[0:00]Dillion bootstrapped his first ever consumer app to $300,000 MRR in 45 days. He had never built a consumer app before, and he had just spent 18 months launching failed products and had almost nothing in the bank. So he had one last shot at making something work. We had a bunch of failed products which didn't amount to anything, we had to make something work. Otherwise, like we're screwed. This is like the last Hail Mary. And we were locked in, like every single day, 14 hours a day for months straight. But then he found one data point. He got a creator to post one TikTok that paid him back 6X ROI. As soon as this one video proved to him he had a working model, he took out a $100,000 personal loan and went all in. I just saw 6 to 1. I was like, okay, just take out all of my money. I emptied my bank account, I took out a loan. Just put everything all in into this. That loan paid more creators. And what those creators built was a machine that hit 600 million views in 60 days. We went from 0 to 600 million views on social media in 60 days, and also 0 to 1.2 billion views in 120 days for this application. 600 million views, 85 creators, 300 posts a day. But wait, wait, hold on, you've heard this story before. They probably have this huge complicated UGC machine running 10 content angles at once, trying to figure out what works. Well, no, actually none of that. Dillion had one single TikTok format. We only have one format. One format, 1.2 billion views. There's no deviation of that. And how he kept 85 creators posting every day consistently, competitively without someone managing them, that came down to a deal structure experiment with a very unexpected result. Both of them were structured in a way where the pay was equivalent or like very close, but CPM was slightly more. And we gave this contract to 30 creators. And you wouldn't believe, but like 29 of them picked this one, and one person took CPM in the end. 29 out of 30 creators chose the option that actually paid them less. In this episode: Dillion breaks down the entire system, the one format, the math behind his content machine, and the creator pay structure that keeps all of it running. Let's get into it. This is the Superwall podcast, and I'm Joseph Choi, founder of Consumer Club. The members in the Consumer Club Discord and the founders I interview on the pod build apps at a median of 1 million AR. A lot of these apps that make the most money run AB tests on their paywalls to make more revenue with the same number of users. Superwall has a lot of data on the thousands of apps that use their paywalls, so recently they put together a free AI tool trained on 422 profitable paywall experiments. It lets you upload a screenshot of your own paywall and gives you an experiment idea to increase your revenue. You can use it for free at paywallexperiments.com. Also, if you're building a mobile app doing at least 100k a month in revenue, Superwall hosts dinners in San Francisco and New York. They keep each gathering small, thoughtful, genuinely useful for everyone. If you meet this criteria of 100k a month in revenue and want to invite, apply using the typeform in the description. Let's get into the pod. You've bootstrapped your first app to $300,000 MRR in 45 days. I think everyone wants to know what what's the app and how how in the world did you do this? The app is called Halo AI, and the way we did this was using UGC marketing. Okay, so this is the app Halo AI. So what does the app do? The app is an AI photo editor. So if you have any photos, you want to edit with AI, you can just upload them to the app, put in a prompt, and get an output. Like where did you get the idea for this? My partner Gurshan and I were working on a bunch of products and stuff throughout the past year and a half.
[3:37]And last July, I think, Gurshan brought up that the Gemini API came out recently, and there might be some potential opportunities to build an app around this. So we figured, yeah, why don't why don't just give it a shot. Later on, towards September, we spent two or three weeks building the app, and went live, I want to say, mid-October or end of October last year. And then did you, like the the growth chart was like seemed like slow growth at first, and then it kind of blew up in, you know, in the past 45 days. So were you doing distribution back then, too? Yeah, yeah, you can see, um, actually the first frame of this of this video, like October 20th, October 22nd or so, right there. Yeah, like that's when we first started, I think the $5 MRR was basically, I think myself, I just like testing the app and like seeing if it works. And then around then we also started doing UGC. So for me, uh, this is my first consumer app, haven't done UGC or any marketing or any sort of like app stuff before, but I had a general idea of like sort of what to do from what stories I've heard on on Twitter and on YouTube and other places.
[4:46]You basically just have to get a bunch of people together and post videos, and then you should you should grow MRR, or like grow your app. So that's what we tried to do in the beginning. Just got a bunch of people together, told them to post videos, and in the beginning, the growth was a bit slower. Uh, we got some I get a a feel for the how to how to go about it and and towards the middle, and then it took off from there. How many creators do you have posting now? At the current moment, there are 85, and for this video, you see, or the GIF, there was 25 within initial scale up. Oh, wow. Okay. So you had 25 creators posting from around this point, and then now at this point you have 85. It scaled throughout the throughout this period, too, but in the beginning, there was like 10 or so, and then 25 towards the end of the video. Like we we grew, uh, everything during this period. So more creators, more videos posted, more views essentially. So like essentially, what is the strategy? Why do you have so many creators and like what content are they making? So some of the context guiding this is we went from 0 to 600 million views on social media in 60 days, and also 0 to 1.2 billion views in 120 days for this application. But let me go deep into how we came across this wide working, and how we sort of boiled it down to a math and science, or you can say like a science and art, in in a way to make this work. So a couple of things in the beginning, which we realized, very early on, while trying UGC, is when we post a video in a specific format, we noticed that the conversion rate remained constant for that format. So if there's a video, the classic like hook and demo style format, and you post the same style of video, twice or three times, the rate is always going to be like 0.5% or 0.3% of people who would watch the video and go download the video. Second thing we also learned in the beginning was you don't need followers to get views or go viral. Anyone can make a brand new account on TikTok, Instagram, etc., and their first video can get 10 million views. Like it's there's no barrier to getting views on a brand new account. And looking more into this, I realized this this is like a change which occurred in 2022 across the platforms, where it enabled everyone to go viral. Last thing I realized was there are a lot of creators willing to make content for for brands and undersupply of brands having deals or opportunities for creators. So this is really interesting because essentially, there's more pricing power or or power for brands to be able to like work with creators at scale when doing UGC. This is different than influencer marketing, but for UGC in particular, this was the case. So yes, let's go into like the breakdown of of what we did, how it works, and like how it all came together. One equation I want to highlight in the beginning overall was we realized really early that for our app, our revenue is equivalent to the number of views we get times the conversion rate of those views. So if you get a million view video and maybe you get 500 downloads from that, and they're all paying $15 a month, you can sort of get an estimate for how much revenue your your app is making. What this equation showed me in the beginning was, hey, like if this is the case, all we need really need to do is just increase views and increase their conversion, and then we're sort of good. Like we just make more revenue, make a lot of money. And that was all we did. I I just like broke it down further and focused solely on increasing views and solely on increasing conversion, and it all came together very quickly. So I I made a little funnel here to describe how we view user acquisition, I want to call it, or how do we get users for the application. What we do is we post videos on all four platforms, Instagram, TikTok, Facebook, and YouTube. And if a user is going scrolling through social media, they see our post, they may be interested to go download a product or try a product, which is when they go further down the funnel. And what's really interesting about about this is there are a lot of people on these platforms, and it's it's like hard to conceptualize, but I actually pulled up a chart here to like dig into it. But there's 3 billion monthly active users on Facebook, also 3 billion on WhatsApp, 2.6 billion on YouTube, and 2 billion on TikTok. So there's a lot of people, like a lot of people are on these platforms daily, like watch videos and and and you can reach them through these platforms to take whatever action. In particular, I also looked into the US as well because most revenue for applications and for e-com or shopping in general comes from the US. The US is the biggest proponent, but there's approximately 100 million people in the US who have Instagram and an iPhone. So that's like basically your TAM, like the number of people you can you can target for your application. But yeah, after people view a video, which has something about your app, they might go download it. To download it, they'll go to different stores, like App Store, Play Store, web search to search up your app, and then eventually download. And later on, you can do a trial or go straight to hard paywall, whatever it is, but then eventually they become paying users. So this is an overview of the funnel. And for each of these steps, there was two different equations, you can call it, to you can you can work towards. So for the the first step of the funnel, which is views, you can model views as something like this. Your total views is the number of creators you're working with, the number of videos each creator makes, the number of posts per video, and the number of views per post. And if you multiply all four of these together, you get the number for total views. So to dig a bit deeper into this, our creators is pretty explanatory, just the number of people making videos. Videos as well. Posts per video essentially means like the number of platforms you post on. Suppose you post on TikTok and you get like a million views, you probably can also post that on Instagram, and maybe also get a million views, too. So if you can increase the number of platforms you're posting on, you'll just get more views in general. And yeah, last thing is views per post. Um, if you these are posts, you can modify by the way, like the format that you pick to give to creators to post. Some formats get more views or more virality and some formats get less. It's your job to like figure out which format will get the most views possible and also the highest highest conversion for you to drive up this equation. This is really cool visual to show here because this is essentially all you need to do UGC. Like this is like literally literally everything. Your goal as a UGC gross person should be to maximize views, and the way to do that is to increase all these variables. Increase creators, increase the views for creator, increase the post per video, or the platforms, and increase the views per post. And if you do this every day for weeks, like you you're going to get views and get revenue for your application. And that's essentially it. One question that I know a couple of people have asked me in the past is like where do you get creators from? Like how do you find creators or or creators who are good to make videos? And for that, we have a specific process we used to find creators. What we do is we actually go to a bunch of these platforms, like there are groups on Reddit called UGC Creators, UGC Brands, also there's actually like hundreds of Facebook groups, each with thousands of people, all dedicated to people doing UGC. And I just run all of them. Also, a bunch of other platforms that are paid to also find creators as well. But what I did was I posted a job posting on all these platforms and every single one of these groups for people willing to create videos for us. And from that, we got a lot of applicants. So we got like maybe 500, 600 plus applicants. From there, what I did was I don't know who was good or not, but but I essentially was looking for people who were familiar with UGC, who have done it in the past. I screen for that criteria amongst all the applicants, and lastly, you gave them all like a a paid trial to start. So they were creating for us for about five days in the beginning, and then we paid them for their work. And if it's a good fit from there, we continue forward with them, and if not, then we stop there. How much do you pay for those trials? For us, our base rate per video, which we set was $20 per video. So creators were paid for five videos during the trial. So the full trial amount was $100. You said you'd post on all these platforms every day. How many applicants would you get like in a day? Maybe 30 to 50 per day. And over a while it like very quickly snowballed. As a rough example, I think so far we had like 600 overall in the beginning, and we went through and screen for a bunch of them and then trial the bunch of them as well. But this was like a rough number in the beginning for how many creators we got and and how we got them. But in general, I would recommend the Facebook groups a lot. There was like a lot of people in all these groups that understand what UGC is and are willing to create content for you. I'm just curious, are are a lot of these creators experienced with apps specifically, or are they more kind of beauty, fashion, e-commerce type of creators? There were a lot of people who were interested in or have experience with e-com, but for me, I filtered for that as much as I could through our screening.
[13:43]So if people were, for example, not in the US or don't have a US VPN, and they've only done, maybe like e-commerce, uh, clothing UGC apps before, it probably wouldn't be a good fit for us. So we're looking for people who ideally have had past app or tech UGC experience, and also live in the US. And the criteria for living in the US was so that we could get them to make accounts to advertise to people in the US, too. It's pretty simple, though. It's like, um, some experience with apps or tech based in the US. It was kind of it. Like were there any other things you'd look for in the application, but then it looks like you have this whole funnel where it's like application and then you screen, and then you do the trial, so what are the things that you're screening for at at each stage? Yeah, for screening, the main thing was what you mentioned. So past UGC experience is a really, really important, and US living in US or using US VPN. Other than that, there's no hard requirements. Anyone can make the these formats. And for us in particular, we had a very strict guideline. So our formats were set in stone. This is like one way to make the videos, there was no deviating from that, or or like room for like experimentation in that in particular. So that made it very easy. Like anyone could make the make the formats as long as like the instructions were very clear for them. And for the trial pass rate and like people who were going from trial to full-time creator, we had three criteria we're looking for. The first criteria was consistency, do they post once a day or often? Do they have good communication, what it means is like were they actively talking to us proactively in the chat asking questions? And lastly, was do they have an understanding of like the viral algorithm, or like how to go viral? And the way we assess that, this is more of a qualitative or like a vibe based intuition, but if they can edit their videos with a strong emotional hook and then a buildup and a payoff, and the structure is very evident in their videos, they they pretty much understand like how to go viral or like how to make videos like that.
[15:36]But you would surprised, a lot of people don't understand that, or like what makes videos go viral. And and even if you put them through many, many videos to to recreate and like try again and again, like they won't learn anything. Um, so you want ideally not work with those people. Uh, best case scenario is they understand how to go viral from the start. How do you design the trial? That seems like the the key part of all of it. Yeah, uh, we just brought them into a Discord. Uh, we told them to set up the app and set up their accounts and post for five days. That was essentially it. And we have our Discord where all of our creators, each one has a private channel with us. We just talk to them daily if they have any questions or anything about that. And what what is the assignment? Are they just posting on TikTok like in the formats that you already know that work? Actually, yeah, one more detail I should mention is we only have one format. One format, 1.2 billion views. There's no deviation of that. So people in the trial also posts the same format. They just post the same same videos in the same format, and we assess them on that criteria. I see. So you're basically just assessing them on are the videos getting views? Like you don't really need like you're not really looking for anything about the video itself. Like as long as it gets views, it passes, right? Yeah, I've tried not to set a hard threshold on minimum views to pass trial because the algorithms are unbreakable. And they act in a power law, like 5% or 10% of videos get viral, but the rest don't. So on trial, they only have five videos to post, you can't really expect them to go viral in that, like there's there's no way to do that. But as long as again, they're consistent, they have good communication, and they have a sense or display of the viral editing or viral editing techniques, then we're willing to work with them. I see. So it isn't just results only like even though they're posting the videos, if they don't get a ton of views, you can just look at the video and see, you know, are they doing things like making a hook that seems like it could go viral in the future if they tried a few more times? And things like that. Yeah, correct. Yeah. And some other like heuristics, which helped is people who have English as the first language. Like they generally understand how to make a hook that that works really well. Also people who are Gen Z, if your app is targeting a Gen Z or a younger audience, or you're posting on Instagram, TikTok, which is a younger audience, ideally your creator is also of that audience and they understand the language. And are they posting on all platforms during the trial, too? Like you're getting four posts per day, really? Yeah, so it's five videos per creator and four posts per video. So 20 posts overall. Uh, during the trial across these four platforms. Do you see differences in the platforms?
[18:12]Yeah, yeah, that always happens. There is like noise between each platform in general, like some of them get more, like TikTok for example, uh, tends to get more views than other platforms. Uh, YouTube Shorts is also a proponent of getting a lot more views in general. But what we have noticed is that if a video inherently has like viral potential, it'll get views across all platforms. Cool. Was there anything else in this um, section? Yeah, I I guess I can quickly touch on this. We have uncap posting. So people once they are creator, there's no limits. There's no like one per day or two per day. You just post unlimited. Some of our creators are posting like 20 videos a day, or more. Wow, just on the same on their own accounts?
[19:00]Yes, so like 80 overall, or or more. Some of them are like very, very motivated to just like pump out a lot of volume because we have no posting cap. Do you run into shadow bands with that? Like or like do the platforms kind of look at these accounts that are posting so many I've heard from some people that the, you know, you get rate limited or or like things like that. Yeah, I remember in the beginning, we were suspicious or nervous about that, but what we realized was YouTube and Instagram in particular, like they don't care. You can just post unlimited videos, and you'll get you're going to get views on all of them. Uh, TikTok is a bit more, I think, from my understanding right now, you have to ramp up to it. So like post three a day, five a day, 10 a day, and you'll see like they're pushing your videos up further and further, and your accounts warmed up. But then at scale, like there's no limit. Like you can still post as many videos as you want from what I've seen. For Facebook, we're not sure yet. It's still very new for us. Okay. So YouTube and Instagram are both okay to post multiple, multiple, like, you know, 20 times a day. That I have heard that a couple of other people. Yeah, and then TikTok is a little bit stricter on how many times you can post. Yeah, keywords is smart. That's like a good idea. Like the big problem with a lot of these generative AI content startups are like, it it allows you to create tons of output and the output is high quality. But then it doesn't really tell you like what are you actually supposed to make because what went viral last month might not go viral this month. So like finding trending keywords to, you know, feed your agent or feed your creators, whatever it is, like what content they make based on keywords. This seems like a good idea. Do you find that turning keywords into video ideas is kind of an automatic thing, like the creators just do it themselves, or are you kind of in there, looking at the keyword insights and then translating that into, hey, you guys should make these types of videos? It's an automatic thing. Our creators just go in and do it themselves to figure out new trending topics or new scripts. One thing that's that's, I think, really important, which I haven't seen too much talk about, I guess, is, uh, the importance of community. And building a like valuable community for all your creators in one place. Like for us, all our creators are like friends with each other. They're always like late night in the Discord, voice chat, like talking about things, or like posting in different channels, like non-stop every day. And this is interesting because like like the camaraderie helps them like be motivated to like keep building things, learn new ideas, share share learns with each with each other as well. We have multiple channels, like once for wins, once for ideas, once for feedback. People are posting all of them. If they get a win, they post on the wins. If they want to improve their videos or get get input, they post on other channels. So, I've seen different UGC programs have none of this. It's just like post a video, get paid, and you don't get that those those like compounded learnings in one place if you don't have that community. Yeah, I feel like people so often forget that there's a human element to this whole thing. It's like no matter how much you pay a person, the human elements of work almost always will affect the quality and the consistent consistency of the output more than just like the pay. But speaking of pay, how do you pay your creators? Is it like per view, or do you give retainers or both? Our pay structure for creators is performance-based. So they get bonuses based off of few milestones they hit. And this is aligned with the main equation, which I told you earlier, which was like we want to maximize views. And the way to maximize views is to set incentives for creators to get more views, and to do that, you have to pay for performance. During our early testing, we noticed there was like four main payall structures, which you can work with for creators. So first one, obviously to eliminate is probably this one. Like if you have 500 a month, regardless of the work you do, you're not going to be motivated to get more views. Like you're just going to make video and get your pay, and that's basically it. So the only real options are like these three. And CPM and mix were both interesting to me. What I actually did was I set out in our contracts that you can pick in the very beginning. So our creators had the option. They could pick between option one, which is CPM, and option two, which is milestone. And both of them were structured in a way where the pay was equivalent or like very close, but CPM was slightly more. And we gave this contract to 30 creators, and you wouldn't believe, but like 29 of them picked this one, and one person took CPM in the end. And that was like talking to me, but essentially, what it showed me was people value the the base expectation of $20 base per video, whatever base per video, more so than the expected returns for for more views for CPM structure.
[24:33]Second thing was, while running the structures, the CPM for one creator and this for 29 creators, or so, like this one was actually more operationally complex. Like you have to basically go and get every person's exact view counts at a at a point in time and then pay them for that. But this was just like pretty straightforward. Like as as long as someone crossed a threshold, you pay them an X amount, and you're good to go. So as a business, managing the operations, this is also easier, too. So it was like a win-win. Like the creators prefer this, and it's operationally easier. In the end, we standardized this is the main format that we pay creators with.
[25:16]That's crazy, because as you were describing the four formats, I was looking at the fourth one and thinking this is probably the best from the business side, because it incentivizes creators to like hit big milestones. And then when they don't hit it, they're pay falls back to the one before it. But because you have this like big number at each milestone, it gets people excited to try to, you know, be ambitious and hit those and get the big payouts. But it's interesting that people just naturally gravitated towards that, probably because they feel that anticipation and the excitement around, you know, I want to hit those big numbers. It's very much gameafied. People are like in the Discord asking each other for like, repost my video, or like comment on my video, give me engagement, it's I want to hit the milestone. It aligns with the our overall goal of of getting the most views possible. What are the milestones that you like to set for the view counts? There's a lot of ways, but in the beginning, we did 20k, 100k, 500k, and 1 mil views. For each one, we had like a different payout for this. I think we did 60 additional and then we did 200, 500, and then 800. It's around like $1 per 1000 views, like on average. That is like the expected base off of this. It is cheaper than that, though, for various reasons. And it's cheaper than $1 CPM because for each milestone jump, like you're not paying for these views. So like this triangle, and like this triangle, and this triangle, for example, are essentially like free, you you can call them. Like unpaid for. And then also, if our your format has more virality, if you get like 5 million views, 10 million views very frequently, that drives down CPM. And the $20 base, is that like $20 per video? Yes, $20 base per video. One video has four posts. Does the posts itself, like on Instagram or TikTok have to hit the milestone, or do you add up all of the counts? We just let one hit. If one of them hits the bonuses, we pay out for that. Oh, okay. So if they hit like two, then they get like two bonuses? Oh no, it's not stacking. So just the one. Okay, yeah. So you just want to hit at least one of them hits a milestone, you get the payout. Very efficient. $20 base plus, you know, about a $1 CPM minus some because you have the stack, you have the, uh, the cliffs.
[27:42]Uh, cliffs, plus 1 mil cap. Usually, when I've seen like clipping campaigns, you set budgets for the campaign overall, and then people race to like maximize the budget. And then, um, once the budget is out, the videos that are already posted continue getting views, or I don't know, is there anything, is there like that? That is one case. And also, yeah, like we also had that too, like videos get original views over time. But that's sort of a I would I would count that under one mil cap, or or like a cap because they'll just keep getting views. There's one more thing, which is which is somewhere here. I can hit you, I'll give you the hint.
