offtotheraces

sorry should be fixed now!

A tool to map your network - for fundraising, sales, partnerships, etc - to get intros to people. Cold email is dying as it gets so much cheaper and easier to send emails with AI and automation, so human connection is going to skyrocket in importance.

Would love feedback - in open alpha:

www.draftboard.com

…says the Hamas-run health ministry.

Nothing to see here, no conflicts of interest.

Let’s trust the people who kidnapped babies and raped and pillaged their way across southern israel.

A tool to map warm intro paths to people in your extended network (ie 2nd degree). For finding paths to VCs, sales prospects, candidates, etc. Would love any feedback! www.draftboard.com

Given the negative votes I guess my attempt at humor fell flat :)

App Store has been a cesspool of liars and thieves, criminals and sadists for years, from Phil Schiller to Bill Havlicek and many, many more.

Loans get issued based on profit generation (or asset value), so no, it is not “to keep them afloat”. You can’t get a loan if your company is not doing well or too risky (that’s why startups raise equity - because they are still too risky for someone to lend them money).

A loan is a form of debt, which is one of the two main forms of capital - the other main one being equity. Debt is less expensive than equity, so companies prefer to issue to raise capital via debt than equity.

It’s funny that Molly (a VC) ascribes so much power to VCs that they can literally create bank runs on their own.

No.

VCs don’t make decisions on where a company keeps its cash; the founder/CEO does. And founders freaked the f-ck out. Let’s make sure to remember that founders had 100% agency in the decisions they made about their cash.

Here’s a selection of comments in the Whatsapp founders group Im in - all founders, no VCs:

Thursday 3/8 (36 hours before FDIC takeover):

“I'd consider moving to one of the too big to fail banks..”

“I agree the risk is higher then we thought before, I'm in SVB, with 4% - and looking to understand where to go now.”

“It's a numbers game - if a lot of people do what I do at the moment - it will fall.....”

“Does someone have a contact at Chase for B2B SaaS customers? I'm thinking it's wise to already have an account open there in case it will seem like we need to move off SVB.”

“Let's say we want to open a Chase account and move company funds?”

“for those that have their money in SVB and do not have another company bank account - what are the immediate options?”

“If there is a risk of a bank run, why not take the money out”

“Basically our whatsapp group creates bank runs now... power to the founders?”

“we just moved 85% of our money out”

“I just pulled ours”

It’s not surprising a VC would think she has more power than she actually has, but she also clearly has no idea about the wildfire that was spreading among founders themselves. Founders don’t give a sh-t about what their investors think (generally) - founders make the decisions they think are best because they have the most to lose (or win) from being wrong (or right). And they are much, much, much more likely to trust their fellow founders than their VCs.

He has also become a very quiet mega philanthropist- he doesn’t publicize his giving but it’s on a huge scale

I’ve had this business idea for years but I would be torn apart in todays world if I tried to launch it:

Build an ML model trained on actual images of women’s breasts and bras that are verified to fit them well. Once the core model is built a separate, a smaller size on-device model is built to be the model users actually interact with. A user submits an image of breasts and is told right away which bras in which sizes would be the best for them. Photos containing faces would be blocked from being uploaded. No photos would leave the device unless a user opted in to do so in order to help improve the model.

Monetization is straightforward: affiliate fees for directing users to buy bras at retailers, plus sponsored placements in search results at some point.

Biggest concern is how to come up with the initial data set, but I’m fairly certain there’s a solution there.

Am I crazy or is this as obvious as it seems to me? ThirdLove sucks, as do calculators like this.

I agree - it’s about how the developer communicates (or in this case obfuscates) the price to the user. Check out the substack link and you’ll see screenshots of how Bending Spoons does it (it’s highly misleading).

Generally I’m of the opinion that consumers are responsible for their own choices; but Apple has allowed bad actors to exploit the availability of weekly subscriptions and prey on suspecting users.

search “wallpapers” in the app store and try the top results: 1. 188k reviews, 4.99/week https://apps.apple.com/us/app/live-wallpapers-for-me/id10693... 2. 120k reviews, 4.99/week https://apps.apple.com/us/app/live-wallpapers-for-me/id10693... 3. 243k reviews, 4.99/week https://apps.apple.com/us/app/wallpapers-widgets-myscreen/id...

Tricking users into these high priced subscriptions is a tried and true strategy in the app store. The press caught on late (2018) but it was happening from the moment apple opened up subscriptions to all developers in June 2016. Started with crappy coloring book apps and then spread like wildfire from there. Bending Spoons is simply the evolution of that.

https://techcrunch.com/2018/10/15/sneaky-subscriptions-are-p...

This is a common response. unfortunately it doesn’t hold water: the average lifetime of a paid user of Splice is somewhere in the 7-10 week range (source is confidential).

What super users of editing products do you know that only stay 10 weeks?

None. What’s actually happening is Bending Spoons is exploiting the App Store’s ease of payment and dark patterns to trick unsuspecting users into enrolling in a super high priced subscription without their knowledge.

This is going to be a disaster - Bending Spoons is not a good actor:

“let’s talk about Bending Spoons’ business model. The basic concept is very simple:

- Find a solid app that someone else built and buy it from them (see Splice (acquired from GoPro) and 30 Day Fitness)

- Optimize the monetization of said app (by implementing from scratch or fine-tuning existing subscriptions), thereby driving higher lifetime value (LTV)

- Take that higher LTV and use it to bid on expensive ad inventory (on Google, Facebook, Apple Search) where you can acquire more users (aka drive more downloads) - i.e. leverage performance marketing for growth

- Convert those new downloads to paying users

- Massively ramp revenues and cash flow by combining the new users + the better monetization

- Use the new cash flow - plus the debt from those lovely Italian banks - to fund the next acquisition

- Lather, rinse, repeat

There is absolutely nothing wrong with this business model. What differentiates Bending Spoons, though, is how they do it.

Remini - Bending Spoons’ new app that the press is gushing over - is $10 a WEEK. And Splice, the app that started it all? That’ll set you back a cool $5/week.

Does anyone really think it’s appropriate to pay $10 a week for a photo editing app?”

https://open.substack.com/pub/impassionedmoderate/p/ryan-rey...

So are you saying that the clearing price for the ad inventory they’re competing over is $27? (If so I’ll explain why that’s not the case)

Until last year it took 11 taps to cancel through iOS. Bet it’s a whole lot less if you try to cancel HBO from their website.

Mobile app operator here - let me clarify some things:

1. Until June it was impossible for a developer to issue a refund to an angry customer - Apple simply did not allow developers to do that, despite the app store being around for 13 years. This has led to untold frustration among developers - angry customers email us, leave horrible reviews, leave screeds on social media about how we “won’t” refund them, when in actually Apple reserved that right only for Apple support agents. Literally - if you forgot to cancel your Calm or Headspace subscription, neither Calm nor Headspace could give you a refund. You had to call Apple. That’s insane and leads to horrible customer experiences. (I can send you actual emails we got blasting us for this, and us pleading with them to contact Apple because we literally can’t do anything to help them).

2. You may love the Apple subscription experience, but we shouldn’t be letting Apple decide what experiences we do and don’t have online (within reason). For instance: Apple doesn’t allow subscriptions priced at less than $0.99. Why not? What if I had a product that i wanted to sell for $0.50 a month? Why should Apple get to decide that that’s not high enough? There are many examples of things like this.

3. I think we should grapple with the ideas and arguments of the author, when in this case or others, and not focus on the pedigree of the publication they write for

You’re 100% right - don’t doubt your logic! :)

The problem is that what you describe is the short term positive impact to Tinder. But that’s far outweighed by the long term negative of having your whole business dependent on the whims of Apple. For example, anytime Tinder wants to make an app update, Apple has to approve it. Well, if Tinder goes after Apple with regulators by filing complaints and pointing to antitrust violations, Apple now has the power to mess with Tinders business. Or if Tinder wanted to offer its users a 20% discount as an inducement to subscribe directly with Tinder rather than through Apple, Apple can and does prevent them from doing that right now by refusing to allow Tinder (or any developer) to reference in the app the fact that lower prices can be achieved by subscribing via web. The examples are countless, but essentially the more reliant Tinder is on Apple, the worse for Tinder and the better for Apple.

Remember two things:

1) more demand in auctions means higher prices. so if apple is taking the second slot they’re almost certainly increasing the cost of the 1st slot for hbo. which is apples whole point: to increase the cost (literal and figurative) of hbo’s efforts to get people to sign up via web rather than via app.

2) in the world of search marketing - including both on google and the app store - there is a strong belief by brands that they MUST be the #1 paid result for their branded search terms, no matter what. so what you’re seeing here is hbo saying “we always have to be #1 on our branded search no matter the cost”. This is exactly why people complain constantly about google showing competitors ads when the original company’s brand is specifically searched for by the user - effectively the competitor is freeloading on the incumbents brand searches to drive traffic (by paying to show ads on those searches). Google doesn’t care because they make more money this way (more competition for the branded keyword drives up CPCs).

all of this is to say that apple being in the #2 slot doesn’t say anything about the intent of their actions here, which is to make it uneconomical for companies to move users off apples rails onto their own systems.

Think about this way: both companies are bidding on the same keywords. One party (the developer) collects either $97 if the consumer signs up on their website directly or $70 if the consumer downloads the app and signs up via the app store. The other party (apple) collects only $30 (at a maximum) if they drive the user to sign up via the app store (30% of a $100 LTV).

If they’re both bidding on the same keywords, which they are, then the price of the keywords is the same to each of them. It’s an auction, so whoever bids the most will win the auction. The developer can spend up to $97 to bid on that keyword and still be profitable or at worst break even, while apple can only spend up to $30 to stay profitable or break even. So if Apple is winning auctions, it means they’re spending more than the developer, despite having less than half the purchasing power of the developer. So they’re spending negatively almost no matter what.

Ok maybe i’m not following your question then - do you mind rephrasing and asking again?

Remember, it's not that much money for Apple especially considering their whole app store business model depends on taking their 30% tax. Maybe we're talking about $50m/yr vs app store revenues of $10b (?) a year (and 70%+ margins per docs in recent court cases). They would absolutely be willing to lose this money if it extended their stranglehold on app developers - it's the same reason they fight tooth and nail in every jurisdiction around the world to prevent regulation of their app store behaviors and fees (Japan, Korea, Netherlands, UK, Australia, Arizona, US federal, etc). These lawyers probably cost them about $500m/yr (without revealing my identity trust me that thats a very reasonable estimate).

As to your bulletes points:

- Tinder is owned by Match Group who - before Tinder - spent 20 years building a paid acqusition machine. In order to do paid acquisition you have to deeply understand the LTV of your users. That methodology, refined iver years at Match was ported to Tinder (just read Matchs earnings calls). While Apple has access to all ybe transaction data of apps on iOS, so do then defelopers, who are highly resourced and highly motivated to understand their LTV/CAC. So no, I dont believe for a second that Applr has an advantage here. And even if they did, applr only collects 30% of the revenues - how could they ever guy profitable when bidding for the same slots as the developers who Are getting 70%?

- Capital - nope. Match produced close to a billion dollars a year in cash flow. HBO billions. Capital isn't an issue for either of them.

- I disproves this hypothesis with the LTV illustration above. To be clear: Theres no scenario where apple can be profitable on this spend when they can only ever get 30% of what the consumer spends.

Again, by definition theyre going into negative margins because they can only ever get 30% of the revenues; how could they compete with the developer who gets 70% of the revenues without going negative?

You're right on two accounts: - Google gets paid no matter who pays, so they don't care - Tinder still gets the revenue (and at better margins bc they're not actually have to pay for that user anymore - Apple is paying)

And even your last point is not wrong: at some point Apple may stop doing this. But that could be year's away, and in the meantime, they're throwing their big stack around to make it too costly for developers - who Apple supposedly partners with - to build businesses that are less dependent on Apple’s whims. Plus, Apple uses the fact that most subscribers to app store products subscribe on the app store itself to bolster their case with regulators that no reform is needed bc consumers are overwhelmingly happy to use Apple’s IAP systems. But if Apple is putting it's finger on the scales in order to actively drive users away from web subscriptions, then they heavily misleading these regulators about the true “choices” consumers are making.

The article doesn't have to say it because it's just the way that google ads work. It's a bidding-based system, so at the most basic level the person who bids the most wins the auction and their ad is shown. If the LTV of a customer is $100, and there's a 3% processing fee for web transactions, then Tinder will bid up to $97 to acquire a customer. So Apple has to pay at least that much to acquire that same customer in order to win the ad auction. Once Applr has paid that $97, the user now downloads the app and subscribes via Apple’s IAP system. Apple takes 30% of those revenue while Tinder gets 70%; so Apple gets 30%*$97 = $29. So they've spent $97 and received $29 ----> they have a negative $68 margin on that spend.

I run a big portfolio of mobile apps, and the discussion around this is misguided. It's not about Apple taking 30% of the revenue generated from these ads.

It's about Apple driving up the user acquisition costs for these companies so much so that it become entirely uneconomical for them to buy ads that direct users to their own websites, and instead the campaigns that target users to download the app - which results in 30%-to-Apple IAP subscriptions - become much more attractive again. So Apple is trying to make the cost of running these ads so prohibitive to the companies that they stop trying to drive web subscriptions and instead go back to driving app subscriptions only, where Apple gets 30% of everything.

As you can see it's even more sinister than it first appears - it's not a short term land grab, it's a long term strategy to prevent developers from legitimately acquiring users outside of Apple’s walled garden.

(Looking at the economics make this even more clear. Let's say Tinder has a $100 subscriber LTV (lifetime value). If the user purchases the subscription in the app, Apple takes $30 of that, so if Tinder wants to run a marketing campaign on Google, Facebook, etc that drives an app install, they can't pay more than $70, otherwise their spend has a negative margin.

On the other hand, if tinder can use these ads to get people to subscribe on the Tinder website, they have a ~$97 LTV ($100 minus 3% payment processing fee via stripe/adyen/etc). So now they can run a campaign on Google where they can spend up to $97 to acquire a user, much more than the $70 before. And because Google and Facebook inventory availability scales non-linearly with your maximum bid, a 38% increase in acquisition cost allowable could mean a 100% increase in available inventory, and potentially higher quality inventory at that.

But if Apple - with their unlimited cash pile and not caring about negative margins - comes in and soaks up all this inventory by bidding the same $97 for every user, all of a sudden the cost for Tinder to acquire these users goes way up and becomes negative margin. At that point, the rationale thing for tinder to do is stop running these campaigns. This means they stop getting web subscriptions, stop diversifying their business away from Apple, and Apple maintains its iron grip on Tinder.

Remember, in this case Apple is paying $97 to acquire a user who will generate $30 for them (30% of the $100 LTV), so they're massively in the hole on this spend. But they don't care because their goal isn't to profitably acquire users; their goal is to make the costs for Tinder to create a more diversified business so high that Tinder stops trying to. That's some f-ed up sh*t.

Check out the Robokiller app - their answerbots do exactly what you described.

https://apps.apple.com/us/app/robokiller-block-spam-calls/id...

They were employees, not contractors or part-time

Check out Cootek - Chinese app developer that went public about a year ago (main app is TouchPal keyboard). They were engaging in "malicious and disruptive behavior" to drive their revenues (Buzzfeed broke the story) and Google banned them from distributing their apps on Google Play. Stock is down from >$9 before the news broke to $5 today.

https://www.buzzfeednews.com/article/craigsilverman/google-b...

https://finance.yahoo.com/quote/ctk/