Why Opal Stopped Chasing Revenue to Build a Billion-User App – Kenneth Schlenker

You read a lot today about the billion-dollar one-person company. Do you buy into that? Basically, someone, you know, AI can just, you know, like code their way into getting to, you know, 10 million, 20 million, 30 million dollars in in revenue and then create this massive company. I think that's a lie. >> Hello, I'm your host David Bernard. My guest today is Kenneth Schlenker, co-founder and CEO of Opal, the Focus Company.

On the podcast, I talked with Kenneth about why retention is the only real note, how dropping paid conversion from 20% to 9% increased revenue, and why he sees the rise in competition as a net positive for Opal. Hey Kenneth, it's so great to have you back on the podcast. >> Thanks so much for having me back. >> So, we've got a lot to catch up on. You know, last time we spoke, you were at 5 million in ARR. You since shared that you hit 10 million in ARR pretty soon after that. So, you were scaling rapidly, and now hit over a million daily active users. So, I mean, the app has just been taking off. So, I wanted to talk through some of that with you and and, you know, see see what it's taken to get there. So, yeah, tell me first about like what it took from last we spoke at 5 million to get to that 10 million.

>> Yeah, it sounds uh

now now long time ago, but yeah, we had a great conversation last time. Uh we're really in the process of scaling with at the time a hard B2B, and we uh we got to, you know, scale pretty efficiently with a small team. I think we reached 10 million dollars in ARR with like like 11 people back then. But, you know, after that, what happened was we weren't growing as fast as we'd like in terms of users. And, you know, for us, what what really matters is to be able to uh create a product that can be used by lots of people uh because we're addressing this massive issue. And so, you know, we stopped kind of focusing on on on revenue. We really focusing on like what product can we build that can can be a billion user product. And so, that's the trajectory that changed and happy to talk about about the stuff that we've done to to get there.

>> Yeah, you know, one of the things

you you just did a great talk at Tokyo App Growth Annual last week and you know, I got to hang out a little bit in Tokyo. One of the things you shared in that talk was that you had a mind shift mindset shift from efficiency to company building. Tell tell me a little bit about that. >> Yeah, you know, I think this is maybe a counterintuitive take, but you know, you see you read a lot today about the billion-dollar, you know, one-person company. If you buy into that, basically someone, you know, AI can just you know, they could their way into to getting at to, you know, 10 million, 20 million, 100 million dollars in in revenue and then, you know, create this massive company. I I think that's a lie. I think that actually the companies that actually do uh reach a billion people and billions of valuations, they need more than than one person. They actually need a team.

Uh you need you need a brand. You need you need retention and AI can be used to kind of improve uh the value that uh the product gives to users and then and only then I think you can really kind of create massive massive amounts of value. And so, yeah, I think that was the topic of the talk which which I gave at the conference. I think, you know, a lot of the apps that we see today, they're coming online and I I love you the entrepreneur. You'll you know, kind of read us also seeing lots of people they're being able to create new stuff. But I think also it's important that people understand that uh there needs to be more than that to be able to build massive companies. And so, that's the that's the shift that we've been on where, you know, what we want to do is we want to make sure we can create a product that is on path to to be a billion user product. And so, you know, starts with a team, like figuring out

the right kind of team, building a brand, building a product that has a lot of retention, and then figuring out how to actually use AI to improve the value we give to users. >> Yeah, a quote from your talk that I

really loved was teams create product soul. You can't buy code a brand. I love that. Like what what's your thinking there? >> Yeah, you know, I think maybe sometimes people think that apps are just like, you know, tools, but actually people want to connect with the apps that they use. They want to they want to feel something. So, you know, brand is super important. I think some of the best, you know, apps out there like have have this soul in them. And I think that in order to to have that soul, you really need kind of people >> [snorts] >> that are really caring about this. And you know, this have like to have a it doesn't have to be a lot of people. You know, some some very small teams create like really soulful products. But I think that a recipe for for for failure in my mind is to create something that has a function, which AI does really well. I can basically create, you know, note-taking app. You

can create like calendar apps. Create like whatever you want. That's just a function. And but, you know, you need more than that to be able to be successful in my mind. >> Yeah, and and one last AI take before we

kind of move on back to like more Opal specific stuff. What are your thoughts on people saying AI is going to eat all of consumer apps? That you know, you seen this. I mean, competition for in the screen time space is huge. And then AI has unlocked the ability to spin up a screen time app quicker than ever. And that's actually a popular category that I see a ton of Indies launching into. So, how do you think about the way that's going to impact Opal's business?

And then how do you think that's going to impact the app economy more broadly? >> Yeah, there's a lot of there's a lot of screen time apps here since we went on There was someone on the podcast. Actually, someone came to the conference last week and and walked up to me and said, you know, that she was super inspired by Opal and and that created her own version of a screen time app and I think it's one of the, you know, kind of very popular categories these days. The thing is that you First of all, I think what the way I see competition is a thing that it's it's actually a net positive for us. I think what it does is it helps, you know, more people realize that this problem is real, educate the market, get more people to use apps and there's, you know, there's 5 billion people in the world that have a smartphone and maybe today probably, you know, give or take a few dozen million that have used a screen

time app or using a screen time app. So, there's still, you know, kind of massive opportunity to grow. I think the challenge is problem is that when um a lot of these apps are actually kind of copying, you know, existing existing stuff. So, instead of trying to to to build out new categories and and kind of reach out to newer kinds of people, you know, they're they're they're limiting themselves by by just copying what exists. And so, you know, in my line, like the biggest challenge for screen time is if I walk down the street and I talk to 10 people in any city, could be, you know, in Texas and in New York, wherever wherever it is, and I ask people, you know, random set of people like, "Do you spend too much time on your phone?" Everybody will say, you know, yes or maybe like eight out of 10, right? But then if the next question is, "There's an app, right? Would you download this app to help you?" Um

today, you'd lose a lot of people because a lot of people say, "What do you mean an app to what to do? How do I manage How does it help me manage my

screen time? Is it going to be blocking apps? Like that's crazy. That's not really something that I want to do." And so, the problem that I think we need to to to address as a as a category is like, how do we actually create something that these people can use that's not, you know, what Opal already does, but that's like what, you know, other things. And that's really what we're we're trying to build for for Opal, which is like figuring out how we can make it so much easier to to use a screen time app, no setup required, and that it's not just about restriction, that it's really about being able to kind of coach you in your day-to-day.

So, that's kind of a long-winded answer, but I think that, you know, I applaud like competition. I think it it helps educate the market, but I think it's also, you know, the opportunity is is much larger, and it's it's going to require innovation and new kinds of apps and completely new kinds of UI that you're probably not going to get by just, you know, typing in, you know, in cloud like, you know, make an Opal copy in in 5 minutes, right?

>> Yeah, and you know, we we've seen this play out for years, even without AI coding. It, you know, it's not that hard. The engineering side is is a lot of hours, but it's not some insurmountable thing, and it never has been. And so, you know, you look at some of the big categories like a language learning, you know, Duolingo, despite the recent, you know, setback in its stock price, is still a multi-billion dollar company making over a billion dollars a year. And then you look at that category, and there are just so many apps, and huge ones, you know, Babbel is is massive, you know, right up there nipping on their heels.

And so, I I I I think, you know, for the broader industry, and then for Opal specifically, you're still going to have category winners like Opal that are like the brand in the space, even if there are hundreds of apps that do the same thing. And to your point earlier, it's like, yeah, you can copy Opal pretty, you know, or easier than ever to copy aspects of Opal, but you you can't copy the soul. You can't copy the taste that went into it. And and as people experiment with these apps, they'll probably be hungry for more, and then go looking for the best app to do it. And I think, you know, Opal as kind of the the the leader in the space and as you've grown the team and improved the product, it just becomes this like momentum that isn't going to get stopped by 200 more people by coding in other screen time app.

>> Yeah, I mean, I I can I bring you in my next investor pitch? I love that. >> [laughter] >> No, I I I fully believe it. And then one more thing is, you know, we talked about what happened, you know, since the last podcast and one of the things I mentioned is that we had a hard day. Well, now we're truly freemium. So, we give away the product for free. And that's also something that I think is is very valuable for us in the long run because, you know, we're getting to a point where, you know, we passed a million DAUs as as as you said and we're growing really fast. And it comes to a point where, you know, people have heard about the app and they hear it from their friends. And we see a lot of interesting dynamics of, you know, students that are, you know, using it together. We see interesting dynamics also in the family world where, you know, you have maybe a teenage a teenager in the family that's

using the app and actually recommend it to their parents all the other way around. And so, all of that makes it,

you know, makes our our position stronger. And, you know, it's activating kind of these network effects. And it's really powered by freemium. And I think it it's That's why, you know, I'm very confident in in the future of consumer apps in general. I think when you when you have a great product that has retention, that has a great brand, you're in an excellent position. And I think what you can do on top of that is you can either use artificial intelligence to actually improve this product. And by improving this product, what I mean is not saying just moving the metric metrics. It's really like, how do you actually really improve the value that you give to users? And if you're very confident the value that you give to users, that whether it's like giving them time back, which is kind of what we do, or making more productive, or whether it's you helping going to learn language, you can actually use AI to make that better

and that really will make your product a lot a lot stronger. And so, I think you know, it's interesting and I'm sure you see this all the time maybe in the public markets at least you know, the the the apps software you know, SAS of course and and also some consumer software is getting really it gets punished by the market to say hey, they're not kind of AI native. But I think that it's it's a bit of an I I think it's some misunderstanding of what consumer apps really are.

It's not just function, it's also entertainment, it's also something that people like to do and something that people love. It's and so you can't just replace that with an agent or something else that does it automatically. >> I wanted to dig a little deeper into the the switch to freemium cuz that was a big deal for Apple. You shared a slide in your presentation showing that your download to paid dropped from 20% all the way down to 9% which sounds super scary to have your conversion more than cut in half. But why why did that ultimately end up being good for the company?

>> No, that we we did that. So we

gave away the product for free. And you mentioned that you know, our yeah, paid penetration. So that's how many people you know, are paying subscribers within the monthly active users you know, went from about 20% to to 9% and that's scary when you when you see this chart, but it was the right decision. The reason it's the right decision is because when you give the product away for free the people that are using the product become your marketing. And so what we've seen as a consequence is also a shift where we have a lot more organic growth than we ever have. It's massively increased and you know, what we're able to do is we're able to kind of accelerate this organic growth as well with some features we can talk about. Another thing that we've seen is as a consequence of um a freemium is that we have a different kind with new kind user revenue segment that that exists. I mean, we started with the

segment of I would say professional pros that are interested in productivity. Uh you know, people like you and me, people probably listening to this podcast that you know, care about their time and and place a high ROI and like saving time. So, that was like the initial kind of segment, but you know, making the app free really helped us unlock uh students as a second kind of segment. So, high school students and college students were now 2/3 of our uh DAUs are our students. And what it does is not only it's great for our mission because we we know and we really want um you know, students to be able to build these healthy habits, healthy digital habits in their day-to-days. So, that's that's great for for the mission, but it's also great uh for organic growth because students talk about it. And what this also allowed us to do is now we're entering kind of a third segment that's being unlocked where you know, students

basically, especially in high school, are telling their schools, "Hey, like you know, instead of taking the phones away while we're in school, why don't we why don't you work with Opal to to be able to create a phone policy?" And so, now we have also this kind of third segment uh with schools that's opening. So, what I would say is um I think that the freemium strategy is is really helpful to be able to kind of grow organically and also kind of unlock uh unlock new segments that aren't necessarily, you know, people that would actually pay upfront for a product. And so, you know, depends on what you're looking for, you know, as a as a as an app founder, you know, whether you're trying to build uh you know, lifestyle business. You know, but but if you're trying to truly create a product that

has um the potential to get used by, you know, hundreds of millions of people or a billions of people, which is really what we think we must do because of the size of the problem we're facing, then I think freemium is a really good uh strategy to get there. Yeah, so to sum up, we we've seen a decrease in our conversion to paid, but we've also seen as a consequence of that an explosion of our DAUs, and so, you know, and revenue with it. So, it's a short-term, you know, scary drop, but what what happens in the long term is that payback is it pays back tenfold.

>> That's amazing. Uh I another thing you did share in that presentation is a question you ask yourself of where to draw the line of freemium. And I think this is a little counterintuitive and but I think really important to dig into. So, you you said, "Would a non-payer recommend the app? If no, give away more." Why? >> Yeah, I think, you know, if you want to if you want the freemium dynamic to really pay out, you need to make sure that the free users are recommending the app. Um otherwise, that doesn't work. I think that's a good way to measure the quality of your freemium product.

Uh you got to figure out whether free users are going to recommend the app. And I think that's an issue with a lot of apps I see where, you know, they're just kind of giving away a small amount or maybe it feels like a trial and then it's kind of recapped. If you do that, you're probably not going to benefit from the organic growth potential of freemium. >> Yeah, totally. It's a tough balance of what to give away and what not to. Were there were there any like specific tough calls that y'all made where it's like this really could should be behind the paywall, but like it really is such a good part of the experience that we don't want to take it away from the free users. Like what were some of the the hard decisions and and did you have to reverse any? Like did you make a bad call and then reverse it? Or how how did things go on determining what went into paid?

>> Yeah, I mean, we've made a lot of made a lot of mistakes and, you know, some success. I think the the core is to measure, you know, experiment and measure two things. So, you know, the LTV of of installs, so how people are converting and paying, and also to measure the retention overall, free plus paid, right? And so, you want to you want to make sure that you can find the sweet spot where you're increasing both. It's really hard. We have this these this feature called blocks, so basically it's you know, you're blocking apps from 9:00 to 10:00 on Monday to Friday, you're blocking social media for example. And also, it could be you know, you put you put together like an open limit, so that's you know, I can only open Instagram 10 times during the day. And so, each of these are blocks, and so, you know, we we've experimented with you know, how many should we give away for free?

You can have one, or you can have two, or three, or four. And I think today it's actually three. We've tried many different approaches, all the way from like having just one, which is pretty restrictive, and offering more and turns out that three is enough for free users to get a great experience. They can actually really use that app, try out a few different things, and then also, you know, really kind of power users that are convinced, you know, will pay because they want more. So, that's that's one where it kind of worked out pretty well.

>> Yeah, that's a great example. And and maybe a way to to think about that, yeah, it's like the people who are going to be the heaviest users, you know, what's the thing that's like most important to them, and then throttling it to where the free users still get a great experience is yeah, is interesting. I mean, and this AI is making this so tough with freemium because you you almost can't give things away, and it's hard to do a freemium app. Like I'm I've been I've coding this app on the side, and I'm I'm working on this kind of AI coaching feature, and golly, it can get super expensive.

And and you know, at first I started out like, oh, I'm going to use like Opus 4.6 cuz it's so much better, and then I was like, oh, maybe I'll use Sonnet, and then I was like, "Oh, maybe I'll use Gemini flash." And uh and it it it's tough these days to to really draw those lines and create that great freemium experience, especially if you're using AI. But even if you're not using AI, like it's just such an important place to really be thoughtful and to do some experimentation. And you know, like you said, you didn't just land on three by magic like guessing it or whatever. You tried one, you tried five, and and and you figured it out. And I think that's what what people need to take away is like you you just need to try it. And and for me, like by coding this app, like I need to see how users actually use it. Cuz maybe I can, you know, get away with a better model and more coaching and things like that. And and

maybe I can do a freemium tier, but I

don't know until I actually get it out there and start testing it. >> Yeah, I mean with AI, I think, you know, the it changes the equation because you're you're of course paying for the service of using if you're using a server-side model, you're paying for that. So, you need to make sure that, you know, the the value that you're creating is actually like higher than of course like the cost that that you incur. And I feel like a lot of people, you know, I think at the beginning I'm this way, too. You're like, you know, the value is so cool of all these tools, you know, you're just going all in and and building incredible stuff. And then there's probably like a second phase, which is wait, like does it make, you know, economic sense actually? Like, can I can I charge enough for this? Are people actually willing Is it good enough that people are willing to kind of pay for this on on top? So, it's a

different kind of reality, I guess, than, you know, when when you were just making an app that's not that's doesn't have actually like this kind of marginal cost on top of it. But yeah, coming back to I think AI, the interesting it's it's massively, you know, valuable, I'll say. And we see some incredible things. I'm like everyone fully using a lot of these tools. I think that um every consumer app is about to have AI, you know, whether it's fitness app, whether it's your learning app, finance app, or screen time app, too. But, I think the question that maybe people need to ask is, you know, how do you actually build an AI that's on your user's side? And what I mean by that is, how do we actually build an AI that actually helps um deliver more value to users.

And um I think that today there's not enough people doing that. Um and so, you know, it's it's not so much um about I think using AI to you know, maybe uh trick users into do doing something. I think it's really has to come from you What is What is the exact like core value of like why people are using my app and how can I make that a lot better uh using using AI. >> Yeah, I'll I'll I'll quote your uh presentation again, since it's all at the top of mind. I haven't done a podcast where like I actually, you know, saw the podcast guest speak so recent to the the podcast, but it's kind of fun cuz I can quote you back to yourself from the things you really nailed in your presentation. Um you said, "If your user wins, you win. That's it." I love that quote.

>> Yeah, I mean, I think it's you got to I think it's important to remember that. We can kind of get caught up with all that it can do and, you know, add some fancy features to the app. But, and you going to get, you know, if you do that, you're probably going to get a lot of like early adopters. The people get cuz like people are excited about AI right now, so they're they're trying a lot of stuff out. But, really to to really have lasting value, you need to figure out how to make your users win.

That's the hardest part. So, but it but you know, it can be it can be amazing. Um there's definitely lots of potential there. >> Yeah, it's just a such a great framing. Like, and I mean, this is how you should think about every feature. Like, does this feature feature make my user win? Like, does it improve their life? Does it enhance whatever they're doing in the app? You know, really thinking deeply about how each of those features impacts the user experience. Uh such a great way to think about it.

>> You mentioned Opal for schools. I wanted to to go deeper on that. Was this something that happened somewhat organically of students using it and them requesting schools or did you like strategize like hey, you know, this is a great almost like B2B opportunity. We can sell the schools. We can expand the footprint. Like how did that come about? >> Totally organic. I had like fear that, you know, one day maybe we would we'd work with colleges, but working with schools like high school was not something that I thought about. But what happened was it started last year. We literally got an email from from a high school in Los Angeles, Harvard-Westlake that essentially what happened is they they had asked their students, you know, basically the state is telling us we can ban phones. What should we do? And students got back to them and said, well, you

know, we all or many of us are using this app called Opal. We're using it on our own, you know, no one's telling us to do that, but maybe you should reach out to them. So they had reached out to us to see if we could do something together and and we found that, you know, it was interesting actually to do that. And so the way what we did is we built Opal for schools. What it is is it's a phone policy that schools can use to help their students focus and thrive. And the way it works is the students download the Opal app. And then when they walk into campus, when they walk into school, the banned apps are blocked on their phone, but they can still access the apps that are authorized, which is often being able to text, you know, mom and dad, but also educational apps. And so, you know, for example, in some circumstances, some case school would say, you know, chat GPT is a is is it can be used or, you know, this specific

kind of physics apps or this calculator app. And the interesting part is that, you know, when they leave school, instead of, you know, just being handed back their phone and being able to go and and and just like binge uh all on the social media, they still have the app. And so, what we see is that a lot of students are actually still using the app after school to set up their sleep schedule, to be able to do focus timers, and study. And so, it's really kind of a not a bell-to-bell solution, but a bell-to-bed solution. It's kind of a a full cycle. And so, yeah, we've tried it with you know, one school and and now we're actually kind of scaling it up across uh the the states with many uh high schools uh around the US. And so, it's really become a very interesting new area for us. Not only because again, super aligned with our mission. We really really like that. I think it's a whole chapter we can open, but it's a

it's a much smarter way to actually do phone policy rather than taking the the the phones uh away. We're actually kind of teaching something to kids to get a tool that they can use after school. And from a business perspective, it makes sense because it really helps position Opal in in the family. Uh people talk about it on the local community level as well because every student uses it, so helps a lot as well. But yes, it's a new kind of uh distribution for us that is uh is super interesting and extremely mission-aligned because, you know, we need to make sure that uh education is is still uh and it continues to be uh an important, you know, effective for progress and and we can be a part of that.

>> Another aspect to it, too, is that the students will eventually graduate and become professionals and want the tools and no longer have it provided by the school. So, it's also kind of like growing up that next generation of pro users who who are professionals who can afford the the more expensive tier and stuff. >> I was very impressed. I remember my college days when our college library we there used to have PCs and then, you know, they kind of did a and all of a sudden they had 100% Mac everywhere. You know, this kind of newest kind of beautiful uh beautiful Mac that had been I guess that practically given away uh by Apple to kind of, you know, be be uh be present in college. And yeah, I think I think obviously, you know, from a business perspective it makes sense to make sure that the next generation knows about the products and can use them and can and and loves them. And I think that

in the case in our case, of course, that's part of the value and it I think it's also aligned with the fact that we do need the next generation to learn to build these skills, to build healthier habits in the previous generations. And so it works it works together. >> That's awesome. And and a great counter example here and something you said uh in passing is that the students need to love it cuz like my my kids all have now Chromebooks that they that the schools

hand out and they are terrible. My kids will never buy a Chromebook. They like beg to use my laptop. Yeah, we do have an iMac home iMac. And and so if you're going to go that route, it's like you still have to have an amazing product because that's what actually generates the word of mouth, that generates it. I mean, so much of what you've been talking about is like having that core product, the core brand, and that's how it actually pays off. So >> Yeah, I mean, it's been interesting you have a B2B business because we're really focused on people like B2C, you know, like making sure that we have the best possible app that's part of it. And it turns out a lot of students are using the app and actually love it on their own. And again, it's not something that people tell them to do or their parents or their school. They use it on their But we also happen to have this natural extension of working working with

schools. But for for me, you know, the compass is always how do we build the best possible experience for the user, make it fun, make it motivating, make it make it as easy to use as possible. And so as as long as we do that, you know, we'll still be able to make sure that Uh, the next generation wants to use the app as well. >> Are Are you able to share in in broad strokes like what the the financial arrangement looks like? Like Are you Are schools actually paying per student for this or are you just giving it away for that eventual benefit?

>> We do charge schools for deployments and using the service a per student fee that is very competitive compared to alternative solutions, but we do charge we do charge schools, but for sure the benefit of our business is expands way beyond way beyond that revenue and that's where we're able to kind of charge cheaper prices to schools because of that kind of other value that it brings to the business. >> Yeah, that makes it a whole new like world for a consumer app founder to be writing contracts with school districts and like are you ramping up a sales team or how are you handling that?

>> Yes, it's a new one that we have you know someone excellent that's in charge of the team Andy Bennett who is you know head of Opal for schools and he's we've been talking to and in partnering up with with so many different schools. He was at South by Southwest EDU a few weeks ago doing a presentation there with a lot of educational leaders talking to press and then we were recently like front page news on LA Times for actually the fact that we now have you know one of the important private schools in Los Angeles that's using the product and and many others.

So yeah, it's a whole new world. I think it kind of works though very very well together with the

consumer product. >> I I'd love to see it. It's It's so cool to see consumer apps kind of expand beyond that that the consumer base. You know, seeing yeah, apps like Calm Headspace years ago doing partnerships with insurance companies and you know, Calm I don't know if they're still doing it, but you know, they had like a section in CVS that was like the Calm Shop like a few shelves where they had like sleep gummies and like sleep masks and things like that. So, it's really cool when you think about these consumer apps as a brand, as something bigger than just the app.

There's just so many opportunities and I think it's cool to see all the different ways things that started as consumer apps actually end up monetizing in so many different ways and I I you know, wouldn't have guessed schools, but and it probably makes sense for for more apps out there to expand that way if they're really able to provide value to students and school districts. >> Yeah, I mean I think that when you have an app and and people love it, you're you're first of all, you're able to kind of touch so many people, right? Like millions of people literally, but more than 10 million people downloaded Opal.

It's a massive amount of reach and there's a lot of adjacents things that you can do in new segments like we talked about, but also new products that you can maybe maybe sell to them as well, right? But you know, for us really the journey's been the initial product market fit was on professionals that are increasingly a part of our still a big part of what's kind of our customer base and then we expanded to new segments with students as we opened up premium and then we have this kind of new segment as well going into the education world and I think that you know, when you look at screen time overall and that's why I'm super optimistic about you know, there's competition, but there's also so much space right with like 5 billion people with a smartphone and every single person needs a to help on managing their screen time and building healthy habits.

But you know, you also see other segments are possible that are you know,

more kind of health and lifestyle segments similar to what Oura and Whoop have done in the health metrics measurement, but you know, screen time is also big big part of people's health and so health and lifestyle. So, this also massive massive one and beyond that also think that you know, as more and more research is showing the impact of screen time on on health, and impact of screen time on productivity. You're also going to get insurers that are going to take a big part of this. You're also going to see employers that are going to want to build tools or or buy buy tools or license tools for their their team. And we believe that that's why it's so important to actually build the most the most loved and the most important brand in that category because a brand can travel. You know, when you have a great brand, you can go from one segment to another to another and build a billion user products and billion user category,

which is what we're working on. >> Yeah, you you've brought up brand a lot. I wanted to to dig a little deeper in that. What what are some of the key things that you think, you know, make the Opal brand the the touches in the app, the the name itself, the design, the the feel? Like, you know, how how how do you classify or quantify brand for Opal? >> Yeah, I mean, there's a lot of things. You know, we um the company started with with a manifesto, actually, that I wrote before like building a product. It was really more like thinking about, you know, what is um what is going on here?

You know, we've got uh trillion dollar companies and they're stealing people's attention, and they build this technology that everybody uses every single day. Technology is really good, but because of this business model and because of the companies that are building the technology used by by people, uh we have the outcomes that we know, which is, you know, overuse of screen time. So, you know, the manifesto is basically saying, you know, we can can change this, and we can actually design products differently uh to benefit of all the great stuff that technology brings to people, all the good stuff, but also like weed out the bad. And so, we kind of started with that. And then, you know, the product was kind of consequence of that. And uh yeah, the name, you know, is a is an important part of our of our story. Opal is a gemstone, and that's why you get all these gemstones inside the app uh in our

marketing as well. And um and Opal is actually also the the reason I chose this name is that you know, I it would it was striking to me that phones are basically something that you touch all day, every day, hundreds of times per day. And and so, you know, what are phones? Phones are made of basically glass, aluminum, all sorts of different kinds of components and they're electrically charged. They tend they tend to be warm because of what's going on. And as I was thinking about like what is the exact opposite, you know, from the tactile perspective to a

phone and and that that's where, you know, gemstone kind of came up. Um and Opal in particular, Opal is is is a gemstone that's said to calm the mind. In particular, blue Opal, it comes in different variations. So, and it's also very very precious gemstones. That's the reason why, you know, the name happened. So, it's not random. There's a real reason why why it's Opal. And then, you know, the the the whole product experience uh is centered around the fact that the more you focus, the more you can unlock these Opal gemstones with different colors and different shapes. And we put a lot of effort to kind of basically as constant debates in our team uh to basically make sure that that the entire experience revolves around uh around these gemstones. And so, that's that's actually like one of the things um the most loved interaction in the app, which sounds completely uh you know, stupid, but the most loved

interaction is that uh unlocking of that stone like when you get granted that's that that the new uh a new gemstone because you've you've uh you've you've passed the a new milestone you use the app for a certain amount of days, for example. Uh you get to kind of tap to crack the the gemstone. And uh and that's the most loved interaction. And uh people really remember this, talk about it, and really helps build the brand because this is what the kind of things that people remember. Um you know, another example is we try to do more things that are kind of unusual or or companies might not uh do normally.

We have these stickers uh I want on my phone here that says scrolling kills. It's kind of like a PSA, you know, public service now actually does not mention Opal, which is also controversial take, but we've distributed thousands of them to our customers, to users. We even bought a this massive billboard in New York last year with the message scrolling kills because we want to be we basically we want this message we want this conversation to happen and we want to be we want to be the company that helps uh that helps make the these changes. And so, that's another example.

And you know, there's many many small smaller details inside the app and how we do marketing, partner with creators, partner with different artists that helped I think kind of build that brand and make it strong. >> I I love that gemstone interaction and and I I was able to watch that video of that interaction uh in in researching all this. And I I imagine that was very costly to make. Like a lot of effort went into it from artists and from programmers to like get that interaction dialed in. But I think more apps should find ways to have those little magical moments, those little touch points that like make it feel special that like And I And And this is maybe an example of kind of what you're saying about, you know, using technology for good. You know, here you're you're almost dopamine hacking in a way. It's like it's special. You know, it's it's in a it's encased in a rock.

You don't know what it's going to look like. You tap and then it breaks open and it's like this reveal moment. I'd imagine there's haptics and audio and other things going on. And so, it is kind of a dopamine moment, but it's like you're you're using that as a reward for them actually like being more present

and not using their screens as much. And so, yeah, I think I think folks listening to this should should think about ways in their product to create those kind of magical moments cuz it really is so magical inside Opal. >> Yeah, thank you. I appreciate it. I mean, it's tough to decide to invest in that kind of thing because it's not really measurable and it's not It is always like 50 other things that you need to do that seem more urgent, bigger features, or bug fixes. And so, it's kind of difficult to make the decision to say, "Wait, I'm actually going to invest like whatever, you know, a few weeks building this thing and doing it right." But in the end, that's what people remember and that's what the brand really is built on, those kind of smaller details that feel unreasonably sophisticated.

And uh but actually they they um they really Yeah, it they bring magic to the experience. >> A few minutes ago you mentioned that Opal had had over 10 million downloads. You didn't say over 20, so I imagine it's somewhere in the in the low, you know, above 10 million. Uh but then as we talked about it earlier, you have over a million daily active users, which kind of clued me in that you got some like pretty awesome retention. How How do you think about retention and and how's that gone for Opal?

>> We do have great retention. First, the way the way we look at it is we need to make sure that we can that that you can do It's easy enough to kind of go on a detox for 3 days and change your, you know, kind of say, "Okay, I'm going to put my phone away for 3 days." Which by the way is a start. But it's really difficult to do it on the on the long run. And so, that's what That's why retention is so important to us is actually like to be able to change habits in the long run. You really need people to be able to stick around. The way we think about it is it's definitely like become the core. The only way you can really grow your users and we we saw how how important that is to to to have organic growth. The only way you can grow your daily users is basically having great retention, obviously.

And so, it's really something that that has been super important for us to to to to crack. And so, you know, experimented a lot, lots of tests to be able to figure out what drives retention. It starts from your know, the initial onboarding. What do you actually onboard people to? Yes, retention is a is super important. Um we're definitely today in the top rank, I would say in in terms of early retention. Yeah, they want to they seven on par with or better than you know, companies like apps like Duolingo or Spotify or or Strava. And I think the challenge for us is today is really how do actually we've got this I would say niche of people that are motivated enough to build healthier habits with digital technology. There's a few millions we talked about a few millions, but really what I'm focused on today is I'm thinking about, you know, how do we actually get the next 100 millions and get this kind of billion user product.

And um and that really to me is about making it way easier to take the first step, making it way easier um to get the benefits without having to have so much commitment. And so that's really, you know, I I know in this podcast talk a lot about what we've done the last year, but I I'm spending a lot of time today thinking about like what we're building, you know, in the next in the next year. And um and that's really what's what we're thinking about today.

>> I'm going to quote you back to yourself again cuz this is just so good. Retention is the ultimate proof of value. If a user comes back, you're creating something real. If they don't, nothing else matters. >> Yeah, that's true. You know, it's uh you and again, I think the reason I was saying that is because if you look at X today or Twitter, you know, you're you're kind of like always you you're talking about revenue, revenue, revenue and and and people kind of quickly, you know, growing their MRR which which is great. I love revenue cats. I love revenue too.

But, you know, I think like retention really really is is the only way to have like lasting value. It's the only kind

of real moat. And it's two different things. It's it's one thing to be able to convince someone to try out a product and to pay for it at the beginning Uh but it's another thing to to be able to get people to actually stay for a long run and and and create lasting value and I think that you know, by the way, I started you know, the Opal journey started with just this first part really like clearly at the beginning that's what you should be doing but very quickly it's also about how do you actually build like lasting value and the only way to to see that is retention and and that's how you measure it. Yeah.

>> One of my colleagues was saying that you know, there there are just too many apps launching right now where kind of onboarding is the product where there isn't like a real product like it doesn't actually even do the things it says in onboarding and it's just all about getting people to a hard paywall taking their money but that's not I mean that's just a short-term arbitrage. That's not building a real business because you know, they're not renewing over time. The magic of subscriptions and the magic of this business model is that those cohorts stack over time is that and I I imagine with the Opal it's like you can look at those early cohorts from you know, six years ago who are still paying you money and have paid it every month or every year and when you start stacking those cohorts and as you get to year six seven eight it's just incredible how that works if if you have that retentive product and it really is just

that's how you build a real business versus just like a short-term arbitrage make some cash and then you know, watch it all unwind. >> And I think it's probably unpopular to say because of of what's what's going on right now with you know, that the loudest voices are more about like you know, cash grab business but I I agree with you here. Yeah, I think that's why you know, by the way, I think AI is truly incredible and again, you can build amazing products that we haven't seen yet and I I I test so many but you can you can build incredible products that really serve your users in amazing ways but I think that today a lot of hyper growth in are in the other category, which is yeah, basically being able to quickly create products that unfortunately have no retention, you know, don't have a brand, and are not really delivering value to users. And that's not very sustainable.

You need to make sure you you know, you have a brand. You need to make sure you have retention. You need to make sure you are delivering value to users. >> Yeah, such a great point. We we talked about how you shifted a lot of user acquisition to organic and are getting so much more organic traffic. But I imagine you still do a ton of paid ads. And And actually, I know that for sure because I do still get the the one Opal ad that just crushes. It seems like your phone is a nuclear-grade weapon aimed against you.

Uh it's really kind of uh you know, a a shocking and rightfully so. And it And it's true. But any any tips for one, finding those kind of creatives that you can run for I mean, I saw the I first saw it maybe a year or two ago. Like it's still running. So, finding those creatives that just crush and can continue to to go. Uh and any other kind of lessons and top learnings around paid ads recently. >> Yeah, I think you know, by the way, I I hate to kind of always bring it back to this, but I think it really comes back to uh the brand. Like because we put so much effort into building that brand and building a product that is that brand, we were able to get this particular video I want to kind of tell you the story. I don't think I've told it before, but it's kind of kind of interesting. So, um we uh we saw this video actually that I think a friend of mine sent a friend of mine sent me this video. It was posted organically by

someone, and it got a little bit, you know, a little bit of virality organically. It was and and I saw the video, and I was like, this this is incredible because it looks like it's an Opal ad. But it's not. And so, you know, I I DM'd the the person. Um actually, it was someone on my team, Maureen, who DM'd this person and said, "I mean, we'd love to maybe license this video." And and the guy wrote back and said, "Actually, like I use Opal and it was an inspiration for right for making this video." Um so it was kind of like back full circle. Um he didn't do it as an as a as an ad, but he said, "You know, we kind of have to get people to change and so we kind of need to uh and he's a great filmmaker.

So, obviously, the video is amazing. And you had no idea what how it performed, so but we we did like ask him to if we could use the video and he said, "Yes, of course, as an ad." And so, basically, there it already it is the organic video with the Opal logo attached. That's it. >> Wow. >> And uh and it turned out to be pretty pretty successful because I think it's seen today like by dozens of millions of people. And interestingly enough, it's also not just an ad, it's a big part of our brand. And also, it has value outside of getting people to download the app. So, we've heard a lot of people that seen the ad and it said they completely changed their habits without even downloading the app.

So, it kind of also has its a life of its own. But, um you know, since that we've we've we've also partnered a lot with various creators that have made videos that are like just organic videos we've either repurposed or, you know, we commission new um creative videos. But, I guess we have kind of unique unfair advantage here, which is that a lot of creatives, like actual people who are filmmakers or, you know, designers, actually are users of Opal because it's a pretty popular amongst this group of people.

Um so, I think we we get um we get a bit of an unfair advantage here of tapping into this community because they they really care about this mission and they really care about our product. >> You you actually hired one of your users, right? And and she now does videos just for Opal? >> Yeah, yeah, um absolutely. We actually hired many of our users uh in our team, but this particular one we uh are accelerating our organic growth um in many different ways and one of the ways we do that is um we found this person who was mentioning Opal in a video on TikTok and and thought she was great.

And um and so basically we we hired her and she's part of the team and um and she's basically building a educational media for us. Uh her name is Olivia and so the channels are called Olivia Unplugged and um and basically she's you know educating people uh about topics around screen time and focus but it can go all the way from uh you know how to make friends because people don't know yet you know to how to make friends anymore uh offline to um you know how to how to build a bedtime routine um and all of these kind of different topics and she does this in such an amazing way and it's not you know an Opal brand account it's like creator accounts um but that that is powered by Opal and so Opal gets mentioned in the videos and there's a a link in bio but I think it works it works really well because we went from like zero to I think now 700,000 followers across different platforms and millions of views in like a few months

and um and it's not just like it's not just about the numbers because it's really relevant cuz the content is actually exactly like what the brand wants to say and so it's very very relevant. >> Yeah, that's so cool hiring hiring so many users and not hiring creators uh were users and organically posting content finding organic content repurposing it as an ad so many cool stories. We are we are coming up on time but there's uh three questions I've been asking every guest who come on so let's uh let's get to that. Um the first one is what's your biggest win of the last year the experiment that performed way better than expected um something you implemented what what's your biggest win?

>> Uh the biggest win is streaks. Uh but it or not, we have our own way of counting streaks. But essentially, the more you focus with Opal, the more you get a a streak. We've also put a lot of effort, speaking of brand, and like making making this beautiful. Um so, the streak is represented by this um this this small frame, uh which is, you know, not not like a kind of emoji flame, but actually kind of animated flame. And uh yeah, and you can get, you know, beautiful Opal gems towards what you reach kind of uh different streak milestones. So, that's that's the I would say the biggest win in the last year to improve retention and and growth.

>> Yeah, that's so cool. Streaks don't work for a lot of apps. So many apps try streaks. Uh but it's great to hear, and it makes sense that it's landing for Opal. I What What was your biggest fail of the past year? >> Yeah, I mean, what I would say is um it's probably like So, we bought this billboard uh with that said, "Scrolling Kills" in New York. And okay, I would say it's a fail in the sense that we we intentionally like didn't make attribution really obvious. So, it it didn't say clearly opal.app.com or getting Opal. So, it's a fail in the sense that no impact on downloads, no impact on revenue. But that wasn't the the point. Uh the point was really kind of a brand statement. And so, actually, it And just I think to finish on that, we we signed a school uh in New York.

And And the moment that we signed the the the deal in the uh the head of the school actually didn't tell us that he saw the billboard, and because he saw the billboard, he actually was more comfortable signing. And so, you know, it's kind of those things that are not really directly measurable, but that do make an impact. So, it's I would say like a half a half failure here. >> I I just Googled that while you were talking, and when you Google "scrolling kills," at least for me, um pretty much everything that shows up is uh Opal related. And you have uh scrolling kills.us, scrolling kills Opal saves. It's kind of cool to have this um this kind of secondary tagline that you can kind of like own almost like a almost a trademark of like you you created this phrase that you can just put on a billboard and that even though you probably like you said you didn't it didn't impact downloads, but it created

an impression and then that impression is tied to the Opal brand online, which is so cool. >> Yeah, I know. Thank you. I appreciate it. It's It's definitely why we did this and um we want to carry a message, right? That's like already uh that's important beyond just like downloading the app, right? It's actually just like something that uh is important for society at large and we kind of want to uh be be a part of that.

>> Yeah, that's so cool. All right, last question is fill in the blank. Growth would be easier if >> families got involved. >> Nice. >> So, you know, I think that every single parent probably in the world today is worried or concerned uh about their children's screen time. The problem today is that it's such a conflict within the family. It's the number one conflict source of conflict uh between, you know, teenagers, kids and and their parents. What we want to do is we want to change that. And instead of conflict like make this something that people can do together, make that a collaboration. And so, you know, growth would be a lot easier if families got involved because we would be able to make sure that, you know, we get one person in the family and then everyone else in the family uh follow suit. And so, and that's something that we're working on.

>> Yeah, you're you're actually Did you already launch or you're soon to launch a family feature? Cuz you told me about this last fall and I'm actually pretty excited about it. >> We're taking our time. We're taking our time, but uh but it's it's coming. It's coming uh very very soon. >> Cool. All right, well, as we wrap up, anything else you wanted to share? You hiring? Looking for more creators? anything else uh our audience can do for you?

>> We're working on something really really I say like a a big step change in the whole product experience this spring actually. Um and so yeah, the what the audience can do is to watch out for the next big update. It's going to be pretty incredible. I'm really excited about it and share any feedback that they have, you know, to us uh directly on the app. That's always super helpful. Things that work, things that don't work. Um this is uh this is how we learn. This is how we grow. So we appreciate that. And uh I really got to got to talk David today. This has been amazing. Thank you for the conference also last week. Uh this has been this has been a great conversation. Thank you very much.

>> Yeah, thanks for thanks for joining me. It's it's uh it's so fun chatting through all this stuff and you have a very different perspective, like you said, than a lot of people in the industry right now and I think it's uh it'll be great for people to hear. So thank you. >> [music] >> Thanks so much for listening. If you have a minute, please leave a review in your favorite podcast player. You can also stop by chat.subclub.com to join our private community.

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