Episode description

Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails, Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in the Consumer Subscription Software space.

On the podcast we talk with Eric about his 2021 report on Consumer Subscription Software, the truth about LTV calculations, and the new era of organic user acquisition.

In this episode, you’ll learn:

• Was 2020 just a “COVID Bump,” or a shift in consumer behavior?
• Are the Bumble & Duolingo IPO multiples justified?
• How savvy developers are adapting to Apple’s App Tracking Transparency
• The truth about LTV
• The new era of customer acquisition

Links & Resources

• Spotify
• Whoop
• AllTrails
• Pinkbike
• Lingoda
• Bumble
• Duolingo
• Instacart
• Match Group
• Netflix
• Noom
• Weight Watchers
• Tinder
• The Dyrt
• Day One Journal
• Automattic
• Tech Crunch
• Scribd
• Pandora

Eric Crowley’s Links

• Follow Eric on Twitter
• GP Bullhound
• GP Bullhound insights
• Eric’s LinkedIn
• GP Bullhound 2021 CSS survey

Follow us on Twitter:

• David Barnard
• Jacob Eiting
• RevenueCat
• Sub Club

Episode Transcript

00:00:00 David:

Hello, I’m your host. David Bernard. And with me, as always, RevenueCat CEO, Jacob Eiting. 

Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in consumer subscription software.

On the podcast, we talk with Eric about his 2021 report on consumer subscription software, the truth about LTV calculations, and the new era of organic user acquisition.

Hey, Eric, welcome to the podcast.

00:00:56 Eric:

Hey, David, Jacob. Thanks for having me back. It’s always a pleasure. 

00:00:59 David:

Yeah. Every year you release this report, so we had to get you back. This is the third annual Consumer Subscription Software Report, and I wanted to kick off just asking you a little bit about the motivation, and where your headspace is in thinking about creating this. Who the target is, and what kind of questions you’re asking yourself as you prepare this report.

00:01:24 Eric:

Yeah. The report is the GP Bullhound Consumer Subscription Software Report. I call it CSS, which is kind of a playoff SaaS. This is the third year I’ve been writing it, and it started back in 2018. I worked with a company called AllTrails that was starting to monetize really well by selling subscriptions.

It was like a light bulb went off in my head. I was like, this is a phenomenal way to provide a consistently improving product to consumers, where the margins are pretty good. It’s easy to access a ton of different people globally through the app stores or through the web, and I just got really excited about it.

I started putting some notes down on my own, and then GP Bullhound really supported me in saying like, “Hey, this is actually a pretty big trend. There’s gonna be some amazing companies built around this space,” and companies like RevenueCat, that are supporting CSS companies, are just as exciting.

So, we’ve been slowly educating ourselves. The goal behind the report is really just to force me to do some thinking about the space. What it looks like. What it will be. As a banker, you can quickly focus on transaction, transaction, transaction, and not really do any long-term thinking about where the world’s going.

It’s putting myself in your guys’s shoes. You guys are building RevenueCat not for what the world looks like today, but for what the world looks like in three to five years. I try to take the same approach with CSS, and think about where’s the world going to go. So I talked to a lot of smart people as I put the report together. Entrepreneurs, investors, get their opinions.

You guys can see their interviews in the report, and then ultimately we publish it. The audience I like to think about is entrepreneurs, people that are thinking about starting a CSS company, or already launched one, and they’re looking to improve their metrics, or think about their target audience as entrepreneur-rich.

By partnering with them, investing in their businesses, it takes them to the next level. The other way I like to think about it, it’s my own personal scoreboard. I love to flip back two years ago and see, was I right about this company? You’re publishing in public, so people can always come back to you and say, “Man, you were way off.” So, I look forward to that.

00:03:26 Jacob:

I remember the F finding the first one, the 2018, I guess, reporter 2019, whenever the first one you put out,

00:03:33 Eric:

2019, I think that’s how we met actually.

00:03:36 Jacob:

Did you reach out to me or? I think I found it, or I don’t remember what it was, but

00:03:39 Eric:

We’ve had a mutual friend, Nico introduced us and said, Hey, you guys should talk about this. and then I think we just went off on a two hour tangent.

00:03:47 Jacob:

But yeah, I remember being, it’s still, there’s still not a ton of like really focused research or writing on this space. and I think that, that, you know, this will probably won’t be true for very long, right. As long as it continues to grow, but like going back to like who it’s for. I mean, I imagine it as some, you know, end of the day, if you’re employing.

Pushing into some kind of lead gen. Right. But it does provide a lot of value for, you know, even if you’re not interested in a transaction or whatever, just. Some like holistic data on a space. Cause like, I, the same, I mean, Eric, you said we’re, we’re thinki...