The Power of Freemium and User Acquisition

On the podcast: The ultimate freemium strategy, making low-risk bets with potentially asymmetrical outcomes, and how Aaron bounced back after almost running out of money.

Top Takeaways

📐As an app startup, while in the early stages of growth, you need to find the one KPI that you’re going to choose to focus on. “Startups can do one thing, barely,” says Foss, so find the KPI that shows that your app is working as intended and that users are finding value. For Nomorobo, this was robocalls blocked; if this KPI grew, then the app was doing its job and users were signing up.

🚀 Not every launch needs to go off with a bang. For Aaron Foss, there’s too much that can go wrong. Soft launches allow you to launch when you’re ready, not when your deadline says you are. You have the benefit of seeing and catching bugs before your app becomes overwhelmed with users.

🌱 To grow organically, and only organically, requires that you find the growth “hacks” that leverage what you already have. For Nomorobo, this meant making use of a free web user base to promote the paid app; programmatic SEO landing pages built using the data they were collecting; and using that data to outreach to the press with relevant stories.

🔎 The benefit of growing slowly and sustainably is that constraints lead to greater focus. When raising money to accelerate your business, it’s easy to overextend and do too many things at once. A slow, gradual approach forces you to focus on what’s the most important thing right now.

🛣️ Freemium works best when you consider it a user acquisition path, not a revenue model, and when those free users deliver additional business value. Being free will bring you more users, but what else do those free users deliver to your business? For Nomorobo, free users on the landline side bring in data to improve the mobile product, which can then be upsold to turn free users into paid.

About Aaron Foss

👨‍💻 Founder of Nomorobo, an app that stops annoying robocalls and spam texts forever.

💪 With a background in programming and an MBA, Aaron built an entire product to stop robocalls from the ground up.

💡 “This is Apple’s world: We just live in it. How insane is it to start an app company building an app that is against App Store rule?”

👋  LinkedIn | X, formerly known as Twitter

Links & Resources

‣ Connect with Aaron via LinkedIn

‣ Check out Nomorobo

‣ Check out this Mixergy interview about Aaron’s entrepreneurship journey

‣ Read up on how Aaron beat robocalls for good

Episode Highlights

[1:25] The end of apps?: Aaron was between selling his last company and looking for the next challenge when the clarion call came from the FTC to tackle robocalls.

[3:46] From telephony to commerce: For Aaron, $50K signaled that there was a big incentive to solve the problem of robocalls. The size of the bounty drove him to try to develop an innovative solution using existing technology.

[12:26] Close to the chest: Getting a product out validates whether spending your life building it is a good idea or not. Aaron found that the only way to win the competition was using SimRing, but he didn’t go into detail when pitching it.

[13:39] Post-win gameplan: Twilio (and a lot of negotiation) was the key to building the foundations of early Nomorobo.

[17:44] Monetization turning point: As one of the first subscription apps with in-app purchases, Nomorobo’s inflection point was the introduction of mobile apps. It turned out that a price point of $1.99 was cheaper when running with Apple.

[21:47] Big bang, no thanks: The demand to solve the problem of spammy robocalls meant Nomorobo never needed to do any paid acquisition.

[25:43] Hiring decisions: Going from solo to building a team is never an easy leap. Aaron found that the first step was to break off customer support, and another key was to work with contractors while remaining small and scrappy.

[30:59] Relaxed raising: The company found that raising on an as-needed basis worked perfectly well for their setup, but it didn’t come without its trials. Case in point: the white-knuckle $944 in the bank account that Aaron admits they were lucky to pull off.

[35:16] Top growth levers: While Nomorobo never paid for advertising, it had to grow. How did it manage to, and why is landline protection still free?

[42:38] Press management: With landline freemium strategy and programmatic SEO locked down, the next phase was managing press and getting featured by Apple.

[47:41] Life-changing money: Like Frank Sinatra, Aaron did things his way. He shares the story of the eight-figure exit.

[53:17] Value creation: If you want to run a business, it must create value. The more value you create, the more money you make.