premium tier in onboarding because the window is much shorter than most product teams assume.
“we don't actually in our product call out what is a premium plus feature if you are subscribed which I think makes a pretty big difference as the person is thinking about when it's renewal time”
Remove premium labels after subscribing to anchor renewals on total value
Skylight deliberately removes premium-feature labels after someone subscribes so renewal decisions are anchored to overall product value rather than a feature-by-feature accounting exercise. Renewal rates remain high even among users who do not heavily use the subscription bundle, because the device's constant presence and daily utility carry them through. Labeling every premium feature trains subscribers to audit whether they are extracting enough value, which increases voluntary churn.
“it's as simple as growth versus profit and a lot of trade-offs we deal with come back to growth versus profit it's really hard to do both at the same time you could either grow grow grow by making it really easy to subscribe or you could juice your profit by making sure you're not paying a 30% tax”
Growth vs. profit: IAP tax is worth paying when conversion friction costs more
Michael frames the Apple IAP vs. web billing decision as a pure growth-vs-profit trade-off and concludes that for Skylight's growth stage the 30% tax is worth paying because Apple's native checkout converts better. The math only flips if you are optimizing for EBITDA to satisfy PE or M&A buyers. Know your objective before optimizing: maximizing subscribers and maximizing EBITDA require different decisions on the same question.
“today about 20% of people who reply say that it's life-changing and our hypothesis is those are the people who are getting us dozens and dozens of new customers just by virtue of they can't stop talking about it”
20% of customers calling you life-changing are your real growth engine
Skylight polls customers and finds roughly 20% describe the product as life-changing rather than just useful. Michael's hypothesis is that this cohort drives a disproportionate share of organic growth through word-of-mouth, each generating dozens of new customers. The product goal is therefore not marginal improvements across all users but engineering specific moments that move customers from very useful to life-changing, which is what turns paid growth into organic momentum.