The document discusses the funding gap that app and game developers face when trying to acquire users through paid user acquisition (UA) campaigns. Developers need funding to reinvest in UA in order to acquire more users, but they often cannot access funding from traditional sources like venture capital, credit cards, or publishers. This funding gap means that many great apps and games are never able to reach their full potential. The document proposes that developers could use funding based on their daily app revenue to directly reinvest in UA campaigns and acquire more users in a self-funding cycle. It emphasizes the importance of testing UA strategies to understand user metrics before launching large campaigns.
2. 2
Everyone knows the stories about a few apps that just go viral with
no promotion. For the 99.9% of all other apps launched, it’s necessary
to spend to acquire users…
DEVELOPERS NEED TO
SUPPORT APP AND
GAME LAUNCHES WITH
PAID UA
PollenVC - Interface 2015
3. 3
THE FUNDING GAP…
LAUNCH
You’re earning money from day 1
This is your money
trapped in the payment system
Apple Releases
your cash
PollenVC - Interface 2015
4. 4
TYPICAL LAUNCH SCENARIO
LAUNCH
Fail to get
credit with
ad networks
Can’t
reinvest to
acq more
users
You get
paid by
Apple
DOWNLOADS REVENUE
Revenue/Downloads
PollenVC - Interface 2015
6. 6
HOW DEVS FUND USER ACQUISITION
Venture Capital
Using equity financing
from yourVC is
expensive and dilutive
(and they don’t like
it…)
Publisher
The developer can’t
afford to fund UA on
their own so they
look for a publisher
and give up a rev
share.
Credit Card
High growth or long tail
developers don’t meet
the credit parameters
for ad networks, so
relegated to pre-paying.
Doesn’t work in high
growth scenarios.
Err… Not at all…
So many times, the
funding gap means that
great apps and games
never see the limelight
as devs cannot afford
to promote effectively.
PollenVC - Interface 2015
7. 7
It’s not just the cash,
it’s what you can
do with it.
7
REINVEST DIRECTLY
INTO PROMOTION
ACQUIRE MORE USERS
ACCESS FUNDING BASED
ON DAILY SALES
PollenVC - Interface 2015
8. 8
TYPICAL LAUNCH SCENARIO
LAUNCH
Fail to get
credit with
ad networks
Can’t
reinvest to
acq more
users
You get
paid by
Apple
DOWNLOADS REVENUE
Revenue/Downloads
PollenVC - Interface 2015
9. 9
LOWER YOUR EFFECTIVE CPI
BY REINVESTING WHEN
YOU ARE RIDING HIGH…
PollenVC - Interface 2015
12. 12
STEPS TO SUCCESS
Do a small scale test campaign
and measure EVERYTHING
Understand your key metrics -
LTV, D1/7/14/28 Retention,
ARPDAU etc.
Once you understand your
metrics, progress to stage 2
1 2 3Trial several networks to test
acquisition costs
Understand attribution mechanism
and underlying virality
If you can acquire users profitably,
progress to stage 3
Plan how you’ll finance your UA
campaign early
Don’t get caught short if you find
the formula that works
Hit it hard, and double down…
$$$
$
PollenVC - Interface 2015
14. 14
TAKEAWAYS
Test & Develop relentlessly before you begin to ramp up
your User Acquisition campaign. Don’t launch until you
know you can acquire users profitably!
Plan how you will fund User Acquisition growth
campaigns. Keep your equity funding in the bank!
PollenVC - Interface 2015