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The Funding Gap
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.
The Funding Gap
- 1. THE FUNDING GAP INTERFACELONDON - MAY 2015
- 2. 2 Everyone knows thestories 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’reearning 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 Failto get credit with ad networks Can’t reinvest to acq more users You get paid by Apple DOWNLOADS REVENUE Revenue/Downloads PollenVC - Interface 2015
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- 6. 6 HOW DEVS FUNDUSER 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 justthe 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 Failto 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 EFFECTIVECPI BY REINVESTING WHEN YOU ARE RIDING HIGH… PollenVC - Interface 2015
- 10. 10 MONETISATION ACQUISITION Test Refine Test Refine PollenVC- Interface 2015
- 11. 11 MONETISATION ACQUISITION SUCCESS SUCCESSFORMULA PollenVC - Interface 2015
- 12. 12 STEPS TO SUCCESS Doa 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
- 13. 13 YOUR GAME FUNDS ITSOWN UA PollenVC - Interface 2015
- 14. 14 TAKEAWAYS Test & Developrelentlessly 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
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