The Mobile-First Prosumer Playbook
When I started exploring consumer subscription companies, there was a clear line in the sand between SaaS companies and consumer subscription pioneers like Netflix, Spotify & co. The former sold cloud software to businesses over the cloud and the latter charged consumers a subscription to access content. Even when talking about mobile SaaS, it was usually SaaS with a mobile component for field workers or a simple companion app.
However, with the increasing power of mobile devices and software, faster connectivity, and the trend toward remote work and self-employment, these lines have become increasingly blurred. This is true for the Western world, but even more so in emerging countries where many entrepreneurs and small businesses have skipped computers and SaaS to start on mobile. Why buy a new device and learn a new program when you already have an intuitive supercomputer in your pocket?
When I started Adjacent in 2019 one thesis I explored was post-media mobile applications that were dual-use for consumers as well as in a professional context. The second investment of the fund was Speechify (the month they turned on subs), followed by PhotoRoom (after YC) and Polycam (at incorpotation) the following year. I want to share some of the the learnings from these and other Adjacent companies in this post about The Mobile-First Prosumer Playbook.
Act I — Solo Mobile App
All three started out with a mobile app for a specific use-case:
- Speechify helped people with dyslexia or ADHD to turn text into speech
- PhotoRoom magically replaced backgrounds for better product shots
- Polycam leveraged the newly introduced lidar sensors for 3D scans
The advantages of starting out with a focused mobile team are clear: They only require a small team, limitations force simplicity, it is frictionless to launch to 175+ countries via the app stores and annual subs have a strong cash flow advantage (ideally paying back CAC on day 1). This often means reaching positive cash flow much earlier than other venture funded companies, giving founders the opportunity to choose when to raise.
Act II — Web App and Plug-ins
Once we had found product-market fit on mobile, we started tackling the next platforms. For Speechify it was browser plug-ins that would allow users to read content on web and in email clients, while PhotoRoom and Polycam built web apps that could bring the core functionality to desktop computers. Cross platform usage always increases engagement and retention for those users that adapt both and it also facilitates better targeting and helps to drive up margins (via Stripe vs AppStore payments). This step can also significantly enhance the core product experience: With the Speechify plug-in, users were now able to bookmark and save websites for listening on mobile later and architects could share scans and blue-prints captured with clients on web for instance.
A web application also lays the foundation for Act III as it is much easier to test and iterate more complex use-cases on the web than on a limited mobile user-interface and there are many professional users that prefer to use their company’s credit card over their personal AppStore account.
Act III — Multi-player, API and B2B
There was a moment when a car dealership with 150 locations reached out to the PhotoRoom team for a firm wide license and we had to suggest to download & subscribe 150 times… Clearly not the ideal solution but more importantly, a natural market pull into the direction of B2B.
As a mobile-first prosumer company scales, it will almost certainly encounter users that will try to use the product in a more professional (or academic) context and this often times requires collaboration with others. At this point (and with enough resources and organizational scale) it is the right moment to explore what a B2B offering could look like. For btoth Polycam and PhotoRoom the first step was shared assets across multiple users and other collaboration features. PhotoRoom also launched an API for marketing use-cases and marketplace companies. Speechify launched a suite of products for content creators, allowing them to create voiceovers for any type of content and a variety of needs. What exactly the right B2B product is depends greatly on the company and core technology.
While Act III can significantly increase the companies value by increasing revenue retention and contract values, it is not trivial to get it right. B2B offerings often require different product DNA and more importantly a new go-to-market motion (even though the mobile app is an amazing top of funnel). This can require organizational changes or restructuring, but it is certainly worth it as it solves some of the core issues of mobile-first companies: Hitting the ceiling too early. I therefore encourage all mobile-first prosumer companies to build the foundations for Act III in due time.
Thanks for reading and I hope this is useful for early-stage mobile-first founders and am happy to take feedback or hear about similar journeys. As the first few Adjacent companies are expected to break $100M in revenue this year, I am excited to see how this playbook works out in practice and am sure that there will be new learnings to share in the future.
