Show Notes
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Matthieu Rouif is the co-founder and CEO of PhotoRoom. PhotoRoom enables anyone to create studio-quality photos on their iPhone. Before founding PhotoRoom, Matthieu was the Senior Project Manager at GoPro. Matthieu is also the co-founder and CTO of HeyCrowd, and co-founder and CEO of As-App.
Matthieu earned his graduate degree in materials science and engineering from Stanford University, and his bachelor’s degrees in economics, and physics from École Polytechnique. While at École Polytechnique, Matthieu was a member of the skydiving team and debate team. Matthieu also served as a Parachutist Commando Officer in the French Air Force.
Matthieu started developing apps in 2009 as a student at Stanford, and subsequently started two iPhone app companies. He was part of the Replay app team when they won App of the Year in 2014. Matthieu started PhotoRoom after leaving GoPro in 2018.
In this episode, you’ll learn:
- Matthieu’s retention strategies for keeping app users subscribed
- Innovative and clever ways to get users to demo your app
- Balancing your app’s pricing and features
- How churn can be an asset
Links & Resources
Matthieu Rouif’s Links
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Episode Transcript
Hello, I’m your host, David Barnard. And with me as always, Jacob Eiting, RevenueCat CEO. Our guest today is Matt Rouif, co-founder and CEO at PhotoRoom, the app for removing backgrounds and creating studio quality photos right from your phone.
On the podcast, we talk with Matt about how his time at GoPro led to founding PhotoRoom, how churn can actually be an asset, and how being locked in Apple’s basement led to one of PhotoRoom’s biggest marketing wins.
Hey, Matt. Thanks for joining us on the podcast today. How are you doing?
Great. Hey David, Hey Jacob.
Hi, it’s nice to finally meet internet/virtual face-to-face. We’ve known each other for a little while. I’ve become fortunate to know you kind of through RevenueCat, but not actually know-know you. So, it’s nice to finally put a face to the name.
I was looking back through my email and I think the first I ever heard of you was from our mutual friend, Cisco, if I say that correctly?
Yeah, Francisco.
Francisco, who shared with me a blog post that I had seen that you wrote where you talked about RevenueCat as part of your stack. Since then, I think we talked as you were thinking about going into YC, and then after YC, I put in a little bit of money, so this is a good opportunity to check in on my investment.
I’m super excited to dive in, because there’s a lot of questions. I kind of have followed you guys and kind of seeing some of the stuff you’ve been doing, but I don’t know, like the behind the scenes decision making processes and like, and all that stuff. So yeah, I’m excited to hear the story firsthand.
Yeah, but before we get into PhotoRoom, you’ve got quite a history in app development. So, I want to go back to the beginning and talk war stories. A lot of people were in the industry way back when. Jacob and I both started really early as well. So, you got your start during the Stanford class and you were actually a teaching assistant at Stanford at the time, right? I’m kind of stealing your story, but yeah. Tell me, tell me how you got into it.
Yeah. Actually I wasn’t a teaching assistant in physics. I was doing a master’s in physics at Stanford, right at the moment of the first iPhone class. And, I actually went to Stanford because I was fascinated by the entrepreneurship. And I had this business idea of printing photos and sending them.
And that seemed a lot easier not to buy hardware, but just use the iPhone which just started at that point. So, I was at Stanford, there was the iPhone class. I wanted to do a photo app. So, see, 12 years later....
A 12 year overnight success.
That’s what they say. Exactly. And, yeah, I got, I actually, I got started, programming.
I was doing physics before, and I didn’t know anything about programming. So I took a class with a friend that went through the basics, and I just wanted to push products on apps. And I found that the iPhone was the best at that point. And actually the photo app became something else.
The first company I started back in grad school and they became like a ski resorts app. I shipped, we had all of the major ski resorts. And, It was a great, I did that for two years and a major ski resorts and, yeah.
I started an apps company after that, one called HeyCrowd around a social network. So like we had surveys that you could answer to with polls, like, a bit like Instagram stories now, and that didn’t work so well compared to the ski resort, but, yeah, I got into iPhone apps right since the beginning.
I remember the Stanford course. It was on iTunes U that was mass disseminated or was it the later one?
No, it was the one that it wasn’t Stanford U. There was a, the guy from Fitboard during the class. I don’t know if it was doing that.
Yeah. I remember. I remember it being like the moment when we were like, oh, this is going to go mainstream. Right? Like, because up to that point, you had to learn iOS by doing basically Mac OS. That was like the one point there was the big nerd book you learned Mac OS, and then the SDKs came and you like tried to learn quickly, like what worked and what didn’t.
But, if you were like me who came from no Mac programming, there was really no iPhone entry into it. I remember when the Stanford course came out. It was like one year too late for me. Because like at that point I had already done a lot of stuff, but it was still really great.
I still watched the whole thing. I remember watching it. But it’s interesting. We have the same path. I don’t know if we ever talked about this, but I was studying physics in undergrad as well. Yeah, I didn’t go to Stanford, but I went to a small state school instead, just cause, you know. But yeah, kind of similar story where like I was in, I wasn’t in grad school, but I was physics, undergrad.
Didn’t really know what I wanted to do. I really loved physics and the math and all that stuff, but like, there’s a stronger economic pull, let’s put it that way, to work on apps. That was the same story for me. Like took a little bit of what I had learned, writing code for experiments and things like this, and then kind of started making apps.
And then, yeah, the rest is history.
Yeah. I think one of the introduction to physics is like how fast data applies to the real world from science to real world. And you don’t find that in a, like a physics job where you kind of find that back in, like a software development where you like, can we solve a math problem, a computer science problem, and you can directly apply it to real
Yeah. Or like, even with business modeling and stuff too, you know, you think about how a business moves and like what number moves this number. And there’s no physics there. You’re not approximating a physical system, but some of the same principles apply. Right. You’re like trying to find some laws that are underlying it and work from there.
So yeah, I found it hasn’t been terribly unrelevant, but, but yeah, that’s interesting. What else, what else do we have in common? Let’s keep going.
Yeah, sure.
Well, actually, I, I want to jump in. I want to get to PhotoRoom, so we’re actually going to skip over. You’ve done a lot now. So after, after that you went to replay and replay was like onstage at a keynote. And you’re the co founders that you were working with, you know, as, as you joked, before we started recording, spent a month in the basement and apple, as everyone does before a keynote.
But then you ended up at GoPro working on imaging. so just tell me about that. Leaving GoPro. I mean, Great company done a lot of innovative stuff. but tell me about leaving to start a PhotoRoom and what the inspiration, I guess we’ve heard part of it, you know, 12 years of working on imaging and wanting to build a photo app.
But yeah. Tell me about the founding of, of.
Yeah, I, I, so GoPro is an amazing company, but it’s more marketing and hardware. And, I really wanted to, I grew a bit frustrated about like how we could, do better software. Yeah, a few frustration from that I, as a product, I was product manager by them. So I was like frustrated with the design tool, like a Photoshop and, and, you kind of have to move to, and by that time you had to move to California to move the stuff.
And I was based in there in Paris and I decided to stay there with the family and, and kind of, we had an amazing missionary team at GoPro in Paris, but it’s really difficult to. To change the paradigm of a kind of a software, like a, if it works from a kind of more deterministic way. So I kind of realize that it’s really tough to ship a new software with new paradigm, and we’ve mentioned our new insights.
So I thought there was a big opportunity with the new, new hardware coming on, the iPhone formation, learning the new, the new, yeah, this new kind of way of thinking about software. And, I left the GoPro to start a company and we’ve just ideas in mind. And I also, at the time realized that there was a. A lot of apps, you know, like after 10 years on the app store, you kind of know the tricks of the app store. And I knew there were a lot of apps in the top of the photo apps that were around razor and background eraser. I realized like, okay, if they’re just kind of a, you know, I say scam, but it’s certainly scam, but all these apps that are built quickly, there must be some demand around it.
And so that’s, I started with the background remover idea. Like I saw that there was a mission learning team at GoPro that there was some background removal, paper and all that. Okay. There must be some demand. Let’s ship something quickly and see how it goes. And that’s kind of the nice thing of like 10 years of development, you know, the right tool to go fast and just shipped a prototype in two weeks.
We’ve actually referring at, by then I have a blog post on like the 10 tools I use there and,
And, yeah, it was, it went super fast, super fast to the store and we have some machine learning and, on-device machine learning by then. So it’s as a, and it kind of caught up, like you tried a dozen ideas on some kind of stay on the wall on some, like, and just stay on the wall.
So at the time it was called BGE app background app. Right. was the focus initially, did you have like a big scope for it or was that your entry? You were like, Hey, I know that they there’s these photo apps that kind of suck that are doing this background thing. I think we can do it better. And like, let’s see where it goes from there.
Or did you have like a bigger plans or longer term aspirations?
I think there was, an understanding that people kind of needed that and the tech tech was 10 X better as they say. So it was really interesting, but I didn’t, I mean, we didn’t have the full plan for that. It’s really a few months in that we are understood with Elliot the kind of the market fit.
And we understood also like this idea of, and we call it, we translate pixels into concept that makes it much easier to, to, to edit. So w for the room is the best for digital for entrepreneurs. And the idea is that instead of using mask and layers and pixels, you just like, the machine learning, understanding what are the.
The big cells and they just tell you, okay. A cat. So we call it cat to catch up on the cat. And you should have actions that are relevant to a Catholic changing the fur color. if it’s, if it’s a piece of clothing, it should be the texture of the clothing. If it’s a, if it’s a kind of graphic change of color, you know, kind of, it makes it much more accessible than what exists in like 10 year, 20 years, software that exists by for the editing.
So, so yeah, I mean, I think that sounds like a very much a pitch and a story that somebody would be taught at Y Combinator. So I’m curious, like what I’m curious, like, how did that evolve? Like how so you, you, you, you guys launched the app in the, I remember I was talking in like the spring of 2019.
Yeah. Like may 2019.
Exactly.
And then, you started YC in the fall or the winter?
Yeah.
No, we actually, so we started YC in the following summer. We were supposed to do the winter batch after that. So seven months. And, we, we couldn’t because our visa issues, at some, with the family, I couldn’t move to, to, to YC. Yeah.
Can tell you there’s one way to solve that problem.
A global pandemic.
Exactly. Yeah. That’s exactly right. So we did it involve, I think we shipped super fast. We failure my co-founder who is like a, like a machine learning genius. and we follow early on the YC startup school, which is kind of the, first step to. And, and so what does it help you? It kind of, you measure the, yeah, the progress.
So, how much customer you’re talking to, Ahmed, how much money you made and how happy you are doing what you do. And so that’s kind of how we iterated
You were
Months.
During, startup school or
Yeah, the school kind of asks you every, every week, discussion and you make sure you make progress on that. I think these are the right question to make progress on your business.
And here’s, what’s kind of, kind of natural, like two months later. So we started in may, may, June on that, application for YC where I probably in September, like, so, so we did like all summer, we did the startup school scheme and then framework and made some progress on that. And we got the YC application in September and the interviews actually in Paris, In, I think November.
And then, ha had you, I guess like, your, your aspirations or your reasons for applying, I guess, are in some ways, self evident to somebody. You know, obviously you don’t need to convince me, but for the listeners, I, what was your, yeah. What were your motivations? Like? Why did you, well, I guess for one there’s, you know, I don’t know.
I always hear there’s a couple of reasons, right? Like sometimes it’s prestige, like people want to the prestige of YC, sometimes it’s, it’s the help, which I honestly think is the, the, the best reason. Cause I, you know, it’s, it was honestly really good for us, but then there’s also like, you know, it’s, it’s a great way to springboard venture back.
Thing, right as well. So like, did you have like strong reasons? Was it all of the above or what was the motivation for, for getting on the venture?
Yeah, that’s a good question. so I think number one reason was, ambition. I think like a lot of your brain startups, you Batara, can be not ambitious enough. And I think if you’re ambitious, like YC is really a way of, the alpha taking the ambitious path. Okay. Then how to make it like a business and a product that has a strong impact, like on a very large number of people.
So that was, that would be my number one. I think then it’s kind of the learning. we are at the beginning of the company, we sit for failure, then what’s what kind of is the most important, you know, for their culture. And we talked about it also. And, one thing we really value is learning fast and I think YC kind of helps you, you probably a lot of like, you learn so much faster because you’re at the right contact.
So it’s, I mean, it’s. It’s on the partners. Like every time we have a office hour, almost every time, like, wow. Blown away, there is like also Atlas. I get the right investors, I mean on the revenue, on the like mobile subscription and like, yeah, like you like auger from Blinkist, like, someone from, John from Spotify.
So that’s really helpful and also extra connection like we have in AI, we have the VP of AI and locale Facebook, and I don’t think we could reach this network with, with.
Yeah, the network thing is depends on, you know, what your background is. Obviously you had been in the peninsula, but still it’s hard to be really deeply networked and still it’s hard to. Invest in your engineering skills. Right. And like your IC skills and invest in a network at the same time, which was kind of my world.
Like I had an okay network, but like, it wasn’t super well networked. So YC was like a big like boost to that. Right. You could get interest to people. You could get a little bit, it’s still, a who, you know, game Silicon valley is still in a lot of ways or the broader concept.
Before we move on. I wanted to talk to us a little bit more about the, about the ambition of PhotoRoom, because, and this is something I think is, would be really relevant to a lot of our listeners who are, are building apps in the space. And, and I, as an indie developer for 12, 13 years, feel like I’ve, I’ve, I’ve worked too much with, with blinders on.
Not thinking about the bigger opportunity. So like the first app I launched was trip cubby. It was a model it’s log tracking app, to get reimbursements from taxes or get reimbursed from your company, for your mileage. And I just, I treated it like a little tiny indie business, lifestyle, business, and everything else.
Meanwhile,
IQ
IQ built a huge
Probably launched about the same time. Right. I would think.
No, they launched much later actually, which is even again, it’s like I had a multi-year lead as kind of the, how to do that
Assuming the market was there. Like my, like you probably came when the market was finally there,
Starting to grow, but yeah.
But what’s so cool. Is that, I think there’s so many opportunities in the app store that people overlook that seem really niche. Like you just started out replacing backgrounds in photos,
And now you’re going to be the next generation Photoshop. Is that a good one? Is that a good pitch? I don’t know what the
Yeah.
What, what’s the ambition that, where that took you from, okay.
We can replace background images too. This is, could be a huge business because we’re, un-bundling one of the like key parts of Photoshop, which is a massive business. So what, what, what is the, what was the ambition and what is the ambition that you feel that this, this can be such a big thing.
How did you, how did you convince yourself of that? The ability to do that?
Yeah.
Yeah.
I mean, it’s, it’s amazing.
I think it’s, well first like working on photo, video editor, like I realized that, I mean, video is big. Like we got, I think we free-play then named quick by GoPro. We got to $100 million. It’s kind of tell you like, and most people, they are still using like photo collage. So everyone’s working on photo and video is too complex for most people.
So like, if you get 100 million for a video, then it’s probably like any good, like yeah. Project improvement like 10 X product improvement on photo must get like 1 billion users. And I think it’s like, that’s one of the YC model, but it was really starting from a pain point of myself, like creating the assets for actually for the app store.
Like you have to create a PSD. And I was like, you spent so much time on non creative task. And I was like, I want to make that much simpler. And I think the big heart moment was kind of talking to the user. So, and also like talking, yeah. Talking to people like we kind of build in the open and people told us, it’s like, yeah, Yeah, it’s a, it’s like a actually it’s like programming, like a U instead of you’re you’re doing like, object oriented, editing, like you understand what kind of objects you have and you make actions that are relevant to that.
And that’s, that’s kind of done myself, like really burning myself away. Like it’s much simpler. Like you have an object and you, you offer it to the user. What’s the logic for the subject lines, Photoshop. It’s such a pain to learn. Like I think everyone would remember is kind of the blown away part of Photoshop, but also the pain it is to understate.
And it hasn’t gotten easier in 20 years. Like the only way now you can paint on a sphere or something like, there’s nothing like new, I still open it and it’s comforting. Cause I learned in CS two or whatever, and it’s all still the same, but like, I don’t think it’s necessarily, like, I think, I think there’s even a broader near you.
I’m going to make your, your $10 billion company, a trillion dollar company. But I think there’s an even broader narrative there around just like the future of software and how machine learning. Further like narrows the gap between like in software, like programming, not in the traditional sense, but like telling a computer what to do and the computer telling, like asking us or like bringing us like the things it can do.
And you see this in like varying degrees of it working well. Right. like Gmail, like suggesting like absolutely insane sounding replies that I would never say, like, that’s kind of that, but, but I think that’s all maybe a little bit too far, but I think what you guys are doing, it’s really great. You know, like segmenting photos, like giving people those tools, like taking, especially for a tool like email it’s like writing, like, I don’t know.
An AI assistant to like, say, thanks like I can, I got that. Thank you. But for, for, yeah, like, like cutting backgrounds out and like setting up. Yeah. Just building like, things that to a human, because we’re so visual in the way we think seem really basic, right? Like I want the cat in front of a blue background, right?
Like that. Just tell the computer and it can do that right now. The existing tooling is like very manual and very skills driven. And you guys are bridging that gap. So like yeah. Who knows something? I don’t know. Maybe photos, aren’t the end of it for you guys, maybe next you just start tackling the next software domain.
Right? I, you know, I don’t know that we’ll get to 10000000001st and then we’ll worry about the trillion dollar.
And that’s the really magical thing about your app and your onboarding that I wanted to ask you about. So exactly what Jake was saying. When I think of removing a background and I’ve worked in Photoshop literally since the nineties, late nineties, I’m old. but it’s, I’ve tried that like a hundred different times.
And even in the most modern Photoshop, I don’t even know how to do it. I expect it to be. I downloaded PhotoRoom and in like three taps, your onboarding is magical because you don’t get in the way of the person having a desire to get something done. And then seeing it happen. So in like three tops from opening the app, I see a background removed and it was just like
Okay.
Instant, like mindblowing experience.
Yeah.
This thing that like, I know it’s so hard and I think of needing professional tools and needing to be a professional to even figure it out. It just happens magically after three or four taps in your app was that I assume that was very intentional. Did you have different onboardings before and kind of iterate to that point?
Or what led you to just such a focused get the person to that?
Yeah, that’s a good grade. She was our interview. I think, we like, if we, especially in the beginning every week, we’d go to McDonald’s and pay a meal to student or anyone. And they like the tagline for McDonald’s and Frances com. Everyone can come in and come as you are. So we really met like tourists students professionals, and like doing user interview.
We got so frustrated. I think that people didn’t get to the step of removing background that kind of like
Oh, so you would give them an unlogged out like a brand new device and like, watch them go through onboard.
We would like pay the meal initially for downloading the app. We’d like first ask you three, four questions about their photo usage on their, on their phone. kind of ask them to download the app and yeah. Blinded as yeah. And, and we were like came sneaking. We just were, we were just iOS at the beginning.
So try to find people with iPhones and not Android, and that was stuff, but yeah, I mean, people usually stopped before and they don’t understand something and like to build trust with them, we figured out like the best is to short tech. So I can we get to the point where. We actually have all these people, we try the app that actually see the bag, the magic effect of Futterman like, so like taking a white sheet of paper, we valued microphone and like thinking, how can we do that?
And it got to like adding that as early as possible in the onboarding. I think that’s, that’s, that’s fine.
I think, I remember now reading about the McDonald’s testing and your, your, YC application and being like. That’s the moment I knew these guys were going to make it, I guess like it’s was brilliant, right? Like I, I don’t know how much user testing, like real good user testing is. If you do it in some sort of like professional context, it’s probably really weird and like expensive and like hard.
And this is dead simple, super scrappy. Right? People don’t do it because I don’t know nerds. Don’t like talking to people like we don’t like, you know, it’s, it’s, it’s tough to put your, your app in front of somebody and see them. Not, it’s one thing to read like bad retention numbers on amplitude is another thing to like, see somebody actually churn and like, but honestly that’s the best way to learn.
Like this is the best way to like, get really actionable feedback. So, I’m sure that was, that was super beneficial.
Yeah, it’s a, it’s a trick from Zenly. So the social network and maps, like that really is, one of the best, app in embarrass and they, and we apply that and yeah, it requires some. It’s not easy, I must say. But, you really, you learn so much and the pain today is more like we have more qualified users.
So it’s really easy in the beginning when you’re in your photo apps and people just as the app and everyone has photos. So it’s easy to explain. Then you want to like talk to your kind of retain user. It’s difficult to get them at the McDonald, but now we’re friends with all the vintage shops around the block.
So in Paris, so we get.
So that, yeah, that was I kind of my question I wanted to ask. I’ll just slide it in now, but like I’ve noticed, I don’t know. I don’t know if you had this intention initially, but it seems like you’ve found a new. Even amongst these apps in something I would say commerce or even e-commerce it seems like a lot of people use these, use your app to take photos of objects, to use as like advertising or gone Shopify.
Is that, is that true and statement or am I just like misreading investor updates?
No, it’s totally true. Actually, it’s not. The interesting thing is it came from a personal lead, like using, as you say, Photoshop and wanted it much easier for me, but I wasn’t clear who was using the CRA’s background apps. I’m talking to like user at McDonald’s. We realized like there was all these reselling apps, especially in the Europe and the U S where people.
Yeah, they’re just like selling Poshmark on vintage in Europe and they, there is no app that’s focusing on their photo need. Like everyone’s doing like selfies or I dunno, whatever lens on video you can make or, but, no one’s in it helping them. And it actually came from the user interview like, oh, that some user told us like, oh, my girlfriend would love that she’s selling on Depop.
And, and we kind of like it after multiple user asking us in support. asking us, and in talking at the user interview of my goal, we realized that, oh, that’s a niche that we should kind of focus on. So that’s Allie Kim,
Was that pre YC, like pretty early in the process.
And it came in a few, just not in one day, but it, I think early, after being taken at twice a
Okay.
Like early 20, 20,
So then my next question, I guess, is like, how do you decide then? So you have a car for strong product. You, you, you might have like varying. This is, I think this is very common for a lot of apps and companies is like, you have probably different levels of product market fit depending on the market.
Right? So like maybe broadly across all users of iPhone, your product market fit may not be as strong. But then when you look at this one niche, like maybe it’s really strong. And then I think some. End up in a situation where you have to kind of decide, like, do I want to go for this maybe less fit, broader market, or maybe a tighter market with a stronger fit that I’m starting out with.
Did you have that internal conversation? And then did you make an active decision? Like we’re going to focus on this and then yeah. And then what’s the plan after that? Like, or is that the forever plan?
I think we, the easy part is as a product guy, I’m really convinced that our usage is really deep. Like we’re starting from a different Lego brick, like, okay, you don’t need it mask or square pixels, you edit like objects. So, I mean, any app that kind of want to copy that Nike that’s to stop doing what it does today.
So it’s kind of the thing that relates to the missionary understanding excelled in the beginning. So we were confident. Digging into this usage and this product paradigm and like product basic block is interesting. And then we decided to focus on the pro usage and, and it’s difficult as a follower. You want to serve everyone at the beginning, we were even doing a video plus photo, like in December of 2019, we dropped the video, just for animation.
And then we dropped kind off the casual use case to focus on the pro and, and it’s, it’s been helpful. You’re not like giving up on the other users. You, I mean, some of the features, they’re still going to use it, the other, the casual, the people doing memes from, from the app, but she just like when you build features, you think about them.
And I, around that, I think YC is helpful because. like if you reach local maximum from one vertical, like product market fit, then you investing so much on the take. It gets better than the, all the local maximums or, or adjustment. Like you can reach them after, and it’s not a big deal and kind of believe and believing and trusting that helps you on, on like a, okay, we’re going to focus on this one for, let’s say three months and we say,
Yeah. I mean, I think that’s a really good point in that I think can trip up people early in the process is that you think. That making an active choice to close yourself off to part of the market as a mistake. Cause you’re like, well, I want to serve everybody or, well, I want to, you know, I want to have the most broad appeal I can cause it does, it feels wrong, right.
To not serve a use case. but often tactically it’s a bad choice because yeah, in the early days, anything. Hey find any users that love your product, even if it’s a small group, there’s, it’s a, it’s a closer step to like, get your foot onto that than it is to try to get sustainability on like mediocre product market fit across the broad market.
Because then also it makes, yeah, it makes your McDonald’s discussions easier. Well, maybe you don’t have McDonald’s discussions anymore. It makes your product discussions easier. Cause you can say like, okay, these are pilot. We’re not going to do all this stuff. We’re going to focus on this stuff, which gives you more of a loss city.
I just really feel there’s so much to getting that velocity early. Right. Like getting something that’s like moving and growing and getting fast. And I think that’s one of the things, I mean, I don’t know, I won’t, I won’t docks you guys on retention numbers and stuff, but you know, when you have a, I’ll just say that when you have a pro user base, that’s using it for something non casual retention gets easier, right.
Like have a reason to come back. And so if you, I mean, there’s not that many apps like that. That on it’s hard, it’s hard, it’s hard. It’s rare to find mobile apps that have that opportunity. Right. So when it’s there, you need to take it
Yeah.
How do you think about pricing for that value creation? Since, since those that kind of pro segment really probably gets a lot more value than you’re even currently charging. because they’re actually making money with your product. Like how did you think through your print pricing? And did you iterate to this point from a more kind of consumer pricing to them to a, I mean, to me it feels like you’re in the middle still of somewhat consumer-friendly and really honestly, probably cheap for a professional use case.
So how did you land on your current price?
Yeah, to be honest, it’s like most of the photo apps. I mean, when we started and maybe it’s different, they are all pricing like 10 bucks a month and that’s kind of given by, I guess, Spotify Netflix, like it’s kind of the, the glass ceiling of the price of subscription, even for prosumer. And, and we kind of iterated on the under yearly from 40 bucks to 69 bucks, in, in the U.
So we didn’t like, we kind of landed on that quite early. you don’t want to alienate the user, especially if you put the up-selling in the onboarding, like, to be too expensive. I think we have a major opportunity though, to like address the more advanced business and the more than one person in a shop, it’s just, it’s really difficult to build this a B2B case in in-app like, you don’t have that many apps that use that in the up-sell of the phone.
So you probably have to show it like. The the first price, to every user and on the pro you probably can to brigade them after, I think it’s something we can do later, like focusing on the product for now and make it simple as much as you’re like, if you start with two prices, like the support, basically it is going to go crazy.
We still do the support of the users. That’s something we try to maximize for simplicity here.
I mean, it’s a good point to make, especially too. It depends on, depends on your cashflow constraints as well. Just like how much, how extractive you want to be, how much you want to push it. Right. because you know, when you have good retention, like there’s an argument, an argument to be made to not mess that up by because you’re raising your price will hurt your attention, right?
Like it’s kind of at least on paid, right? Like more expensive. It is. People are going to churn more. and if you’re compounding your total, like paying subscribers, that might be more important and then extracting an extra, an incremental $2 or $10 or whatever from each user, right. It might be better off just to keep them happy and longterm.
And that’s what makes it, I don’t know, pricing just so complicated. It’s about finding that equilibrium to maximize like the longterm area under the curve and not just, not just like the individual LTVs.
Yeah, exactly. I think there was one. yeah, we, you want to talk to, like, you don’t want to. Expensive at the beginning, you should have too expensive. Like one of the really source of feedback was also our support. And like, if you’re too expensive, you get less pro. And the goal, I mean, the reason we launched after two weeks with was like the feedback from process so much more valuable than the feedback from, for users.
I mean, you still want people to pay, like, just stop at 500 bucks in long month is going to be like, there’s no way people are going to pay for that. So, and I was actually talking on Twitter that like, we actually put forth first a monthly plan because we wanted people to churn and be able to talk to them.
So there was really a focus on learning from the
Interesting.
Early days.
Yeah, I’ve always. Yeah. The, the short, I think, long, the annual subscriptions obviously have a bunch of benefits to, to, to app developers, but you do end up flying blind for a very long time. Right. Until you really know what those numbers look like. So if you’re on monthly, purely, it does kind of simplify things early on.
Which is another case to be made for just not over thinking your pricing, like initially, right? Like you guys launched just with the monthly and it was fine that you added, I don’t know when you added an annual product, but you brought it in when the time.
I think the logical, so learning from GoPro and replay days is the pricing is quite elastic. So you double your price, you divide by two, the number of pros like minus plus 10%. And so, so it doesn’t, I mean, it’s, I mean, when you get bigger, it’s way of doing experiments on pricing, but in the early days it’s worth, it’s not worth like taking too much time on that.
Yeah. I mean, it’s good to know if you have an elastic curve, it means you’re pretty close to, to the optimum already, right?
Did you start from day one at that $10 a month price point?
I think we were at eight or nine. it’s pretty much like every pro for the pro apps. Like not selfies was at that on the photo and it’s, and I think. The co, I mean, it goes from Spotify on Netflix. Like, everyone’s like a, it’s like if comparing industry report, they tell you a comparing you to Spotify on that fixed anyway.
So it’s a, I think it’s a good, like a way to start on as they increase the price, they increase kind of the time of all the possible ATV of all the apps, which is really good. Thank you.
If they don’t take care of it, inflation will don’t worry.
But, but that’s just amazing two weeks, to an MVP that you could charge $8 a month for, and people actually paid it.
Well, 12, 12 years in two weeks, David, if
Well, right, right, right. No, no, that’s a great point. But the point being that there, there are still opportunities that when you have experience and domain knowledge, that it’s not the, the programming, it’s not the, it’s not such a monumental task to build something that’s really valuable to people in this space on mobile, that you can build something good quickly with that experience.
The first app was really crappy though. Like I think we
Yeah.
A few weeks before having our pay first paid users.
Gotcha. I did want to talk a little bit about your marketing, so, What did you do at launch? Did, did you get a little pressed? Did you, you know, talk to apple, how did you get that initial code?
So yeah, we were super, I mean, apple has been super supportive to us. I think. Before GoPro, GoPro acquired replay. so we play was, app of the year, senior as, elevate.
So
You guys at the year in France, is that what the
No, so so I have a card, I brought the screenshot that,
The U S
So we didn’t, yeah, we didn’t, get the U S we didn’t get the U S and north America, and it’s kind of a private, taser, but it’s, we got like most of the Europe and Asia. And, yeah, and then I was seeing like the star that elevate their they’re thinking the other U S and we should get that.
It was good for you that we hadn’t localized maybe
Yeah,
That was the thing we were like only English at the time.
Well, elevate is such a difficult business to localize. So I think it’s a photo video is easy to localize it. Yeah.
And, and so we got like, we got the keynote, so, and we kind of, I mean, the app is really good at marketing. using the latest technology of, apple in, like the metal and using the lasers, the GPU, I kind of build a relationship from there, with the apple team and also like learning AR that’s kind of the narrative of apple, like to showcase apps.
Leveraging the latest technology. They do their marketing through developers and that’s awesome for us. Like it’s super opportunity. And so what was that? When we started, it was well, we’re using a Carmel to do the background removal and we did use like really early on in September of 2019, we use our KPIs to remove the background, to do some live preview of the photo.
And so we got into, there is an accelerator inference in the biggest, like sexual life is one of the biggest things. Accenture and apple has a program there and we got in there and they helped us and like marketing and, and business, during the summer. And we had some tech workshop and in September we got Macy’s, marketing from the using Eric.
He, three, I think, API APIs. So I think all the days was marketing through, using the latest tech software and hardware from.
And where did it go from there? Yeah. So after, after you’ve, you’ve gotten some traction in some of those early customers. did you jump into paid user acquisition
No.
Of, of, paid to, organic growth?
Yeah. So we got into, we didn’t do paid until like, we really got traction and market fit. So early 20, 20, and we started to have some, we got Gary V tweeting about us, like a video, farmer. So that was like a viral video demoing the app. And we kind of, I mean, the thinking was if some videos of demoing for term or viral, it probably works so-so as ad.
So we kind of use these viral videos and try ads on that. Started ramping up, I think before YC, Facebook ads. So in April of last year and, it kind of, yeah, it was a good, channel of acquisition for us. And we always had in mind, like, we don’t want to spend too much, we wanted to have it under control, but the payback was really good.
So we kind of, added mix like, I don’t know, it was three 17, maybe at that point in between the, between paid 30% beta and the 70%. And, yeah, organic and so that we ramped that up and I think it wasn’t a good time to all this marketing and we kind of fast in that, at that point, because there was a COVID, the beginning of the COVID and all marketing was going down.
So it was super cheap to try stuff there.
Yeah.
So I tried to be a part of these tick on that an influencer. I like a lot of times. So like all of that, we were at the right time and at the right moment for that day,
So how much, like are you balancing? I mean, obviously there’s always so much you’re balancing as a founder. but you know, how much are you thinking about investing back in the app and like broadening your appeal, making it better new markets, like new platforms versus. The scale of approach, like how can we scale marketing and, and continue to grow?
Or is it like 50, 50? Like, do you have a top priority right now? Or, or how has the, like, how has your, your mind thinking about like your biggest growth levers?
Yeah, we try to try to have a higher, level kind of privacy laws. So let’s focus on retention or let’s focus on this specific kind of users. So, in the U S for just three months, and we tried to align product and growth, on like a three months of that. And so that’s kind of. that’s yeah, that’s how we think about it with Elliot and, and try to have it on growth and on product and kind of put us to talk more to these kinds of users, so to improve on, on these kind of shoes or just, just niche for instance.
And, I don’t know if people are selling on this marketplace for a month and then we’ll see maybe another nation, another country, but still improve the experience for everyone.
And are you thinking about marketing in terms of like specific people selling on specifics, like marketplaces, like the you’re actually going like channel by channel that, that, that, that closely. And does that inform like features or does that inform creative or how does that feed back into your part?
Yeah, we’re good. We’re getting into that. Like we tried to understand bearer by a persona use case. What’s the LTV and what’s the retention is, and I think we are at the scale where we start to do that, but before it was like a general, a general creative for everyone and kind of demo the value of the app.
And we were super lucky that our creative we’re working for them. And I think like now, like the way marketing works, it’s, like a. Facebook or Google are doing most of the optimization and you’re more into like, what can I add up my creative so that it fit the focus I want to do for it. I don’t know if the U S so I’ll be a make sure you’re in English.
I’ll make sure if you’re like looking at multiple countries, try not to be too localize. I think there is a Netflix called neutralize, or they have a specific wording on making the, the artwork or the creative, not to localized, not to English, for instance. Okay. So you just content that’s good. So it’s kind of, that dictate kind of what we try to do with growth and marketing.
That’s great. Well, I have a million more questions, but we do need to, to wrap up. We’re going to put links into the show notes to find you on Twitter and LinkedIn and, and PhotoRoom is such a great name, easy to Google, easy to find on the App Store. but you’re also hiring, what, what positions do you have open?
We’re hiring a lot. We’re hiring on growth and paid acquisition, hiring project designer, iOS developer, Android developer. And the way we think about the team is really to have a, like, we are 10 people, and we have a strong impact to millions of users. So, really leveraged like a small team, high impact.
I think it’s possible because of apps. So, we’re looking for really senior people for that, and mostly in Europe. So we have like a, two, three days a month, in the Paris HQ, but, you can work from anywhere in Europe.
Yeah. And I’ll, I’ll second that. I think working on this product would be really interesting. Purely based on my insider knowledge as an investor and your friend, but for real, I mean, a lot of apps don’t, you know, get to the point you have. You’ve got a lot of tailwinds and I think actually, the upsides are go far beyond the App Store.
The future is very, very, very big. And you guys are ambitious. So take these jobs. Thank you.
Yeah.
Yeah. We were thinking be everywhere. We stopped for a while, but we were like mobile first, not mobile only. And we have the web app web tool that we launched last week. We have an API for any developer that wants to remove the background. We have photo and attribution, and have the module folks using it.
So it’s really, I think we want to be close to the entrepreneurs, and we want to communicate through pro images that sell. And so sometimes it’s not an app, it’s just a photo and button. And so you can use the API for that.
So, yeah.
It’s pretty great when you have a good product market fit, it just gets really fun.
Yeah. And we have that kind of, now that we have money, we kind of, we have like super smart people on the machinery team. So, we have the best thing on the market to do that. And that’s super exciting. Now we’re shipping new machinery next, I think next week. And it’s going to be awesome. I can’t wait to see the result on the analytics.
That’s amazing and 10 people. I thought you were bigger. I guess you want to be, you want to be, 15 or 20 with all the postings you have.
That’s why I’m really bullish on this market, David.
Yeah.
Yeah,
A small team can do a lot of stuff in this space. It’s crazy.
Yeah, It’s
It is crazy.
Well, thank you so much for being on the podcast. It was great chatting, and thanks for sharing your insights, Matt.
Yeah. We’ll have to catch up again in two years to see how, see how it’s going.
Yeah, of course. With pleasure. Thank you guys.