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Much more than $5, closer to $10. He still has to afford to live, as he currently does with Apollo's current subscriptions, plus pay reddit's API costs. This is

by sli 3y ago

Much more than $5, closer to $10. He still has to afford to live, as he currently does with Apollo's current subscriptions, plus pay reddit's API costs. This is according to his comments on reddit about this situation. $10/month to use a free website on your phone is just not a very attractive deal at the end of the day.

that_guy_iain 3y ago
Your numbers are wildly outthere. $2.50 would be the API costs per user. So $5 would cover, take in some money and pay appstore feeds. And if you're looking at 10% of his userbase, that would be about 4 million a month income with 2 million being for Reddit. Based off his claims of 20 million a month with a $2.50 cost per user. I'm sure he'll be able to survive off $1,000,000 a month profit. Edit corrected the numbers: $2.50 a user for API costs. $5.00 a month subscription would cover that cost. $1.50 going to AppleTax. $1.00 a user to the indie hacker If 5% of users that would cost $20MM sign up for $5 a month it would be $2,000,000 a month overall revenue. $1,000,000 to Reddit. $600,000 to AppleTax $400,000 a month to the indie hacker.
- bee_rider 3y ago
  I don’t know about the specifics of the business to intelligently critique your calculation, but it couldn’t possibly be the case that somebody turned down an easy million dollars a month, right?
  - that_guy_iain 3y ago
    If I was to guess, the standard indie hacker thought is happening "I can't raise prices" and "lots of people don't want to pay". When they're seeing 90% of their user base say I'm not paying that, it's easy to forget the 10% that would. The 10% that would probably haven't even spoken up. And there is also probably a part of him that doesn't want to be greedy. But is it greedy to sell your software for $5 a month? I don't think so.
    - bee_rider 3y ago
      Is the 10% based on anything (I figure this is Hackernews so it is non-zero chance that you or someone else knows something about conversation rates for these kind of apps). My gut thinks it is high but I have 0 experience.
      - that_guy_iain 3y ago
        10% is a low estimate based on conversion rates I’ve seen people post on conversion rates. Standard apps with freemium the rates are 1-10%, Reddit however is used a lot so a mobile app will be used daily (900,000 daily users out of 1.2 million overall) it already converts at 1.50 a month. It would be somewhat reasonable to think Spotify-conversion rates of 30% would convert.
        bee_rider 3y ago
        That’s pretty good. Dang, maybe there’s room to make a Reddit app, haha.
- ta_6104828 3y ago
  Towards the end of the video (around the last 7min iirc), he explains the business problem in better detail. He says that he can charge more and still make a living. However, the price change goes into effect July 1st of this year. That’s less than 30 days from now. The issue is all the current premium users who have 2-12mo left on their subscription suddenly become a huge liability. He cannot suddenly ask for more (against apple rules), and he must not remove features they paid for (apple will issue a refund to them).

by sli 3y ago

that_guy_iain 3y ago

Your numbers are wildly outthere. $2.50 would be the API costs per user. So $5 would cover, take in some money and pay appstore feeds. And if you're looking at 10% of his userbase, that would be about 4 million a month income with 2 million being for Reddit. Based off his claims of 20 million a month with a $2.50 cost per user. I'm sure he'll be able to survive off $1,000,000 a month profit. Edit corrected the numbers: $2.50 a user for API costs. $5.00 a month subscription would cover that cost. $1.50 going to AppleTax. $1.00 a user to the indie hacker If 5% of users that would cost $20MM sign up for $5 a month it would be $2,000,000 a month overall revenue. $1,000,000 to Reddit. $600,000 to AppleTax $400,000 a month to the indie hacker.

bee_rider 3y ago
I don’t know about the specifics of the business to intelligently critique your calculation, but it couldn’t possibly be the case that somebody turned down an easy million dollars a month, right?
- that_guy_iain 3y ago
  If I was to guess, the standard indie hacker thought is happening "I can't raise prices" and "lots of people don't want to pay". When they're seeing 90% of their user base say I'm not paying that, it's easy to forget the 10% that would. The 10% that would probably haven't even spoken up. And there is also probably a part of him that doesn't want to be greedy. But is it greedy to sell your software for $5 a month? I don't think so.
  - bee_rider 3y ago
    Is the 10% based on anything (I figure this is Hackernews so it is non-zero chance that you or someone else knows something about conversation rates for these kind of apps). My gut thinks it is high but I have 0 experience.
    - that_guy_iain 3y ago
      10% is a low estimate based on conversion rates I’ve seen people post on conversion rates. Standard apps with freemium the rates are 1-10%, Reddit however is used a lot so a mobile app will be used daily (900,000 daily users out of 1.2 million overall) it already converts at 1.50 a month. It would be somewhat reasonable to think Spotify-conversion rates of 30% would convert.
      - bee_rider 3y ago
        That’s pretty good. Dang, maybe there’s room to make a Reddit app, haha.
ta_6104828 3y ago
Towards the end of the video (around the last 7min iirc), he explains the business problem in better detail. He says that he can charge more and still make a living. However, the price change goes into effect July 1st of this year. That’s less than 30 days from now. The issue is all the current premium users who have 2-12mo left on their subscription suddenly become a huge liability. He cannot suddenly ask for more (against apple rules), and he must not remove features they paid for (apple will issue a refund to them).