Sub Club Podcast Episode Summary

Episode Title: Why AI Probably Won’t Kill Your App (But Ignoring It Will)
Guest: Eric Crowley (GP Bullhound)
Hosts: David Barnard & Jacob Eiting
Release Date: November 12, 2025

Episode Theme & Purpose

In this insightful episode, David Barnard and Jacob Eiting sit down with Eric Crowley, a leading tech investment banker at GP Bullhound, to unpack the evolving landscape of consumer subscription apps amid the AI revolution. They examine why fears of AI “killing apps” are overblown, how companies like Strava and conglomerates like Bending Spoons are changing the game, and practical approaches for builders to not only survive but thrive in the current app economy. Crowley draws on his annual Consumer Subscription Software (CSS) report to share data, trends, and actionable advice for founders and operators.

Key Discussion Points & Insights

1. Origins and Impact of the Consumer Subscription Software Report

[01:21–04:10]

• Eric Crowley shares the background of his annual report (CSS report).
• Noted early industry skepticism: "B2B SaaS, B2B SaaS, B2B SaaS. I said that's great but it's boring. And so I wanted to work with companies that I thought were fun..." (Eric, 01:58)
• Saw opportunity due to consumers being 70% of the economy; subscriptions became inevitable.

Insight: The CSS report has become a vital record for the growth and maturation of the consumer subscription industry, at a time when few investors recognized its potential.

2. Why Subscriptions Succeeded—and the Myth of Subscription Fatigue

[06:53–10:19]

• Products have improved, consumers have become more sophisticated, and fears of “subscription fatigue” are overplayed.
• "Consumers are not dumb... There’s so many tools now to make sure, hey, you unsubscribe to this or turn off that... you can’t trick people." (Eric, 07:42)
• People are happy to pay for things that materially improve their lives; portfolios of 10+ subscriptions are now common and likely to increase.

Notable Moment: The group discusses how some products (e.g., fitness apps) have become so interwoven into daily life that most people wouldn’t want to give them up.

3. Case Study: Strava’s Acquisition of Runna

[11:10–17:14]

• Crowley provides insider perspective on the rationale for Strava acquiring Runna:
  • TAM expansion: Runna serves aspiring athletes, while Strava caters to established athletes.
  • Bundling opportunity: Runna enables Strava to offer new product tiers and bundles.
  • Integration: Keeping Runna separate for now allows both to maintain high user experience.

Memorable Quote: "This was truly a one plus one equals six acquisition. Most people say one plus one equals three; this is way better than that." (Eric, 12:17)

• Takeaway for Founders: The best way to become an attractive acquisition is to focus on building a beloved, independent product—acquirers want strong user love, not just feature sets.

4. AI as Headwind & Tailwind: The “State of the Union”

[19:22–29:09]

Headwinds

• The most significant disruption: Google/SEO traffic is no longer the main user acquisition channel; users increasingly start discovery inside AI tools like ChatGPT.
• Attribution and measurement are increasingly complex.
• “Google... is now no longer the sole default. If you’re a builder or marketer... your job is to get your product in front of someone... and that fractured a lot over the last two years." (Eric, 19:56)

Not a Universal Threat

• Responded to "AI will subsume all apps": Unlikely in near/medium term; echoes of past warnings ("What if Google does it?").
• Apps with strong product design and consumer trust consistently carve niches, even against platform giants.

Tailwinds

• AI accelerates marketing and product development: Automates asset creation, enables rapid product iteration.
• Moats can be built by leveraging community, proprietary hardware/data, and exceptional user experience.
• “The combination of AI plus human insight to build a beautiful product is going to be the way to win long term.” (Eric, 32:03)

5. The App Store Regulatory Shift: Walled Gardens Opening

[32:46–39:45]

• App stores are loosening, forced by regulatory changes. More companies are building off-app-store payment funnels (web funnels) to retain more profits.
• "Every one of my clients... is building web funnels... Especially when you’re $100, $200 million in revenue, we’re talking about multiple million dollars in profit." (Eric, 33:17)
• The margin recoup is real, but less than 30%—often 15–20%, and it's not a fit for every app.
• Consumers’ comfort with App Store purchases remains a factor; “right business” fit is essential.

6. Opportunities for Subscription Apps: Where to Build Next

[42:13–46:45]

• Newly identified “category killer” opportunities:
  • Strava for pets: Pets are increasingly treated like family; movement/health tracking creates demand for premium services (e.g., pet insurance linked to activity).
  • Screen time management: Growing societal desire to control digital distractions; well-positioned for strong recurring revenue.
• Broader insight: Category opportunities are often where existing high consumer spend meets unsolved (or poorly solved) problems, or where new “trades” of time/money/health can be made more explicit with better tools.

7. The Rise of App Conglomerates: Bending Spoons & New Playbooks

[46:45–61:50]

• Bending Spoons: The “Berkshire Hathaway of the App Store”—operates on operational excellence and ruthless efficiency.
  • “They will buy an app or a business... and they will fire 97% of those employees within the first month. And just think about that concept... They are just lifting the business off whatever infrastructure and team was done, and they’re putting it onto their existing team." (Eric, 51:06)
• Analogy to Coca Cola’s brand portfolio: Doesn’t matter which product the consumer buys as long as it’s within their family.
• This model is hard to replicate; mere “rollup” financial engineering isn’t sufficient—requires top-tier marketing, tech, and pricing skills.

Key Point: The secondary market for apps is maturing, providing both new exits and new paths for ambitious founders or “builders of greenhouses.”

Notable Quotes & Memorable Moments

• "Consumers are not dumb... there’s so many tools now... you can’t trick people." (Eric Crowley, 07:42)
• "You can now subscribe to an app that helps you unsubscribe from other apps." (Jacob Eiting, 10:53)
• "If you make it hard to offboard, you’re going to get sued... make it super easy to onboard, don’t forget about marketing to those consumers." (Eric, 39:51)
• "The future will be built by those who combine AI’s power with enduring human insights and design, creating products that people not only use, but refuse to live without and choose to evangelize to their friends." (Eric, 32:05, reading from the CSS report)
• "This was truly a one plus one equals six acquisition." (Eric on Strava-Runna, 12:17)
• "I use ChatGPT 10 times a day... but I can’t think of a single app that AI has replaced for me." (Jacob, 25:32)
• "Anything worth doing is hard, guys. This doesn't change." (Eric, 62:05)

Timestamps for Key Segments

• Origins of CSS Report & GP Bullhound: 01:21–04:10
• The Growth of Consumer Subscriptions & Overcoming Skepticism: 04:10–06:53
• Subscription Fatigue Myth & Changing Consumer Attitudes: 06:53–10:19
• Strava x Runna: Strategy & Outcomes: 11:10–17:14
• Building for Acquisition (Adjunct Apps): 17:14–19:22
• AI Headwinds & The Fracturing of Discovery: 19:22–23:11
• AI Will “Subsume” Apps? Counterpoints: 23:11–29:09
• AI Tailwinds—Marketing, Features, Moats: 29:09–32:45
• Regulatory Shifts—App Store Loosening: 32:46–39:45
• Opportunities: Where to Build (Strava for Pets, Screen Time): 42:13–46:45
• App Conglomerates, Bending Spoons Playbook: 46:45–61:50

Additional Insights

• Regulation (Click to Cancel Law):
  The panel notes regulation sometimes lags best practice—top-tier apps already make subscription management and cancellation easy, but regulation could help clean up practices “on the low end” (40:53).

• Building App Moats in an AI Age:
  Community and strong design are as important as data advantage. “Combination of AI plus human insight” is key (32:03).

• Bending Spoons’ Superpower:
  Ruthless operational efficiency and the “greenhouse” approach (test many, scale a handful). It’s not about app-flipping arbitrage, but relentless focus on optimization and ability to unify under a portfolio brand.

• The Maturing App Exit Market:
  Selling and flipping apps is more viable than ever, but simply buying up apps doesn’t guarantee success—most rollups will fail due to execution challenges.

Conclusion

This episode is a must-listen for founders, investors, and operators in the subscription app space, offering nuanced, data-driven perspectives on AI’s real impact, the maturing nature of the market, new opportunities at the intersection of technology and consumer behavior, and first-hand insights about exits and app portfolios. Eric Crowley’s balanced, candid observations dispel tech hype while offering inspiration for what’s next.

[For the full CSS report, Eric invites listeners to reach out directly or visit www.gpbullhound.com.]