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- [00:01]
A
Welcome to the Sub Club Podcast, a show dedicated to the best practices for building and growing app businesses. We sit down with the entrepreneurs, investors and builders behind the most successful apps in the world to learn from their successes and failures. Sub Club is brought to you by RevenueCat. Thousands of the world's best apps trust RevenueCat to power in app purchases, manage customers, and grow revenue across iOS and Android and the web. You can learn more@revenuecat.com let's get into the show. Hello, I'm your host, David Barnard. My guest today is Kenneth Schlenker, co founder and CEO of Opal, the focus company. On the podcast, I talk with Kenneth about why retention is the only real moat, how dropping paid conversion from 20% to 9% increased revenue, and why he sees the rise in competition as a net positive for Opel. Hey Kenneth, it's so great to have you back on the podcast.
- [01:11]
B
Thanks so much for having me back.
- [01:13]
A
So we've got a lot to catch up on. Last time we spoke, you were at 5 million in ARR. You since shared that you hit 10 million in ARR pretty soon after that. So you were scaling rapidly. I now hit over a million daily active users. So I mean, the app has just been taken off, so I wanted to talk through some of that with you and see what it's taken to get there. So, yeah, tell me first about what it took from last we spoke at 5 million to get to that 10 million.
- [01:46]
B
Yeah, it sounds now a long time ago, but yeah, we had a great conversation last time. We're really the process of scaling with at the time a hard paywall and we got to scale pretty efficiently with a small team. I think we reached $10 million annual career. We were like 11 people back then. But after that what happened was we weren't growing as fast as we'd like in terms of users. And for us, what really matters is to be able to create a product that can be used by lots of people because we're addressing this massive issue. And so we stopped focusing on revenue, really focusing on what product can we build that can be a billion user products. And so that's the trajectory that changed. And happy to talk about the stuff that we've done to get there.
- [02:36]
A
Yeah, one of the things you just did a great talk at Tokyo App Growth Annual last week and you and I got to hang out a little bit in Tokyo. One of the things you shared in that talk was that you had a mind mindset shift from efficiency to company building. Tell me a little bit about that.
- [02:55]
B
Yeah, you know, I think this is maybe a counterintuitive take, but you know, you, you read a lot today about the billion dollar, you know, one person company. If you buy into that, basically someone, you know, AI can just, you know, VAT code their way into to getting to, you know, 10 million 20 million, $100 million in revenue and then, you know, create this massive company. I think that's a line. I think that actually the companies that actually do reach a billion people and billions of valuations, they need more than one person. They actually need a team. You need a brand, you need retention. And AI can be used to kind of improve the value that the product gives to users. And then and only then, I think you can really kind of create massive, massive amounts of value. And so, yeah, I think that was the topic of the talk which I gave at the conference. I think a lot of the apps that we see today that are coming online, and I love the entrepreneur kind of renaissance, we're seeing lots of people, they're being able to create new stuff, but I think also it's important that people understand that there needs to be more than that to be able to build massive companies. And so that's the shift that we've been on where, you know, what we want to do is we want to make sure we can create a product that is on path to be a billion user products. And so, you know, starts with a team like figuring out the right kind of team, building a brand, building a product that has a lot of retention and then figuring out how to actually use AI to improve the value we give to users.
- [04:30]
A
Yeah, a quote from your talk that I really loved was teams create product sole. You can't vibe code a brand. I love that. What's your thinking there?
- [04:41]
B
Yeah, I think maybe sometimes people think that apps are just like tools, but actually people want to connect with the apps that they use. They want to feel something. So the brand is super important. I think some of the best apps out there have this soul in them and I think that in order to have that soul, you really need people that are really caring about this. And it doesn't have to be a lot of people. Some very small teams create really soulful products. But I think that a recipe for failure in my mind is just to create something that has a function which AI does really well. You can basically create note taking app, you can create calories, you can write whatever you want, that's just a function. But you need more than that to be able to be successful. In my mind yeah.
- [05:32]
A
And one last AI take before we move on back to more Opal specific stuff. What are your thoughts on people saying AI is going to eat all of consumer apps? You've seen this competition in the screen time space is huge. And then AI has unlocked the ability to spin up a screen time app quicker than ever. And that's actually a popular category that I see a ton of indies launching into. So how do you think about the way that's going to impact Opal's business? And then how do you think that's going to impact the app economy more broadly?
- [06:11]
B
Yeah, there's a lot of. There's a lot of screen time apps. You know, since we went on the podcast, actually someone came to the conference last week and woke up to me and said, you know, that she was super inspired by Opal and I've created her own version of a screen time app. And I think it's one of the kind of very popular categories these days. The thing is that you. First of all, I think the way I see competition is, I think that it's actually a net positive for us. I think what it does is it helps more people realize that this problem is real, educate the market, get more people to use apps. And there's 5 billion people in the world that have a smartphone and maybe today probably give or take a few dozen million that have used the Screen Time app or using a Screen Time app, so they're still kind of massive opportunity to grow. I think the challenge is problem is that when a lot of these apps are actually kind of copying existing stuff, so instead of trying to build out new categories and kind of reach out to newer kinds of people, they're limiting themselves by just copying what exists. And so in my mind, the biggest challenge for screen time is if I walk down the street and I talk to 10 people in any city, it could be in Texas and New York, wherever it is. And I ask people, random set of people, like, do you spend too much time on your phone? Everybody will say yes, or maybe 8 out of 10. But then the next question is, there's an app. Would you download this app to help you today? You'd lose a lot of people. Because a lot of people say, what do you mean an app? To what to do? How do I manage? How does it help me manage my screen time? Is it going to be blocking apps? That's crazy. That's not really something that I want to do. And so the problem that I think we need to address as a category is how do we actually Create something that these people can use. That's not what Opal already does, but that's other things. And that's really what we're trying to build for Opal, which is figuring out how we can make it so much easier to use a screen time app, no setup required. And that it's not just about restriction, that it's really about being able to kind of coach you in your day to day. So that's kind of a long winded answer. But I think that I applaud competition. I think it helps educate the market, but I think it's also the opportunity is much larger and it's going to require innovation and new kinds of apps and completely new kinds of UI that you're probably not going to get by just typing in cloud. Like make an Opal copy in five minutes. Right?
- [08:49]
A
Yeah. And we've seen this play out for years. Even without AI coding, it's not that hard. The engineering side is a lot of hours, but it's not some insurmountable thing and it never has been. And so you look at some of the big categories like language learning, Duolingo, despite the recent setback in its stock price, is still a multibillion dollar, making over a billion dollars a year. And then you look at that category and there are just so many ads and huge ones, you know, Babel is massive, you know, right up there nipping on their heels. And so I think, you know, for the broader industry and then for Opel specifically, you're still going to have category winners like Opel that are like the brand in the space, even if there are hundreds of apps that do the same thing. And to your point earlier, it's like, yeah, you can copy Opal pretty or easier than ever to copy aspects of Opal, but you can't copy the soul. You can't copy the taste that went into it. And as people experiment with these apps, they'll probably be hungry for more and then go looking for the best app to do it. And I think Opal as kind of the leader in the space and as you've grown the team and improved the product, it just becomes this momentum that isn't going to get stopped by 200 more people. Vibe coding another screen time app.
- [10:20]
B
Yeah, I mean, I can I bring you in my next investor pitch? I love that. No, I fully believe it. And then one more thing is, you know, we talked about what happened, you know, since the last podcast, and one I think I mentioned is, and we had a hard paywall. Now we're Truly freemium. So we give away the product for free. And that's also something that I think is very valuable for us in the long run because we're getting to a point where we passed a million daus, as you said, and we're growing really fast. And it comes to a point where people have heard about the app and they hear it from their friends, and we see a lot of interesting dynamics of students that are using it together. We see interesting dynamics also in the family world, where you have maybe a teenager in the family that's using the app and actually recommend it to their parents all the other way around. And so all of that makes our position stronger and activating these network effects. And it's really powered by freemium. And I think that's why I'm very confident in the future of consumer apps in general. I think when you have a great product that has retention, that has a great brand, you're in an excellent position. And I think what you can do on top of that is we can, you know, use artificial intelligence to actually improve this product. And by improving this product, what I mean is not selling, just moving the metrics. It's really like, how do you actually really improve the value that you give to users? And if you're very confident, the value that you give to users, whether it's like giving them time back, which is kind of what we do, or making them more productive, whether it's, you know, helping learn language, you can actually use AI to make that better, and that really will make your product a lot, a lot stronger. And so I think, you know, it's interesting. I'm sure you see this all the time, maybe in the public markets at least. You know, the apps software, SaaS, of course, and also some consumer software is getting really punished by the market to say, hey, they're not kind of a native. But I think that it's a bit of a. I think it's a misunderstanding of what consumer apps really are. It's not just a function. It's also entertainment. It's also something that people like to do and something that people love. And so you can't just replace that with an agent or something else that does it automatically.
- [12:43]
A
I wanted to dig a little deeper into the switch to freemium, because that was a big deal for Opal. You shared a slide in your presentation showing that your download to paid dropped from 20% all the way down to 9%, which sounds super scary to have your conversion more than cut in half. But why. Why did that ultimately end up being good for the company?
- [13:09]
B
No, we did that. So we gave it away, the product for free. And you mentioned that our paid penetration, so that's how many people are paying subscribers within the monthly. Active users, you know, went from about 20% to 9%. And that's scary when you, when you see this chart. But it was the right decision. The reason it's the right decision is because when you give the products away for free, the people that are using the product become your marketing. And so what we've seen is a consequence is also a shift where we have a lot more organic growth than we ever have. It's massively increased. And, you know, what we're able to do is we're able to kind of accelerate this organic growth as well with some features we can talk about. Another thing that we've seen is, as a consequence of freemium, is that we have a different kind. We have a new kind of user. We have a new segment that exists. I mean, we started with a segment of, I would say, professional pros that are interested in productivity, people like you and me, people probably listening to this podcast that care about their time and place. A high ROI and saving time. That was the initial segment. But making the app free really helped us unlock students as a second segment. So high school students and college students who are now 2/3 of our DAUs are our students. And what it does is not only it's great for our mission because we know and we really want students to be able to build these healthy habits, healthy digital habits in their day to day. So that's great for the mission, but it's also great for organic growth because students talk about it. And what this also allowed us to do is now we're entering kind of a third segment that's being unlocked where students basically, especially in high school, are telling their schools, hey, instead of taking the phones away while we're in school, why don't you work with Opal to be able to create a phone policy? And so now we have also this kind of third segment with schools that's opening. So what I would say is I think that the freemium strategy is really helpful to be able to kind of grow organically and also kind of unlock new segments that aren't necessarily people that will actually pay upfront for products. And so it depends on what you're looking for as an app founder, whether you're trying to build lifestyle business, but if you're trying to truly create a product that has the potential to get used by, you know, hundreds of millions of people or billions of people, which is really what we think we must do because of the size of the problem we're facing, then I think freemium is a really good strategy to get there. Yeah. So to sum up, we. We've seen a decrease in our conversion to paid, but we've also seen as a consequence of that, an explosion of our DAUs, and so, you know, and revenue with it. So it's a short term, you know, scary drop. But what, what happens in the long term is that payback pays back tenfold.
- [16:05]
A
That's amazing. Another thing you did share in that presentation is a question you ask yourself of where to draw the line in freemium. And I think this is a little counterintuitive, but I think really important to dig into. So you said, would a non payer recommend the app if no. Give away more. Why?
- [16:28]
B
Yeah, I think if you want the freemium dynamic to really pay out, you need to make sure that the free users are recommending the app. Otherwise that doesn't work. I think that's a good way to measure the quality of your freemium product. You got to figure out whether free users are going to recommend the app, and I think that's an issue. A lot of apps I see where they're just kind of giving away small amounts or maybe it feels like a trial and then it's kind of recapped. If you do that, you're probably not going to benefit from the organic growth potential of freemium.
- [17:06]
A
Yeah, totally. It's a tough balance of what to give away and what not to. Were there any, like, specific tough calls that y' all made where it's like this really could should be behind the paywall, but like, it really is such a good part of the experience that we don't want to take it away from the free users. Like, what were some of the hard decisions and did you have to reverse any? Like, did you make make a bad call and then reverse it or how did things go on determining what went into paid?
- [17:31]
B
Yeah, I mean, we've made a lot of. Made a lot of mistakes and some success. I think the core is to measure, experiment and measure two things. So the LTV of installs, so how people are converting and paying, and also to measure the retention overall free plus paid. Right. And so you want to make sure that you can find the sweet spot where you're increasing both. It's really hard. We have this feature called Blocks. So basically it's. You're blocking apps from 9 to 10 on Monday to Friday, you're blocking social media, for example. And also it could be you put together, like an open limit. So that's. I can only open Instagram 10 times during the day. And so each of these are blocks. And so, you know, we've experimented with, you know, how many should we give for free? You can have one or you can have two or three or four. And I think today it's actually three. We've tried many different approaches, all the way from, like, having just one, which is pretty restrictive, and offering more. And turns out that three is enough for free users to get great experience. They can actually really use that app, try out a few different things, and then also, you know, really kind of power users that are convinced will pay because they want more. So that's one where it kind of worked out pretty well.
- [18:52]
A
No, that's a great example and maybe a way to think about that. Yeah, it's like, the people who are going to be the heaviest users, what's the thing that's most important to them? And then throttling it to where the free users still get a great experience is interesting. And AI is making this so tough with freemium, because you almost can't give things away. And it's hard to do a freemium app. Like, I'm been Vibe coding this app on the side, and I'm working on this kind of AI coaching feature, and golly, it can get super expensive. And at first I started out like, oh, I'm going to use Opus 4.6, because it's so much better. And then I was like, oh, maybe I'll use Sonnet. And then I was like, oh, maybe I'll use Gemini Flash. And it's tough these days to really draw those lines and create that great Freeman experience, especially if you're using AI. But even if you're not using AI, it's just such an important place to really be thoughtful and to do some experimentation. Like you said, you didn't just land on three by magic, guessing it or whatever. You tried one, you tried five, and you figured it out. And I think that's what people need to take away, is you just need to try it. And for me, like, vibe coding this app, like, I need to see how users actually use it, because maybe I can, you know, get away with a better model and more coaching and things like that. And. And maybe I can do a freemium tier, but I don't know until I actually get it out there and start testing it.
- [20:25]
B
Yeah, I mean, with AI, I think, you know, it changes the equation because you're, you're of course paying for the service of using. If you're using a server side model, you're paying for that. So you need to make sure that the value that you're creating is actually higher than of course, the cost that you incur. And I feel like a lot of people, I think at the beginning now in this way too, the value is so cool of all these tools. You're just going all in and building incredible stuff. And then there's probably a second phase which is, wait, does it make economic sense actually, can I charge enough for this? Are people actually winning? Is it good enough that people are willing to kind of pay for this on top? So it's a different kind of reality, I guess, than when you were just making an app that doesn't have actually this kind of marginal cost on top of it. But yeah, coming back to, I think AI the interesting, it's massively valuable obviously, and we see some incredible things. And like everyone fully using a lot of these tools. I think that every consumer app is about to have AI, you know, whether it's fitness app, whether it's learning app, finance app, screen time app too. But I think the question that maybe people need to ask is, you know, how do you actually build an AI that's on your user side? And what I mean by that is how do we actually build an AI that actually helps deliver more value to users? And I think that today there's not enough people doing that. And so it's not so much about, I think, using AI to maybe trick users into doing something. I think it really has to come from what is the exact core value of why people are using my app and how can I make that a lot better using AI?
- [22:18]
A
Yeah. I'll quote your presentation again since it's all so top of mind. I haven't done a podcast where I actually saw the podcast guest speak so recent to the podcast. But it's kind of fun because I can quote you back to yourself from the things you really nailed in your presentation. You said if your user wins, you win. That's it. I love that quote.
- [22:41]
B
Yeah, I mean, I think it's, you gotta, I think it's important to remember that you can kind of get caught up with all that it can do and you know, add some fancy features to the app. But. And you're going to get, if you do that, you're probably going to get a lot of early adopters. People are excited about AI right now, so they're trying a Lot of stuff out, but really, to really have lasting value, you need to figure out how to make your users win. That's the hardest part, but it can be amazing. There's definitely lots of potential there.
- [23:11]
A
Yeah, it's just such a great framing and, I mean, this is how you should think about every feature. Does this feature make my user win? Does it improve their life? Does it enhance whatever they're doing in the app? Really thinking deep, deeply about how each of those features impacts the user experience. Such a great way to think about it. You mentioned opwl for schools. I wanted to go deeper on that. Was this something that happened somewhat organically of students using it and them requesting schools? Or did you strategize, like, hey, this is a great, almost like B2B opportunity we can sell to schools. We can expand the footprint? Like, how. How did that come about totally organically?
- [23:53]
B
I had made fear that, you know, one day maybe we'd work with colleges, but working with school stick. High school was not something that I thought about. But what happened was it started last year. We literally got an email from a high school in Los Angeles, Harvard, Westlake, that essentially what happened is they had asked their students, basically, the state is telling us we need to ban phones. What should we do? And students got back to them and said, well, you know, we all or many of us are using this app called Opal. We're using it on our own. You know, no one's telling us to do that, but maybe you should reach out to them. And so they had reached out to us to see if we could do something together. And we found that, you know, it was interesting actually to do that. And so the way what we've done is we've built Opal for schools. What it is, is it's a phone policy that schools can use to help their students focus and thrive. And the way it works is the students download the Opal app, and then when they walk into campus, when they walk into school, the band apps are blocked on their phone, but they can still access the apps that are authorized, which is often being able to text mom and dad, but also educational apps. And so, for example, in some circumstance, in some cases, school would say, you know, chatgpt is a. Is. Is can be used. Or, you know, this specific kind of physics apps, this calculator app. And the interesting part is that, you know, when they leave school, instead of, you know, just being headed back their phone and being able to go and just like, binge on social media, they still have the app. And so what we see is like a lot of students are actually still using the app after school to set up their sleep schedule to be able to do focus timers and study. And so it's really kind of a not a bell to bell solution, but a bell to bed solution. It's kind of a full cycle. And so yeah, we've tried it with one school and now we're actually kind of scaling it across the states with many high schools around the US and so it's really become a very interesting new area for us. Not only because again, super aligned around mission. We really like that. I think it's a whole chapter we could open. But it's a much smarter way to actually do phone and policy. Rather than taking the phones away, we're actually kind of teaching something to kids to get a tool that they can use after school. And from a business perspective it makes sense because it really helps position Opel in the family. People talk about it on the local community level as well because every student uses it, so helps a lot as well. But yes, it's a new kind of distribution for us that is super interesting and extremely mission aligned because we need to make sure that education is still and continues to be an important vector for progress and we can be a part of that.
- [26:49]
A
Another aspect to it too is that those students will eventually graduate and become professionals and want the tools and no longer have it provided by the school. So it's also kind of like growing up that next generation of pro users who are professionals, who can afford the more expensive tier and stuff.
- [27:08]
B
I was very impressed. I remember my college days when our college library, they used to have PCs and then they kind of did a renovation and all of a sudden they had 100% Mac everywhere. This kind of newest, kind of beautiful Mac that had been I guess practically given away by Apple to kind of be present in college. And yeah, I think obviously from a business perspective, it makes sense to make sure that the next generation knows about the products and can use them and loves them. And I think that in our case, of course, that's part of the value. And I think it's also aligned with the fact that we do need the next generation to learn to build these skills to build healthier habits than the previous generations. And so it works together.
- [27:57]
A
That's awesome. And a great counterexample here and something you said in passing is that the students need to love it because my kids all have now Chromebooks that the schools hand out and they are terrible. My kids will never buy a Chromebook they beg to use my laptop. We do have an imac home. Imac. And so if you're going to go that route, you still have to have an amazing product because that's what actually generates the word of mouth rates. I mean, so much what you've been talking about is like having that core product, the core brand, and that's how it actually pays off.
- [28:34]
B
So yeah, I mean, and it's been for B2B2BC. Basically we're really focused on people like B2C, you know, like making sure that we have the best possible app, that people love it. And it turns out a lot of students are using the app and actually love it on their own. Again, it's not something that people tell them to do or their parents or their school. They use it on their own. But we're also happy to have this natural extension working, working with scrolls. But for me, the compass is always how do we build the best possible experience for the user, make it fun, make it motivating, make it as easy to use as possible. And so as long as we do that, we'll still be able to make sure that the next generation wants to use the app as well.
- [29:14]
A
Are you able to share in broad strokes what that financial arrangement looks like? Are schools actually paying per student for this or are you just giving it away for that eventual benefit?
- [29:26]
B
We do charge schools for deployments and using this service, a per student fee that is very competitive compared to alternative solutions. But we do charge, we do charge schools. But for sure the benefit for businesses expands way beyond, way beyond that revenue. And that's why we're able to kind of charge cheaper prices to schools because of that kind of other value that it brings to the business.
- [29:51]
A
Yeah, that makes it a whole new like world for a consumer app founder to be writing contracts with school districts. And like, are you ramping up a sales team or how are you handling that?
- [30:03]
B
It's not totally new, but we have someone excellent that's in charge of the team. Andy Bennett, who is head of Opal for schools and he's been talking to and partnering up with so many different schools. He was at south by Southwest Eduardo a few weeks ago doing a presentation there with a lot of educational leaders, talking to press. We recently like front page news on the LA Times for actually the fact that we now have one of the important private schools in Los Angeles that's using the product and many others. So yeah, it's a whole new world. I think it kind of works though, very, very well together with the Consumer product.
- [30:42]
A
I love to see it. It's so cool to see consumer apps kind of expand beyond consumer base. You know, seeing. Yeah, apps like Calm and Headspace years ago doing partnerships with insurance companies and, you know, Calm, I don't know if they're still doing it, but, you know, they had like a section in CVS that was like the Calm Shop, like a few shelves where they had like sleep gummies and like sleep masks and things like that. So it's just really cool when you think about these consumer apps as a brand, as something bigger than just the app. There's just so many opportunities, and I think it's cool to see all the different ways things that start as consumer apps actually end up monetizing in so many different ways. And I wouldn't have guessed schools, but. And it probably makes sense for more apps out there to expand that way if they're really able to provide value to students in school districts.
- [31:36]
B
Yeah. I mean, I think when you have an app and people love it, first of all, you're able to touch so many people. Right. Like millions of people, literally. But more than 10 million people download Opal. It's a massive amount of reach and there's a lot of adjacent things that you can do in your segments like we talked about, but also new products that you can maybe, maybe sell to them as well. Right. But you know, for us, really, the journey has been the initial product market fit was on professionals that are increasing. Our policy is still a big part of what's of our customer base. And then we expanded to a new segments with students as we opened up up freemium. And then we have this kind of new segment as well going into the education world. And I think that when you look at screen time overall, and that's why I'm super optimistic about there's competition, but there's also so much space with like 5 billion people with a smartphone. And every single person needs help on managing their screen time and building these healthy habits. But you also see other segments that are possible that are more kind of health and lifestyle segments, similar to what oura, I think, and Whoop have done in the health metrics measurements. But screen time is also a big, big part of people's health and so health and lifestyle. So this is also a massive one. And beyond that, I also think that as more and more research is showing the impact of screen time on health, the impact of screen time on productivity, you're also going to get insurers that are going to take a big part of this you're also going to see employers that are going to want to build tools or buy tools or license tools for their team. And we believe that that's why it's so important to actually build the most loved and the most important brand in that category, because a brand can travel. You know, when you have a great brand, you can go from one segment to another to another and build a billion user products and billion user category, which is what we're working on.
- [33:36]
A
Yeah, you've brought up brand a lot. I wanted to dig a little deeper in that. What are some of the key things that you think, you know, make the Opel brand? The touches in the app, the name itself, the design, the feel like, you know, how do you classify or quantify brand for Opel?
- [33:58]
B
Yeah, I mean, there's a lot of things, you know, we. The company started with a manifesto, actually, that I wrote before, like building a product. It was really more like thinking about, you know, what is going on here. You know, we've got trillion dollar companies and they're stealing people's attention. And I've built this technology that everybody uses every single day. Technology is really good. But because of this business model and because of the companies they're building, the technology used by people, we have the outcomes that we know, which is overuse of screens, etc. So the manifesto is basically saying we can change this and we can actually design products differently to benefit of all the great stuff that technology brings to people, all the good stuff, but also weed out the bad. And so we kind of started with that and then the product was kind of a consequence of that. And yeah, the name is an important part of our story. Opal is a gemstone. That's why you get all these gemstones inside the app in internal marketing as well. And Opal is actually also the reason I chose this name is that it was striking to me that phones are basically something that you touch all day, every day, hundreds of times per day. And so what are phones? Phones are made of basically glass, aluminum, all sorts of different kinds of components. They're electrically charged. They tend to be warm because of what's going on in it. And so I was thinking about, like, what is the exact opposite, you know, from a tactile perspective to a phone? And that's where, you know, gemstone kind of came up. And Opal in particular, Opal is a gemstone that's set to calm the mind. In particular, blue Opal. It comes in different variations. So. And it's also very, very precious. Gemstones. That's the reason why, you know, the name happened. So it's not random. There's a real reason why it's opal. And then the whole product experience is centered around the fact that the more you focus, the more you kind of unlock these opal gemstones with different colors and different shapes. And we put a lot of effort to kind of basically, it's constant debate in our team to basically make sure that the entire experience revolves around these gemstones. And so that's obviously one of the things, the most loved interaction in the app, which sounds completely stupid, but the most loved interaction is that unlocking of that stone. Like when you get granted a new gemstone because you've passed a new milestone, you use the app for a certain amount of days, for example, you get to kind of tap to crack the gemstone, and that's the most flawed interaction. And people really remember this, talk about it, and really helps build the brand because this is what the kind of things that people remember. Another example is we try to do more things that are kind of unusual or companies might not do normally. We have these stickers. I have one on my phone here that says scrolling kills. It's kind of like a PSA public service nominal. Actually does not mention opal, which is also controversial take, but we've distributed thousands of them to our customers, to users, and we even bought like this massive billboard in New York last year with the message scrolling kills. Because we want to be. We basically, we want this message, we want this conversation to happen, and we want to be. We want to be the company that helps. That helps make these changes. And so that's another example. And, you know, there's many, many small, smaller details inside the app in how we do marketing, partner with creators, partner with different artists that help, I think, kind of build that brand and make it strong.
- [37:40]
A
I love that gemstone interaction. And I was able to watch the video of that interaction in researching all this, and I imagine that was very costly to make. Like, a lot of effort went into it from artists and from programmers to, like, get that interaction dialed in. But I think more apps should find ways to have those little magical moments, those little touch points that, like, make it feel special, that, like. And this is maybe an example of kind of what you're saying about, you know, using technology for good. You know, here you're almost dopamine hacking, in a way. It's like, it's special, you know, it's encased in a rock. You don't know what it's going to look like you tap, and then it breaks open and it's like this reveal mode moment. I'd imagine there's haptics and audio and other things going on. And so it is kind of a dopamine moment. But just like you're using that as a reward for them, actually, like being more present and not using their screens as much. And so, yeah, I think folks listening to this should think about ways in their product to create those kind of magical moments, because it really is so magical inside. Opal.
- [38:53]
B
Yeah. Thank you. I appreciate it. I mean, it's tough to decide to invest in that kind of thing because it's not really measurable, and it's not. There's always like, 50 other things that you need to do that seem more urgent, bigger features or bug fixes. And so it's kind of difficult to make the decision to say, wait, I'm actually going to invest, like, whatever, you know, a few weeks building this thing and doing it right. But in the end, that's what people remember and that's what the brand really is built on those kind of smaller details that feel unreasonably sophisticated. But actually, it did bring magic to the experience.
- [39:30]
A
A few minutes ago, you mentioned that Opal had had over 10 million downloads. You didn't say over 20. So I imagine it's somewhere in the low, above 10 million. But then, as we talked about earlier, you have over a million daily active users, which kind of clued me in that you have some pretty awesome retention. How do you think about retention and how's that gone for Opal?
- [39:52]
B
We do have great retention. For us, the way we look at it is we need to make sure that we can. That you can do. It's easy enough to kind of go on a detox for three days and change your, you know, kind of say, okay, I'm going to put my phone away for three days, which, by the way, is a start. But it's really difficult to do it on the. On the long run. And so that's what. That's why retention is so important to us, is actually, like, to be able to change habits in the long run. You really need people to be able to stick around. The way we think about it is it's definitely like, become the core. The only way you can really grow your users. And we saw how important that is to have organic growth. The only way you can grow your DAUs is basically having great retention, obviously. And so it's really something that has been super important for us to crack. And so we experimented a lot of tests to be able to figure out what drives retention. It starts from the initial onboarding. What do you actually onboard people too? Yes, retention is super important. We're definitely today in the top rank, I would say, in terms of early retention, day one to day seven, on par with or better than companies like apps like Duolingo or Spotify or Strava. And I think the challenge for us is today is really how do we actually, we've got this, I would say, niche of people that are motivated enough to build healthier habits with digital technology. There's a few millions. We talked about a few millions. But really what I'm focused on today is I'm thinking about, you know, how do we actually get the next hundred millions and get this kind of billion user product? And that really, to me is about making it way easier to take the first step, making it way easier to get the benefits without having to have so much commitments. And so that's really, you know, I know this podcast talk a lot about what we've done last year, but I'm spending a lot of time today thinking about what we're building in the next year. And that's really what we're thinking about today.
- [41:53]
A
I'm going to quote you back to yourself again because this was just so good. Retention is the ultimate proof of value. If a user comes back, you're creating something real. If they don't, nothing else matters.
- [42:04]
B
Yeah, that's true. You know, it's you. And again, I think the reason I was saying that is because if you look at X today or Twitter, you know, you're kind of like always, you know, you're talking about revenue, revenue, revenue, and people kind of quickly, you know, growing their mrr, which is great. I love revenue cats. I love revenue too. But, you know, I think like, retention really is the only way to have lasting value, is the only kind of real moat. And it's two different things. It's one thing to be able to convince someone to try out a product and to pay for it at the beginning, but it's another thing to be able to get people to actually stay for a long run and create lasting value. And I think that by the way, I started the Opal journey started with just this first part really clearly at the beginning, that's what you should be doing. But very quickly it's also about how do you actually build like lasting value? And the only way to see that is retention, and that's how you measure it.
- [43:01]
A
Yeah, one of my colleagues was Saying that, you know, there are just too many apps launching right now where kind of onboarding is the product where there isn't like a real product, like it doesn't actually even do the things it says in onboarding. And it's just all about getting people to a hard pay wall, taking their money. But that's not, I mean that's just a short term arbitrage that's not building a real business because you know, they're not renewing over time. The magic of subscriptions and the magic of this business model is that those cohorts stack over time, is that I imagine with Opal, it's like you can look at those early cohorts from six years ago who are still paying you money and have paid it every month or every year. And when you start stacking those cohorts and as you get to year six, seven, eight, it's just incredible how that works if, if you have that retentive product and it really is, it's just that's how you build a real business versus just like a short term arbitrage, make some cash and then, you know, watch it all unwind.
- [44:02]
B
And I think it's probably unpopular to say because of, of what's, what's going on right now with you know, that the loudest voices are more about like kind of cash grab business. But I agree with you here. Yeah, I think that's why, you know, by the way, I think AI is truly incredible and again you can build amazing products that we haven't seen yet and I test so many, but you can build incredible products that really serve your users in amazing ways. But I think that today a lot of hype coded apps are in the other category which is basically being able to quickly create products that unfortunately have no retention, don't have a brand and are not really delivering value to users and that's not very sustainable. You need to make sure you have a brand, you need to make sure you have retention, you need to make sure you are delivering value to users.
- [44:56]
A
Yeah, such a great point. We talked about how you shifted a lot of user acquisition to organic and are getting so much more organic traffic. But I imagine you still do a ton of paid ads and actually I know that for sure because I do still get the one Opal ad that just crushes. It seems like your phone is a nuclear grade weapon aimed against you. It's really kind of a shocking and rightfully so, and it's true. But any tips for one, finding those kind of creatives that you can run for. I mean, I first saw it maybe a year or two ago, like, it's still running. So finding those creatives that just crush and can continue to go and any other kind of lessons and top learnings around paid ads recently.
- [45:42]
B
Yeah, I think, you know, by the way, I hate to kind of always bring it back to this, but I think it really comes back to the brand. Like, because we put so much effort into building a brand and building a product that is that brand, we were able to get this particular video. I want to kind of tell you the story. I don't think I've told it before, but it's kind of interesting. So we. We saw this video, actually, that I think a friend of mine sent. A friend of mine sent me this video. It was posted organically by someone, and it got a little bit, you know, a little bit of virality. Organically, it was. And I saw the video and I was like, this is incredible because it looks like it's an Opal ad, but it's not. And so, you know, I DM'd the person, actually, it was someone in my team, Marjolaine, who DM this person and said, I mean, we'd love to maybe license this video. And the guy wrote back and said, actually, like, I use Opal, and it was an inspiration for. Right. For making this video. It's kind of like back full circle. He didn't do it as an ad, but he said we kind of have to get people to change, and so we kind of need to. And it's a great filmmaker. So obviously, the video is amazing, and you have no idea what. How he performed. But we did ask him if we could use the video, and he said, yes, of course, as an ad. And so basically, literally, it is the organic video with the Opel logo attached. That's it.
- [47:09]
A
Wow.
- [47:10]
B
And it turned out to be pretty successful because I think it's seen today by dozens of millions of people. And interestingly enough, it's also not just an ad. It's a big part of our brand. And. And also it has value outside of getting people download the app. So we've heard a lot of people that seen the ad and that said they completely changed their habits without even downloading the app. So it kind of also has a life of its own. But since that, we've also partnered a lot with various creators that have made videos that are just organic videos that we've either repurposed or we commission new creative videos. But I guess we have kind of unique unfair advantage Here, which is that a lot of creatives, like actual people who are filmmakers or, you know, designers, actually are users of Opal because it's pretty popular amongst this group of people. So I think we. We get. We get a bit of an unfair advantage here of tapping into this community because they. They really care about this mission and they really care about our product.
- [48:13]
A
And you actually hired one of your users, right, and she now does videos just for Opal.
- [48:18]
B
Yeah, yeah, absolutely. We actually hired many of our users in our team, but this particular one, we are accelerating our organic growth in many different ways. And one of the ways we do that is we found this person who was mentioning Opal in a video on TikTok and thought she was great. And so basically we hired her and she's part of the team, and she's basically building an educational media for us. Her name is Olivia, and so the channels are called Olivia Unplugged. And basically she's educating people about topics around screen time and focus. But it can go all the way from how to make friends, because people don't know yet how to make friends anymore offline, to how to build a bedtime routine and all of these kind of different topics. And she does this in such an amazing way. And it's not an Opal brand account. It's like creator accounts that is powered by Opal. And so Opal gets mentioned in the videos and there's a link in bio. But I think it works. It works really well because we went from zero to, I think now 700,000 followers across different platforms and millions of views in, like, a few months. And. And it's not just like. It's not just about the numbers, because it's really relevant because the content is actually exactly like what the brand wants to say, and so it's very relevant.
- [49:47]
A
Yeah, that's so cool. Hiring. Hiring so many users and not hiring creators who were users and organically posting content, finding organic content, repurposing it as an ad. So many cool stories. We are. We are coming up on time, but there's three questions I've been asking every guest who. Come on. So let's. Let's get to that. The first one is, what's your biggest win of the last year? The experiment that performed way better than expected, something you implemented. What's your biggest win?
- [50:16]
B
The biggest win is streaks, believe it or not. We have our own way of counting streaks, but essentially, the more you focus with Opal, the more you get a streak. We've also put a lot of effort Speaking of brand and making this beautiful. So the streak is represented by this small flame, which is not like an emoji flame, but actually kind of animated flame. And you can get beautiful Opal gemstones once you reach kind of different streak milestones. So that's, I would say, the biggest win in the last year to improve retention and growth.
- [50:54]
A
Yeah, that's so cool. Streaks don't work for a lot of apps. So many apps try streaks. But it's great to hear, and it makes sense that it's landing for Opal. All right, what was your biggest fail of the past year?
- [51:05]
B
Yeah, I mean, what I would say is it's probably like. So we bought this billboard with that set, scrolling kills in New York. And okay, I would say it's a fail in the sense that we intentionally didn't make attribution really obvious. So it didn't say clearly, opal app.com or getting opal. So it's a fail in the sense that no impact on downloads, no impact on revenue. But that wasn't the point. The point was really kind of a brand statement. And so actually, and just I think to finish on that, we signed a school in New York, and the moment that we signed the deal, the head of that school actually didn't tell us that he saw the billboard. And because he saw the billboard, he actually was more comfortable signing. And so it's kind of those things that are not really directly measurable, but that do make an impact. So it's, I would say, like a half failure here.
- [52:01]
A
I just Googled that while you were talking, and when you Google scrolling kills, at least for me, pretty much everything that shows up is Opal related. And you have scrollingkills us. Scrolling kills, Opal saves. It's kind of cool to have this kind of secondary tagline that you can kind of, like, own almost like a. Almost a trademark of like, you created this phrase that you can just put on a billboard, and that even though you probably, like, you said you didn't. It didn't impact downloads, but it created an impression, and then that impression is tied to the Opel brand online, which is so cool.
- [52:39]
B
Yeah, no, thank you. I appreciate it. It's definitely why we did this. And we want to carry a message, right? That's, like, already that's important beyond just, like, downloading the app. Right. It's actually just like something that. That is important for society at Belgium. We kind of want to be a part of that.
- [52:57]
A
Yeah, that's so cool. All right, last question is, fill in the blank.
- [53:00]
B
Growth would be easier if families got involved.
- [53:05]
A
Nice.
- [53:06]
B
So I think that every single parent probably in the world today is worried or concerned about their children's screen time. The problem today is that it's such a conflict within the family. It's the number one conflict, source of conflict between teenagers, kids, and their parents. What we want to do is we want to change that and instead of conflict, make this something that people can do together, make that a collaboration. And so growth would be a lot easier if families got involved because we would be able to make sure that we get one person in the family and then everyone else in the family follows soon. And that's something that we're working on.
- [53:51]
A
Yeah, you're actually. Did you already launch or you're soon to launch a family feature? Because you told me about this last fall and I'm actually pretty excited about it.
- [53:58]
B
We're taking our time. We're taking our time, but it's coming very, very soon. Cool.
- [54:04]
A
All right, well, as we wrap up, anything else you wanted to share? You hiring, looking for more creators? Anything else our audience can do for you?
- [54:12]
B
We're working on something really, I think a big step change in the Opal experience this spring, actually. And so, yeah, what the audience can do is to watch out for the next big update. It's going to be pretty incredible. I'm really excited about it and share any feedback that they have to us directly on the app. That's always super helpful. Things that work, things that don't work, this is how we learn, this is how we grow. So really appreciate that. And I really got to talk David today. This has been amazing. Thank you for the conference also last week. This has been a great conversation. Thank you very much.
- [54:49]
A
Yeah, thanks for joining me. It was so fun chatting through all this stuff. And you have a very different perspective, like you said, than a lot of people in the industry right now. And I think it'll be great for people to hear. So thank you. Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.