PhotoRoom - How to grow a subscription app business and its user base globally by Olivier Lemarié

[00:00:01.450] - Speaker 1
Welcome to the Subscription League, a podcast by Purchasely, listen to what's working in subscription apps. In each episode, we invite leaders of the app industry who are mastering the subscription model for mobile apps. To learn more about subscriptions, head to subscriptionleague.com. Let's get started.

[00:00:20.850] - Olivier Destrebecq
Welcome to the show, everybody. Today I have the pleasure to have Oliivier Lemarie, who's VP of Growth at PhotoRoom with us. Welcome to the show, Olivier.

[00:00:29.440] - Olivier Lemarie
Hi, Olivier. Hi, Jeff. Nice to meet you. Thanks for the invitation.

[00:00:32.290] - Olivier Destrebecq
Yeah, you're welcome. Thanks for introducing my co-host, Jeff, co-founder at Purchasely today. How are you, Jeff?

[00:00:38.470] - Jeff Grang
I'm great and happy to be with you both Oliviers, and especially with Lemarie who I had the chance to be working a little bit at Molotov. I'm very pleased to have you on this side of the mic today.

[00:00:51.100] - Olivier Destrebecq
We'll talk a bit more about Molotov down in the podcast. But first I wanted to talk a bit about PhotoRoom, where you're working today, because I saw a demo online on LinkedIn the other day and it was the one where the bike is erased from the foreground, the bike is on the wall, and then it just magically disappears. I was super impressed. I wanted to know, can you tell us a bit more about what PhotoRoom actually does?

[00:01:12.330] - Olivier Lemarie
Yeah, sure. PhotoRoom is an AI mobile app, photo editing mobile app. We focus mostly on commerce photography, meaning that people use PhotoRoom to first and foremost remove background first. We have the best tech to remove the background as we believe that this is the first part of your journey as you want to edit a photo for your business.

[00:01:33.620] - Olivier Lemarie
The more you saw about removing something on the picture which is quite amazing, because when you take a picture, when you are, I don't know, like holiday picture and you have a garbage bin or you want to take a picture of your clothes and you see your two on the picture, it doesn't look very professional to sell something. So it's quite convenient to just remove it.

[00:01:53.860] - Olivier Lemarie
That's why people are turning and using Photograph first for their business or just for casual and fun and as many premium apps and we'll cover that a bit later. We also have a Pro plan, a subscription Pro plan, user take it mostly to increase our sales. So we have features like removing all this background by batch, removing PhotoRoom logo, better quality of feature, more professional, I would say features.

[00:02:18.930] - Olivier Destrebecq
Awesome. You guys are actually pretty successful. You have 50 million installs and you're probably in a million of active users. Do you know how many paying subscribers do you get out of all those millions of installs?

[00:02:30.020] - Olivier Lemarie
Yeah, PhotoRoom is three years old now and as mentioned, we have grown quite fast. That's the beauty of mobile subscription. We are live everywhere in the world. And we can grab opportunities a bit everywhere and we have a few hundred thousands of paying subscriber on monthly or yearly plan and something I think which is also one of the beauty of mobile subscription is PhotoRoom is profitable in mostly in the beginning so that also nurture our growth.

[00:02:57.790] - Olivier Destrebecq
That's always nice for a startup. Personally, you started in the gross industry at Wooga which is a gaming studio and I can't remember exactly when you started but if I remember correctly it is at least a few years back. What was it like back then?

[00:03:10.500] - Olivier Lemarie
Yeah, I started in mobile app 10 years ago now, as you mentioned, at Wooga gaming studio in Berlin. At that time, acquisition was about e-mails and phone calls to buy install. This world has changed quite a bit since then and at that time most of the app developers were gaming developer first and most of them were using in-app purchase only while today you have multiple monetisation like even in-app purchase with ads or ads and subscription or even now offline and online, so the landscape has evolved quite a lot.

[00:03:44.520] - Olivier Destrebecq
Yeah. Now with PhotoRoom, I guess it's more of a utility app in a way, what difference do you see between the gaming industry and the utility app when it comes to growth?

[00:03:54.900] - Olivier Lemarie
Gaming app, as they rely a lot on in-app purchase, are much more advanced than utility app in terms of license value prediction and user acquisition and all things related to trend prediction as well because they don't have the choice.

[00:04:08.760] - Olivier Lemarie
By a sense business is not profitable while for subscription apps business is profitable so you have to improve, of course, your monetisation funnel and making people understand the value of your subscription and then engage with your profit shares as the business modelling of the subscription is much, much more easier than for mobile games. I think that's one of the main difference between the two businesses.

[00:04:34.560] - Olivier Lemarie
Another common point, maybe one common point is the global footprint compared to Volter for example, most of the gaming apps and most of the utility apps are live worldwide and that help also to think grow differently and find other growth [inaudible 00:04:49].

[00:04:49.850] - Jeff Grang
You were speaking about Molotov and so before being at PhotoRoom you were also at Molotov. For those who don't know what Molotov is, it's the French streaming TV app which focuses on the French market and was recently acquired by Fubo. How would you contrast this to your experience at PhotoRoom?

[00:05:07.270] - Jeff Grang
You spoke a little bit about the worldwide footprint, of course, and the different markets that you are targeting but is there any other differences or would you like to deep dive a little bit on this?

[00:05:16.840] - Olivier Lemarie
Yes, I won't go to potential technical differences but on two aspects I think that I was mentioning, the first one is, the people in the company and the organization you are building... We believe at PhotoRooms that if we want to successfully serve entrepreneurs all over the world, we need to build an international team out of Europe. English is by default the language and this is kind of what we believe in, but also we think it's successful in our mission.

[00:05:44.610] - Olivier Lemarie
Why? When you are focusing on a single market, the French one or whatever the national market is, this is something which is less strategic, I would say so this is one thing. The second aspect, which is of course more business-wise is your ability to test and fail. When you have a global footprint, you can test in non-strategic market and a small proportion of user to iterate on your market fit, for example.

[00:06:09.160] - Olivier Lemarie
If you don't find your market fit in a specific market, you can focus on another one. When for multi again any national-centric, country-centric business, you need to find your market fit in your own market and everything you are testing may impact your brand as well in this specific market?

[00:06:24.300] - Jeff Grang
Yeah, there's no playground and even for having a relevant test it must be a nightmare, right?

[00:06:31.120] - Olivier Lemarie
Exactly. That's one chance of Molotov in this area because TV is a mass market, so you can have huge volume. And that was what we were getting at that time, huge volume of install. But that's definitely true. You can't say, okay, I want to launch a test in all South American markets altogether. Of course, this is not the same audience.

[00:06:55.890] - Jeff Grang
Would you say that the position of not being a leader in a specific country is also making a difference? PhotoRoom is a leader in some countries, a challenger in some others. So you might want to be more willing to test stuff in other areas.

[00:07:10.070] - Olivier Lemarie
I don't know if that plays that much. I think it's related to the industry. On the photo editing, people, our competitor used to be live everywhere and people see ourselves more as today as another photo editing app even if we position ourselves on the commerce and selling, while the TV industry in each market has only a couple of very well-known brand. If you take France people knows Tefal, M6, [foreign language 00:07:36] et cetera.

[00:07:39.000] - Olivier Lemarie
It's very much more concentrated and the competition is looking much more at you on even daily basis. Why? In the photo editing or in the utility app space, I think people are more doing their growth strategy of course, looking at the competition but the pressure from competition eyes is not as strong as in the TV industry.

[00:07:59.650] - Olivier Destrebecq
Interesting. It's like there's a lot more utilities and a lot more niche markets that you can address. Today you're at PhotoRoom obviously, what are the big challenges that are out of you?

[00:08:08.490] - Olivier Lemarie
Yeah, we mentioned it briefly but PhotoRoom has grown very fast. I joined two years ago, as a second employee and now we have more than 40 people working at PhotoRoom. One of our core challenges and business photo as well and one of our core challenge is how we continue to grow while keeping what makes us, PhotoRoom, successful which is speed of iteration, speaking every day to users, and experimenting.

[00:08:34.600] - Olivier Lemarie
That's one of our current challenge. How we make sure that with a growing team everyone continue to move fast, experiment, learn, fail, continue to learn, and succeed. That's one challenge at the company level more at a growth level we are looking for new way of growing and we notice as many other utility apps that retention is a key metric for PhotoRoom and especially the retention during the first week because this is where people understand the value of your product.

[00:09:04.320] - Olivier Lemarie
Either the free product or the pro product. But at least you just have a few days, even usually one day to make sure that they understand the value and that if people could find value into PhotoRoom, they stay. Of course with dozens of thousands of install every day, that's also a great sandbox to experiment. Every day we have this pool of new user coming in so we learn and we apply recipe for success to make sure people understand the value.

[00:09:30.460] - Jeff Grang
You were speaking about the test culture, can you tell us a little more about this?

[00:09:34.420] - Olivier Lemarie
Yeah, sure. At PhotoRoom, we try to make experiment as easy as possible for everyone in the company. Taking an example from a very powerful tool like Amplitude, very useful for product analytics, code analysis, lifetime value, understanding behaviour into the app, usually this tool is initially used by product people, some tech people, gross people.

[00:09:59.650] - Olivier Lemarie
But when the team grow, as I mentioned, we are now 40. We have a strong machine-learning team. We have multiple iOS, Android, web developer. We are also building a brand team. All these people should be able to use the tool, understand how to use it and set up their own test. The ultimate goal for PhotoRoom is to make sure that everyone can set up a test and that it's even easier to set it up than not set it up.

[00:10:23.450] - Jeff Grang
How do you make sure that these tests don't cannibalise each other's?

[00:10:27.650] - Olivier Lemarie
That's a good question. Yeah, I mean we are still in iteration mode on that but at all stage we think by having... The team is growing but the team is still rather small. We're only 40. The product growth team is a team of less than five people so each product growth member, for example, has his own lifecycle area. One people is focusing on tab, another one is focusing on the onboarding and the third one is focusing on the monetisation.

[00:10:57.580] - Olivier Lemarie
So the payroll potentially upsell and we also have splitted the US or main market as for many utility apps and other markets that we call strategic. That's another way of splitting the test and trying to apply the learning from one test to other markets and see if that works.

[00:11:17.310] - Jeff Grang
Yeah, very interesting. It really sounds like the same approach than Vahe was talking about in the previous issue of this podcast about how to organise tests and doing price testing in different territories. Yeah, great. Very interesting.

[00:11:33.040] - Olivier Destrebecq
You were talking earlier about one of your challenges being retention at the first week and having to do a lot of user education, to make sure the user understand the value of the app. I'm curious, what have you found that has worked really well for you guys to make that value shine to the user?

[00:11:50.530] - Olivier Lemarie
This is probably not unique to PhotoRoom but what we understood is people using more advanced features like the Magic retouch, the one you mentioned at the beginning to remove one piece of the picture is driving higher retention or going through specific content is driving higher retention.

[00:12:07.210] - Olivier Lemarie
For Pro user and Pro-education, definitely people using the batch mode which is removing all the background, like hundreds of photos at once, is a core driver for retention which is quite, I would say probably common to many utility apps.

[00:12:24.550] - Jeff Grang
How do you balance these features that drive retention? Because there is always a balance to find between what you offer for free so that user will stick to your app and what you will make people pay for. How do you make that balance? Experimenting, I guess. Once again. But can you tell us more about that?

[00:12:42.400] - Olivier Lemarie
Experimenting for sure. Something we believe in strongly is remove background and the free tier is our first acquisition channel. By having generous free tier because PhotoRoom with PhotoRoom you can remove as many background as you want for free. We are the only one offering that in the App Store. We believe this is a strong incentive to stay and come back for a casual use case.

[00:13:04.430] - Olivier Lemarie
If you find more value because you have an e-commerce Shopify business you are selling on Vintage or Poshmark, then you will find that there is value taking Photo Pro and you will subscribe.

[00:13:15.820] - Olivier Destrebecq
One of the things you've done at PhotoRoom is you've leveraged TikTok content for user acquisition. I'm curious how you went about it because I'm not familiar with how to do that.

[00:13:24.920] - Olivier Lemarie
Yes indeed. First, TikTok is a natural social media for PhotoRoom. It's very visual. PhotoRoom is a very visual product. It's easy to showcase the magic around removing perfectly the background in two seconds. That was natural for us to start using TikTok to just outline and showcase what PhotoRoom is doing.

[00:13:45.110] - Olivier Lemarie
By doing that, some other people started using PhotoRoom and showcasing PhotoRoom on TikTok and we ended up discussing with some of them promoting their content. We built a network of, I would say today, more than 100 content creators who produce content all over the world. We have created of course in the US but also in Peru, Mexico, Thailand, Philippines so they produce content and we use that content to feed our user acquisition creative strategy.

[00:14:15.590] - Olivier Destrebecq
So how did you go about finding the creators that you partner with today?

[00:14:21.110] - Olivier Lemarie
It's a mix. Initially, it was people who find PhotoRoom by themselves and just put #PhotoRoom and reach out to them and try and set up a partnership. So we have that. That's one area, people doing them by themselves that we flag.

[00:14:35.170] - Olivier Lemarie
Another channel is reaching out to people that we think are on brand or are working in a specific niche. Like, for example, tattoo seller. Tattoo seller are using PhotoRoom in the US to showcase tattoo or remove extra or Shopify, specific Shopify sellers. We reach out to them, we don't know if they will answer, kind of cold e-mailing approach.

[00:14:57.300] - Olivier Lemarie
The last one is more working with agency who source for us so we don't go too much into the traditional influencer. We are more looking to micro-influencer people who have a very small audience on TikTok but are doing great content and content that we think are appealing for PhotoRoom audience.

[00:15:19.230] - Olivier Destrebecq
Okay, I'm curious, companies usually try to be, when they communicate with their users, try to be on brand and all that kind of stuff, I'm curious on TikTok like how much can you control or don't control that branding of the content that is created by the influencers?

[00:15:33.680] - Olivier Lemarie
You're right, it's a balance between you want them to be on brand but you also, if you work with them is because you trust the way they speak to their audience. What we usually do is for every big moment of the year we send, usually, it's every month or every two months we send a brief to them about okay, we want to speak about this new feature.

[00:15:55.240] - Olivier Lemarie
So they have a brief of what we want them to speak about. Showcasing also some examples that we do by ourselves so they can see what we expect from a content perspective, I would say. But we let them the creative aspect and how do we make sure that they do something on brand is mostly on the sourcing part as we are sourcing only people that we believe that anyway what they will do won't damage the brand.

[00:16:21.220] - Olivier Lemarie
And if something happen, okay, we can't totally control it, but if we select content creator we strongly believe will be on brand and we give them a script about the content, we control much of it. Also, we don't use this TikTok content creator for the audience but more for the content they produce.

[00:16:41.130] - Olivier Lemarie
So if they produce a content which is absolutely not on brand as they have a very limited audience, usually the impact will be very limited and we will just not use it for as proposed.

[00:16:52.670] - Olivier Destrebecq
I figured that part of using influencers was to communicate with the audience. But it sounds like you just said it's not so much for the audience, but for the content they create. Can you tell us more why you're more focused on the content they create than their actual audience?

[00:17:06.890] - Olivier Lemarie
Yes. Paid-unpaid acquisition. The most critical part today is the creative for any utility apps. Especially the case, of course, of PhotoRoom. What's great with the photo editing app, PhotoRoom is you can become very creative and there are multiple ways to showcase and make PhotoRoom shine. We can have ideas internally. We are doing also our own creative, the youth team is doing their creative. We have a video. We're seeing amazing ads for PhotoRoom.

[00:17:36.980] - Olivier Lemarie
But being able to have around 200-300 new piece of content, new piece of ideas about how to promote PhotoRoom every month is huge. Of course they promote to their own audience. This give us some reach. But compared to having successful and winning creatives that we can run to and promote to millions of users through paid advertising on Facebook, Instagram, YouTube and TikTok, yeah, the balance is more into the creative flow.

[00:18:06.770] - Olivier Destrebecq
Interesting.

[00:18:07.770] - Jeff Grang
Is there any advice that you'd like to give to other people in growth given your different experiences?

[00:18:14.020] - Olivier Lemarie
Something I learned at PhotoRoom that was the same at Wooga is think international. As a utility app, it's pretty easy to be available everywhere in the world. Many utility app focus a lot on the US. Which makes sense because it's the most mature market on the US. For the subscription business with a lot of ability to pay, which is much higher than many other markets. That makes sense to focus in the US.

[00:18:40.040] - Olivier Lemarie
But there is a tons of big markets elsewhere that are worth digging into. If you look at Japan, Taiwan, in the top five markets for the App Store, and most of western app developers don't think about them because the cultural barrier may be too high. But having one people or a small team focusing on those markets, understanding the culture, adapting the payroll, adapting the onboarding the App Store, it's an effort, of course, but it's not a huge effort to bring significant growth.

[00:19:09.850] - Jeff Grang
Great. Is it something that you do once and then it's okay? Or is it something that you regularly update your product, your product pages, et cetera?

[00:19:19.400] - Olivier Lemarie
I will say this is... I can share my perspective on that. If you have a global footprint and you are starting or your brand is not that big, you should do a long [inaudible 00:19:30] strategy. So you should look at your data, look where there is potential, and update what I just mentioned. You update the App Store, you update the payroll, you update the onboarding, you update the content with a local agency or local designer. You do it once in every major market. Maybe you can look at it again six months later or a year later. It really depends on your strategy.

[00:19:54.870] - Olivier Lemarie
If you are building a brand, a long-term brand, maybe you want to, in a strategic market, you want to build a global presence. Maybe you want to have after a while, after this long infrastructure strategy, maybe you will look for people dedicated to that market, implementing CRM, brand awareness, being present in media events, maybe that's another strategy. But I will say any app developer starting and having a first attraction and first number should look at where you can have a longing for strategy.

[00:20:24.390] - Olivier Destrebecq
It's a great advice on the international aspect and selecting your market because as you said, being on all those markets through the App store is very easy. It's just like a checkbox in a way. And there you go, your app is available everywhere, but you clearly articulated here that yes, that checkbox is easy to check, but there's some more work behind to make sure that your app is localised, just not translated, but localised for each market that you want to go after. Any other advice that you want to share?

[00:20:51.600] - Olivier Lemarie
Maybe on this international aspect, something I want to align even more is look at your own data. If you look at, we can take Molotov for example, but also if you look at Spotify, which has today a global footprint, to launch a new market, they had to have their contract with music owners, et cetera.

[00:21:12.970] - Olivier Lemarie
They didn't have Spotify data to decide on which markets they will have the most traction before deciding to go into a market. They probably look at a lot of external data and competition, et cetera, et cetera, but they don't have their own internal data. When you are a utility app available everywhere, even if your app is not very well optimised for it, you still know.

[00:21:34.670] - Olivier Lemarie
There is, of course, markets where your market fit is naturally better than in other markets. You should start with your own data and less feedback. Maybe for Growth Team is give ownership to your team member.That goes with the experimentation that we briefly discussed.

[00:21:51.910] - Olivier Lemarie
I'm a strong believer that one of PhotoRoom's success and one of success received for Growth Team is to give clear ownership to your team member and make them act as fast as possible and learning and iterating is what will compound over time and make your app successful.

[00:22:09.640] - Olivier Lemarie
So of course you have a global strategy and your global objectives shared by the founders and with an overall roadmap. But within this roadmap, give ownership, give them the tool to iterate fast and directly. Everything will follow.

[00:22:23.870] - Olivier Destrebecq
I'm curious, actually, practically what does that mean to give ownership to your team of the tests that they have to do? Can you tell us a bit more of how on a day-to-day that actually works at PhotoRoom?

[00:22:33.700] - Olivier Lemarie
Yeah, on the day-to-day, if we decide to work on the onboarding, we have one person from Project Growth and working directly with iOS and Android developer and they can do whatever they want, basically. If they decide to go with no onboarding, it's fine. If they think if we do improve, I don't know, activation, or if they decide to go with a very long onboarding, which is not what used to make PhotoRoom successful, that's also fine.

[00:23:00.960] - Olivier Lemarie
What we want them to have in mind is first, what's the goal of this test and what are the impact of this test? Because of course, if in the experiment, if it's successful, you want to implement it for every user so it will have a cost somewhere else in the final. But we trust people judgment and I think that another piece of giving ownership is trusting everyone's judgment.

[00:23:20.630] - Olivier Destrebecq
It's a great answer and you started by telling they can do whatever they want and then you qualify. There's some metrics behind and that brought a question in my head, which was what is your guys kind of a North Star metric? What are the things that people can't tank? Like. You did do a test and this tank, then that's it, no more testing or more testing, but not that feature at least.

[00:23:42.650] - Olivier Lemarie
In the growth team, what we are looking at is around retention and we also want some revenue metrics. We are looking at people using the app and staying in the app after more than a week. That's all metrics. The full growth team is working on different aspects of this metric. I mentioned the onboarding and I briefly mentioned the home tab because this is where most of the content is displayed and monetisation because as any apps, a big chunk of trials happened during the first day. Even during the onboarding, most of the growth team is focusing on this first day.

[00:24:19.880] - Olivier Destrebecq
Nice, thanks. You brought a lot of value, a lot of answers to our questions. I'm curious, if people want to learn more about you and potentially for the room, where can they go?

[00:24:29.350] - Olivier Lemarie
To learn a bit more about me, they can find me on LinkedIn, Twitter as well, even if I'm not that active at the moment. For PhotoRoom, you should go download the app or visit the website. We just released a crazy feature that everyone should try, which once you have removed the background, we generate automatically thousands of new scenes.

[00:24:48.320] - Olivier Lemarie
You can take a picture of you too and you can go on holidays, download the apps, or find you in the Desert of Patagonia in just a matter of seconds. That's crazy features. We noticed that... We found out that some Etsy sellers are doing 100% fake listings thanks to this feature. So this is generative AI applied to product photography and yeah, that's awesome. You should try it.

[00:25:14.810] - Olivier Destrebecq
Nice. Awesome. Well, thanks again. Thanks to both of you. It was great. To have you, all of you, today on the show and give us so many insights into what you've been learning over the last few years.

[00:25:23.820] - Olivier Lemarie
Thank you.

[00:25:24.550] - Jeff Grang
Thank you, Olive.

[00:25:25.730] - Speaker 1
On behalf of the Purchasely team, thank you for listening to the Subscription League podcast. If you've enjoyed what you heard, leave us a five-star review on iTunes or other audio platform. To find out more about Purchasely and how we can improve your subscription business, visit purchasely.com. Please hit subscribe in your podcast player and don't miss any future episodes. You can also listen to previous episodes at subscriptionleague.com. See you soon.