Wittenborn: Consumer App Churn Resembles SMB SaaS After Year One
Nico Wittenborn · Nico Wittenborn: Consumer Subscription Apps; Using Evolutionary Biology to Invest; Solo GP's | E1017 · 20VC with Harry Stebbings · May 22, 2023 · at 13:53
Nico Wittenborn, founder of early-stage VC firm Adjacent, defends consumer subscription models against host Harry Stebbings' concerns about high churn compared to enterprise SaaS.
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“The insight that we've had with some of the first companies we invested in is that the churn is usually high in the first year, and then from the second year on, it looks very much like SMB SaaS churn.”
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More from Nico Wittenborn
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“And so I believe that those companies benefit from growth drivers that are much more meaningful than any execution.”
Wittenborn: The US has a higher caliber of venture investors than Europe
“That being said, I've met many more investors that I'm impressed with in the U.S. Than in Europe, right?”
Wittenborn: Paywall display frequency is top driver of subscription conversion
“And so what Superwall is doing is optimizing paywalls. And so one of the learnings that we have from that is that the number one indicator for driving conversion is how often do you see the paywall, right?”
Wittenborn: VCs Dislike Consumer Subscription Until Tens of Millions in Revenue
“Because people don't like consumer subscription until it does tens of millions in revenue.”
Wittenborn: Existing consumer subscription apps will win most value from AI
“The way I think about it from an adjacent perspective is we're going to have companies that are already consumer subscription companies that are implementing this to make their products even more sticky, more functional and give features that were not possible…”