How Revenuecat CEO Jacob Eiting grew Revenuecat to $12M revenue and 130 customers in 2024.

hello everyone my guest today is jacob eiding he's a longtime mobile developer who's made apps used by millions of users now he's the co-founder and ceo of revenue cat where he helps mobile developers make more money with their applications jacob you ready to take us to the top yeah let's do it all right so first off um help us understand what this is it sounds like a stripe for mobile apps almost yeah that's not a terrible analogy we take the difficult and messy task of integrating with payments on the app store and google play store and we make it uh we give it a great developer experience okay so just to be clear you don't allow developers to get around the 30 percent kind of cut from these platforms you still have to pay that you just manage it yeah but we also like we'll let you integrate with payments on your website right which apple's kosher with as long as you're not um selling it directly inside the app i see okay and then how do you price your model is it a pure place sas model or percent of gmv or howdy price so it's a bit blended we have some packages start at 119 a month 4.99 a month but then we do scale that up with the amount of revenue people are tracking through our system okay interesting um if we talk just if you look at the kind of the average just talking about the sas side of the business would you say it's fair to say it's about 120 bucks a month or more something like three to three hundred bucks a month yeah i think average is probably closer to like three three hundred four hundred bucks a month okay so more on your higher tier customers yeah yeah it's interesting it really follows a parallel yeah like who ends up you know we have breakout apps and then like a long middle and then a long tail right so yep that's fairly typical put this on a timeline for me when you guys launch what year so we launched in beta right at the end of 2017 got our first app at the beginning of january of 2018 and then yc and we launched in the summer of last year um what is so hold on just be clear so 2018 first customer january uh you then went through yc yeah we were yc between june and august we launched in june and by launch i mean we came out of beta we had a few users before that like 10. yeah and then we launched and and uh announced that we were nyc and all the stuff and that's when we really started to take off that's great so how many customers are you now serving today um so paying customers it's like 130 or so but we have like 600 apps using our sdk on the app store right now that's nice of you so what what allows people to keep using you for free what threshold do they have to hit before you ask them to pay so if you just need the basic like user experience or like developer experience improvements that our sdk provides like a very basic dashboard it's and you're making less than 10k a month like we don't charge anything okay okay that's great so it's it's again it's not based off like number of transactions number of volumes or downloads just less than 10 grand a month you're good to go exactly exactly that's great okay now how aggressive or not aggressive are you being once they've passed that threshold are we talking like one percent of gmv or three percent less i think it depends like we step it down as you get bigger but it's somewhere like a half percent is that competitive um yeah i mean i think for the value we provide that we definitely i i think we make your monetization strategy one percent more effective at least so a half percent i think is reasonable fair enough and if you look uh before i capture kind of more of the growth story and why you got excited about the space if you look at the past kind of 12 months of revenue what percent would you credit as pure sas versus your gmv model oh geez i don't know that's a really hard thing to untangle is it power law stuff though yeah i mean so yeah i mean like our top customer will make 10 times more than like our base high-end package price sorry i meant your pricing in other words does the sas model make up more than 80 percent of the total revenue and gmv's base is about more like 20 percent um yeah maybe maybe like 60 60 40 or something like that uh for the like for like build it's it's it's all kind of just positioning and packaging i kind of don't look at it like that uh it's like it's almost like you have to buy so let's say like our high tier is 500 bucks a month but you also get 100k in gmv based pricing for free with that so it's almost like bundling these like minimum price points which kind of just like helps us to like weed out and like create some like levels of like basic commitment from people to like use our platform right yeah yeah for example your grow 500 a month plan you get a hundred thousand dollars in monthly tracked revenue for free then once you're over that threshold there's some gmv component what you're saying is over the past 12 months 40 of your revenue has come from people on these plans that have gone over the mtr level exactly yeah roughly something like that right yeah yeah we're splitting hairs here i don't really care the actual number i'm just curious about the pattern right yeah so what i mean i guess my question to you is to simplify things why not go hard one way or the other um because frankly if you tell people you're going to take a flat percentage of their revenue people don't like thinking in that terms it's just it's like oh like i earned that i'm already giving apple 30. i don't want to get revenue cap 0.5 right so it's a bit of a jedi mind trick to kind of be like oh well you can buy this package it's a little more predictable right um but for us like the only way our business works and that we stay aligned with our customers is if we're able to scale with them right um and so that's why like i'm really adamant on the usage-based pricing because otherwise we really are have some misaligned incentives with our customers yeah so what's the reach today look like so across your 600 apps using i mean how many downloads are you processing per month or how many like individual transactions per month you think i'm not sure about um so like total monthly volume is in the like 6 million or something right now in revenue that we're tracking for our customers um and so and as far as like users it's i think it's got to be close to like 30 million monthly active users yeah that's great interesting scaling issues from an api perspective yeah but what's your well you know it sounds like you've probably built a good team around you what's your team look like today um so there's just six of us it's my co-founder and i um and some some basically all engineers okay so six of you guys and um it sounds like you raised capital how much have you raised a date so 1.5 in our seed plus the yc120 yeah okay so call it kind of 101 1.7 points jake could be cut out there sorry 1.7 million oh sorry i said 1.62 yeah 1.62 that's good and then um take me back to kind of like day one right so one of the things i always like to understand is like how how quickly were you able to get your first dollar revenue in the door so what did you guys spend kind of all in building the mvp before your first dollar revenue do you remember it's interesting uh so my co-founder was working part-time so he was working full-time at a the previous company that him and i worked together like he was still working there i had left to start a company so i was living off of my wife's salary and wrote and him and i him on his weekends and nights and me like full-time like wrote in the in like three months or so the first version um and i think we invoiced our first customer from starting writing code in september to our first customer we invoiced in january or february okay so called four months yeah yeah that's great and did you i mean again most that was sweat equity it sounds like yeah i mean of course like i was the there's a like opportunity cost like i wasn't working at the time but like yeah it was it was us just doing it ourselves how did you discover this was a problem so my co-founder miguel and i previously worked at elevate which was a app of the year big subscription-based brain training app and we were building a ton of this infrastructure internally and it was sucking up a ton of our developer resources and so i just knew that like lots of other companies were suffering from this so i like i actually asked around right when i was thinking of ideas for like what i wanted to do next i like asked just like a handful of companies that i knew that were working on in this space and they were all like yeah we hate this problem and so i was like okay that's a probably pretty good sign how was everybody doing it back then were they all building it internally yeah yeah it's basically like rolling your own and like i think people get tricked because they think apple and google handle all the hard work for you and they do do a lot of it but they kind of just give you enough like enough to enough stuff to get started but you really need to you really need to end up building a lot of infrastructure to provide the user experience that most people want yeah have you had...