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LATEST POSTS 📚

If you’re new, not yet a subscriber, or just plain missed it, here are some of our recent editions.

☄️ Multiple Exits, Founding Hatch & Building In Asset Management. An interview with Amar Varma, co-founder & CEO of Mantle.
🛠️ Google Exited Founder, Building The AI Agent Era. An interview with Jacob Bank, founder & CEO of Relay.app.
🕵🏻‍♂️ Deel, Ripping & The History Of Corporate Espionage. A spy story of the grandest scale in the world of payroll management.

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Start with Vanta’s Compliance for Startups Bundle, with key resources to accelerate your journey.

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HOUSEKEEPING 📨

I’m super lucky to be able to meet the people I meet running this newsletter. Yesterday I met with the mad scientists at Attio to talk about how they build incredible product for an upcoming piece with them. Then today they launched their Call Intelligence feature inside of their CRM. Gone are our days of manual note taking. Every note, highlight and action item is already pre-loaded into the system for me. It's a thing of beauty.

I told Brendan, the Head of Design at Attio, that for me to spend time learning from them feels like I am learning from the best product builders in the world. It's kinda like magic. If you haven't tried Attio you are missing out. Trust me. Anyway, today we have another banger ready to go for you. I hope you thoroughly enjoy it!

GUEST POST 💄

How To Grow Outside The App Stores

Apple have done some really nice things in the world. They created the famous 1984 Super Bowl commercial. They invented the AirPods. Pretty neat. Heck, even the idea of combining an iPod, mobile phone, and personal computer worked out pretty well until we all started staring at our screens for 8 hours per day. To be clear, I am an Apple fanboii.

But in the years between that 1984 commercial and today, Apple have matured. The phrase once uttered by their famous founder of; “It’s better to be a pirate than to join the Navy” no longer be applies to them. Apple are not the pirates anymore. They are the tax collectors of the Internet.

Just like the Government collecting taxes IRL which equate to roads, healthcare, and social services more broadly, app developers get an incredible infrastructure to build inside of when partnering with Apple. Sounds good right? Well, yes and no.

As we all know, business is hard. And margins are the lifeblood of organizations large and small. Sure, Apple provides a great service, but you need to pay for it. And pay big. But there is another way to grow, outside the app stores, that can not only enhances your margins, but open new markets, limit churn and more.

So Today, I am handing the reigns of this newsletter to my friends at Paddle, and in particular, Tom Patterson, who is going to walk you through how you can maximize this channel to boost your app’s growth in 2025. This is how to grow outside of the app store. Enjoy!

A little backstory

Hey team, Tom from Paddle here. So, for the past 15 years, Google Play and Apple App Store have dominated the mobile app market, connecting millions of developers with billions of customers worldwide. And it's easy to see why. These app stores offer a convenient solution for distributing your app globally while managing the complex aspects of payments, privacy, and security. They provide excellent platforms for launching apps and building a user base, though they do impose strict guidelines and platform fees.

As app development has evolved into a mature industry, so have the companies behind successful apps generating millions in revenue. With publicly-listed app companies now common, and consumers downloading more apps than ever, plus spending more money than ever on apps, the demand continues to grow. But this market evolution has pushed developers to look beyond app stores for new growth opportunities. One of those being selling your app on the web.

This approach also offers more flexibility in how you handle subscriptions, marketing, and retention strategies. Today we’ll run through the acquisition strategy, outlining it’s core strengths and shining a light on the misconceptions and particular use cases.

How did we get here?

The app stores levy an average 30% commission fee on app transactions. According to the Coalition for App Fairness, Apple makes over $15 billion a year from this fee alone, enabling the Apple App Store to generate more revenue than 90% of the Fortune 500. For many developers, this fee can heavily impact their bottom line.

In early 2024, the EU's Digital Markets Act forced Apple to introduce changes to its European Union app store fee structure. The company lowered commissions to 10% and 17% based on mobile app revenue. However, developers choosing this new fee arrangement must also pay a €0.50 ($0.54) ‘core technology fee’ for each download beyond one million, plus an additional 3% charge when utilizing the App Store's payment processing system.

It's undoubtedly a substantial slice of revenue that has many developers looking for creative solutions to maximize their profits while maintaining their presence in these powerful marketplaces. Enter: the Web2App strategy.

Web2 what?

Web2App is the process of converting and monetizing traffic on the web before guiding users to your app. In a typical Web2App strategy for subscription apps, you attract traffic from the web, guide users through web-based onboarding, have them sign up and purchase on the web, and then direct them to download and use your app after payment.

📌 Important to note: Web2App isn't meant to replace selling on the App Store but rather to complement your existing app store strategy.

The benefits

While app stores offer a straightforward path to market, they can limit your revenue potential. Monetizing your app on the web opens five key opportunities.

1. Reach an untapped audience

The App Store draws 650 million weekly visitors and Google Play boasts 2.5 billion active users. However, with 8.5 billion mobile subscriptions worldwide, selling via the web gives you access to a much larger potential customer base. There's only a 15% audience overlap between web and app store users, meaning you can reach many new customers.

2. Increase Lifetime Value (LTV)

The mobile game market generated $110 billion in 2022, but platform fees consumed roughly 30% ($35 billion) of that revenue. By selling on the web, you avoid these high commission rates and platform fees, allowing you to boost your app's lifetime value while potentially reducing customer acquisition costs.

3. Enhance marketing effectiveness

Since Apple's 2021 privacy changes, IDFA has been available only with user permission, with less than 10% of iOS users opting in. Combined with SKAdNetwork limitations, this has restricted marketing capabilities and driven up advertising costs.

Web marketing has fewer restrictions, giving you:

• Clearer campaign performance data

• Lower-cost ad testing

• More precise channel traffic analysis

• Better purchase attribution

• Faster iteration cycles

4. Reduce customer churn

Involuntary churn accounts for over 23% of customer loss on the App Store. Web sales give you better control over churn risks, allowing you to implement strategies like smart payment retries, email reminders to update payment details, and salvage offers (discounts, plan transfers) for those considering canceling.

5. Gain pricing and offering flexibility

App store rules limit your marketing options by restricting price testing, bundling, and discounts. Selling on the web lets you customize subscription packages and price points to drive higher-value purchases though through, flexible trials, better-value term lengths (annual vs. monthly), and B2B offerings with per-seat pricing.

Understanding Apple’s T’s & C’s

There’s a belief that Apple doesn’t like app companies to sell their products on the web when you can access this same product in the app store. This is not true. The TL;DR is that it’s not against Apple’s T’s and C’s to run web2app funnels. It is against their terms of service in most cases in the US to link directly from your app to a website where people can purchase. Here’s what’s allowed:

1. Running web acquisition funnels: You can acquire users on the web and convert them through a web checkout before directing them to download your app.

2. Taking payments on the web: You can accept payments on the web for content or subscriptions that users will access in your app, as long as users aren't being directed from within the app to make these web payments.

3. Email marketing to app users: You can email users who have created an account in your app to inform them they can purchase on your website, potentially at a better price, as long as this doesn't happen within the app session.

4. Marketing channels outside the app: You can use any marketing channels (social media, search, etc.) to direct users to your web experience rather than directly to the App Store.

It's important to note that Apple's Terms and Conditions differ significantly by region—particularly when comparing the EU and the US. These differences primarily revolve around payment mechanisms and external linking permissions. Below is a summary to help you understand the key distinctions between these markets.

📌 UX consideration for the EU: Users will see a warning screen from Apple before leaving the app to make a payment stating “You are about to leave the app store.” This may negatively impact conversion rates.

But reader apps are treated differently

Apps whose primary function is to deliver content purchased elsewhere (like Spotify, audiobook apps, etc.) may apply for an ‘External Link Account Entitlement’ that allows them to link directly from their app to their website for payments. In this case, the company can take payment and not have to pay Apple’s a fee and it will work out.

The key distinction is about directionality, particularly regarding the payment flow. You can acquire and convert customers on the web and then direct them to your app, but you generally, in the US specifically, cannot direct users from your app to the web for payments.

The East to West shift

One of the most interesting aspects of this shift to Web2app has been the direction of geographical travel. It is a shift that is very clearly going from East to West.

The graph shows the growth rates of web subscriptions by region. You can see that EMEA and APAC are leading the charge ahead of North America and LATAM. Different regions are at different stages, but it’s growing everywhere!

This data is included in RevenueCat’s 2025 State of Subscription Apps Report. We contributed a few things to this huge report—our dataset on the web growth of apps, some commentary on where the brightest spots are, and an integration with RevenueCat.

So what apps are best for Web2App?

Not all mobile apps benefit equally from a Web2App strategy. Apps that need to build trust, demonstrate value, or personalize experiences before a user commits to downloading tend to benefit most from the Web2App approach. They tend to look like the following.

Taking payments on the web: Do MoR or DIY trying

One of the key benefits of the app stores is that they manage all of the infrastructure of selling your app globally.

There are two main types of payment solutions you can choose when selling on the web: a Payment Service Provider (PSP) or a Merchant of Record (MoR).

Payment Service Provider (PSP)

PSPs like Stripe and Checkout.com serve as intermediaries connecting your customers' bank accounts with payment networks such as Visa and Mastercard. While PSPs assess fees for processing transactions, they don't assume the role of legal seller or handle additional financial responsibilities including disputes, refunds, fraud management, or tax collection.

They're most appropriate for applications focused on a single country or region without requiring international payment capabilities or global tax compliance management.

Merchant of Record (MoR)

Solutions like Paddle function as the Merchant of Record or MoR and serve as the official legal entity selling your mobile app to end users. Consider how the App Store functions when you distribute through their platform. MoRs operate in the same way but offer significantly reduced fees along with greater flexibility.

An MoR handles the complete spectrum of payments management while also assuming responsibility for financial obligations such as dispute resolution, refund processing, sales tax collection and remittance, and maintaining Payment Card Industry (PCI) compliance.

To illustrate the difference between these options, we came up with the phrase you've got to do more (or MoR) or DIY trying.

The DIY payment stack is one option where you use a PSP but then you’ve got to build something for buyer support and for fraud and refunds and chargebacks and sales tax compliance and a whole bunch of other stuff and stitch it all together. Whereas, a Merchant of Record (MoR) takes care of it for you.

So when you're thinking about this choice, if you go with a PSP, that's totally fine but just think about the other things you've got to do as you scale.

App companies selling outside the app stores

Headspace

Headspace, a leading mindfulness and meditation app used by tens of millions globally, strategically sells outside the app stores through personalized web-based experiences. Their Web2App approach begins with engaging, interactive quizzes designed to assess users’ unique mental wellness goals, stress levels, and sleep patterns. After this initial assessment, users receive customized mindfulness and meditation plans directly on the website. The tailored results demonstrate immediate value and help build user confidence in the subscription offering.

Purchases occur seamlessly on the website, allowing Headspace to bypass restrictive app store commissions. Following subscription, users download the app and log in effortlessly, where their personalized wellness programs are immediately accessible, enhancing user satisfaction, retention, and lifetime value.

Goodnotes

Goodnotes is a digital note-taking app designed for students, educators and businesses with over 24 million monthly active users spread across 144 countries. In 2023, Goodnotes wanted to go multi-platform and sell the app in the App Store, Google Play Store and on the web. But it didn’t want to manage its own payments stack or take on the responsibility for sales tax in over 100 jurisdictions. Goodnotes decided to launch the new version of the app with Paddle as its Merchant of Record.

Duolingo

Duolingo, the world’s most popular language-learning app, boasting over 500 million users, actively monetizes outside the app stores with a robust Web2App strategy. By leveraging an intuitive web-based onboarding experience, Duolingo engages prospective users through an initial assessment that identifies their language proficiency, learning objectives, and personal preferences.

Users can preview customized lessons and see clearly articulated progress milestones before making any payment commitments. The transparent pricing and personalized recommendations significantly reduce friction and drive web conversions.

After subscribing via the website, users download the Duolingo app, immediately gaining access to their personalized language-learning plan. This strategy not only enhances conversion and retention rates but also enables Duolingo to effectively control subscription pricing and circumvent app store commissions.

Blinkist

Used by over 28 million people, Blinkist finds the most relevant, impactful books and podcasts and distills them down to their key ideas, which can be read or listened to in 15-minute explainers called Blinks. Blinkist has successfully deployed a Web2App strategy to acquire users outside the app stores.

Their funnel is built on appealing to users through engaging ads on ad networks and then directing them to an onboarding quiz on the web.

From here, the user is prompted to sign up to see their plan before going to the paywall page which shows different plan options and discounted pricing. The customer pays on the web and is then directed to download and log in to the app to get started.

HubX

HubX’s apps boast over 100 million users worldwide. Its Nova app turns any phone into an AI-powered assistant, DaVinci transforms words and images into stunning artwork, PhotoApp is the fastest and most powerful photo enhancer app, and PlantApp can identify over 100,000 plants with over 80% accuracy.

Paddle’s Merchant of Record model immediately appealed to HubX, as well as the ability to easily add new payment methods and offer over 30 currencies, and its built-in churn prevention tools.

How you can apply this

So hopefully by this point, you’ve seen the opportunity on offer with executing a Web2App strategy to drive app growth. The next step is charting your implementation plan. Here are some pointers to get you started.

• Assess your readiness: Before starting, clearly evaluate if adopting Web2App matches your business goals, current resources, and growth stage effectively.

• Define your funnel strategy: Decide precisely on the funnel structure and determine how it will integrate smoothly with your existing customer acquisition methods.

• Start small and focused: Initially launch with a minimal, achievable Web2App implementation to quickly validate results and reduce risk before expanding further.

• Measure performance accurately: Continuously collect clear data and metrics from your initial tests to inform iterative improvements and strategic adjustments.

• Scale based on data: After refining your funnel with validated performance insights, strategically expand successful tactics, reinvesting confidently in growth opportunities.

Remember that the business case for Web2App isn't built on avoiding app store fees alone, it's about creating more flexible acquisition paths, leveraging faster experimentation cycles, and ultimately, accelerated growth for your app business.

By thoughtfully implementing Web2App strategies that complement your existing app store presence, you can create a more resilient, adaptable, and profitable app business ready to thrive in 2025 and beyond.

Extra reading / learning

• Paddle Is Building The Merchant-Of-Record Category - February, 2025

• Unfiltered: The Details Behind Vanta's Meteoric Rise - March, 2025

• Deel, Ripping & The History Of Corporate Espionage - March, 2025

And that’s it! You can follow Tom on LinkedIn and also checkout Paddle on their website to learn more.

HIRING ZONE 👀 

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TWEETS OF THE WEEK 🐣 

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