The origins of RevenueCat

by Greg Kumparak5/30/2024

A photo of Jacob Eiting, CEO and co-founder of RevenueCat

If you build something because you need it, chances are good others need it too.

RevenueCat (YC S18) is an excellent example of this. While adding in-app subscriptions to an iOS application, RevenueCat’s co-founders realized they were spending a ton of time building out the behind-the-scenes plumbing. It was necessary work, but it meant way less time for the features they actually wanted to create.

So they built a better solution — one that handled the un-fun bits of managing in-app subscriptions, helped with data analytics, and let app developers focus more time and energy on the stuff they wanted to make. Seven years later, RevenueCat’s tools are helping to power over 30,000 apps.

I recently sat down with RevenueCat co-founder and CEO Jacob Eiting to learn more about company's origin story. He shares the almost-accidental way he got into programming, why he doesn’t let himself spend much too time thinking about RevenueCat’s successes, and some of what he’s learned along the way.

Check out our conversation below, edited for clarity and length

7 years into building RevenueCat, how do you explain it to people?

I try not to be too meta, but it’s almost harder now to do a one liner explanation than it was during YC. [We’ve grown], but we’re still the same!

RevenueCat is an SDK and an API that helps developers add in-app subscriptions to their apps and run their businesses. I might pitch it differently today depending on who I’m talking to — we do a lot more than that now — but that’s still the simplest distillation.

What inspired you to build this in the first place?

My co-founder and I worked at a company called Elevate, which is a brain training app. This was right at the beginning of Apple opening up recurring subscriptions on mobile.

We launched subscriptions [for Elevate]. I’ve always been a data/analytics person, and as soon as we launched that app I realized all of the data given out by Apple was really bad. Even basic stuff like number of subscribers, how much they were paying, all of this stuff was really difficult to pull out or do anything with.

We had to build a ton of crazy infrastructure to extract and enrich that data so we could do analysis. We spent a year building the app itself and then three years just building the infrastructure for subscription management, and I thought: there’s something wrong here. [As app developers we] shouldn’t have had to focus on this, so the idea became to build it as a service.

Do you ever see Apple/Google getting it together and catching up on this?

They’ve gotten better; they’ve fixed some things.

But there’s some fundamental complexities. Apple is, almost to a fault, very privacy-centric. They really restrict what developers can see. On every other platform, you get much more access to things like: who are your customers? How much did they pay? Where did they pay from? All of these things that should be table stakes for a payment processor, Apple withholds.

Then Google has a similar but different set of things that they show and don’t show. If you’re a cross platform app, it’s a nightmare.

I can see the excitement fading from your face as I further explain the intricacies of in-app purchases [laugh]. It’s a very boring problem, but that’s why we have a business! Everybody under invests in this stuff because it’s a pain, and it’s confusing, and there’s lots of arcane knowledge.

[Apple and Google] will never have an incentive to play nice with each other — and that’s where we sit. Our biggest apps are almost all cross platform in some way. My strategy is to go faster than Apple and Google and keep moving up the stack. In the last five years we’ve added a ton of functionality; we take care of your paywall, and a/b testing and experimentation, and all of this stuff that Apple and Google will never do.

What’s your personal origin story here? What got you into building?

I actually went to college to be a physicist. I was always into computers, but I mostly saw them as kind of a fun hobby.

I knew that if I wanted to maximize my physics undergrad, I needed to do research with a professor. So, I guess it was growth hacking even then, but I downloaded the email list of the entire physics department — every professor. I emailed the third of them that seemed like they were doing something interesting and asked: will you give me a job?

Of thirty, two responded. One gave me a job, and that job ended up being programming. That was the first thing that knocked me off the path of pure science; I started writing computer programs in the lab, then went on to write control software for telescopes, and got really good at programming almost by accident and realized I actually love it.

"When the iPhone came out in 2008, that was the true end of my physics career."

When the iPhone came out in 2008, that was the true end of my physics career. I started building apps. I launched one of the first 200 apps on the App Store and even started an SDK company back then, and I fell down this App Store rabbit hole.

What was the programming you were doing in your physics work?

I was doing Python. We were building a camera that actually deployed not that long ago; it’s crazy, I was like ten years out of academia when it finally went live. That tells you about the pace of academia.

We were building this thing called a dark energy camera — or DECam. It takes lots and lots of pictures of lots and lots of targets in a procedural way to do some really cool cosmology. I was writing the control code… it was probably the most complicated project I’ve ever worked on, really. One university wrote the shutter control, one university wrote the camera readout, and this, and that — they all have to work together. It was a nightmare.

There were definitely things in there where I look back and go: I was made for [running a company]. There was a lot of sheepherding, but I just did not have the academia vibe. I was always so much more aggressive, and I want to move fast.

It’s funny; I haven’t talked about this in a long time, but there was a lot of very formative stuff there. Getting projects done with people like that, I think, fed my career later on.

Are there any other side-quest projects that led you where you are?

I mean, apps were a side project, right? They were a thing I was playing with that eventually became a career.

I think this is something that is undervalued: computers have to be your play thing. If technology is not your plaything, it makes it hard to compete. I think it’s why my co-founder and I work well together; not only were we engineers, but we were passionate about computers. They were fun for us. They were toys.

I think about all these stupid little things I did as a kid, like hacking up my Dreamcast so I could get it on broadband when I didn’t have dial-up anymore. I had to learn how modems work, so I was going on forums and figuring this stuff out — but I wasn’t thinking: “oh, these are useful skills for me to have a successful career in technology!”

I was having fun, and playing around, and I think that’s something founders need to do. It’s something we even try to design into our company culture, too — like… remember, this is kind of fun, right? We’re getting paid to play with computers. We have a commercial mission and all that, but… ultimately we should be doing cool computer stuff, you know?

It’s something I think about as I raise my kids, honestly. The devices they’re playing with — they’re playing with apps, sure, but the devices themselves are so locked down. You can’t really break it and fix it and play with the system itself.

I worry about it too.

There’s things that make learning computers easier, now, even if it’s more abstracted. Like, I never really knew how electronics worked, and that was fine.

But when I was a kid, every computer I had I could take apart. And that’s how I got started! My dad worked at a company that would sell their old IBMs every few years for like 50 bucks. He’d bring them home; they never worked, so I’d fix them. I was six or seven; people would be like, “how the hell did this kid figure this stuff out?”

But I didn’t really figure it out; I just plugged the plugs. I saw two plugs that went together, I plugged them together, and they’d turn on. You do that enough times and suddenly you know computers, right?

"If I didn’t have computers that I was allowed to ruin… there’s no way I’d be on the path I’m on."

But it’s an interesting observation you had; if I didn’t have that exposure, if I didn’t have computers that I was allowed to ruin… there’s no way I’d be on the path I’m on.

My co-founder Miguel is the same way; in some ways, we’ve been cosmically linked. He was born in Spain, I was born in the US, but we were born right around the same time and experienced the same technological revolutions and were doing a lot of these same things on opposite sides of the ocean. I think that’s an important element of why I’m here today.

Tell me about your co-founder. You met when you both worked at a previous company; how did you know that you’d fit well together as co-founders?

We were super privileged to have three or four years of practice working together. But I always had this chip on my shoulder to start a company; I’m in Silicon Valley, that’s what you do, right?

So I left our previous employer and played around with stuff for half a year; I had a bunch of other ideas [outside of RevenueCat] that.. honestly, I was more excited about. I’m mad because I was really into AI that year. The paths you don’t take, right?

But ultimately, I knew I was uniquely suited to build this idea. There were other smarter people who know AI better than me — but I don’t think there was anyone who knew in-app purchases better than me. So I thought: who’s the next best person that has seen this same problem?  Well, there’s this one guy I worked with…

We have a lot of mutual respect, but we’re very different; he’s organized, and I’m chaotic. He’s very methodical; I… very much get one thing in my head and sprint to the end. We had built stuff together, but we’re also friends! It’s a rare combination — to find somebody that you’re productive with, and that takes life and work as seriously as you do, but that you can get along with from a social perspective. That made it real easy.

Did you have to convince him to join you?

I don’t know if he likes the way I characterize it, but… I do feel like I nerd-sniped him a little bit. I didn’t necessarily ask him to be a co-founder, I just came over to his house and was like “Hey, I was thinking about working on this idea… can we whiteboard it a little bit?”

And it was all over, because he loves white boarding. I don’t know if I would’ve gotten a co-founder if that didn’t work out. Maybe I would’ve found somebody, but that was my one real shot.

What’s been your proudest moment as a founder?

There’s moments where you get to “cash in” pride-wise on a lot of work.  Like fundraising rounds are weird, right? Because you’ve been busting your ass for years and then you sell some equity for cash, and somebody takes a bet on you, and then it’s in the press or whatever. And then that’s the moment where everyone is saying “congratulations!” for raising that round. But that [round] wasn’t the work! That was just a checkpoint.

I’m proud of — well, this is not a single acute moment, but… any time we can still be alive. I don’t know if that’s a great answer. But sometimes you’re in the crap all day long, and it’s a bad day... and the next day Miguel and I will be like: we’re still here. The fact that we’re here? And we’re alive, and still compounding, and still growing? That’s insane.

"As soon as I’m like 'ooh, I’m a fancy founder that they’re interviewing for Y Combinator’s website'… that’s when I start to lose, right? "

That does make me proud, sometimes, but I think that’s dangerous. As soon as I’m like "ooh, I’m a fancy founder that they’re interviewing for Y Combinator’s website”… that’s when I start to lose, right? As soon as you go “Oh, I got this,” with too much cockiness, you’re done.

I’ve had to teach myself to avoid referring to any company as successful when talking to its founders. They look at me like I’ve uttered a cursed word.

It’s dangerous, right?! It’s a psychological game. I’m sure there will be a day in my life, and in my co-founders life, where we’re like: okay, we’re successful… but I think that’s the day I quit working? I’m 36. I’ve got a while.

What are some other things you’d share with founders that follow after you?

If you don’t have some sort of non-money-motivated internal fire for the problem, or the customer, or the work, or ideally some combination of the three… Yeah, think long and hard about doing this [laugh].

When you don’t have product market fit, all you want is product market fit. After you have product market fit, you’re like: oh my god, I’ve ruined my life, because now I have this crazy thing I have to carry all the way up the hill.

Some things you don’t like will go away; some things you do like will go away. You’ll have bad quarters, and good quarters. But like.. any excess space you have for relaxation? You’re quickly like, “oh, I could use that to go faster!” So you gotta love it for the love of the game.

What’s that thing for you at RevenueCat? What’s that internal fire for you?

I have a lot of passion for the problem because… it’s kind of where I grew up.

There’s not a lot of technical people in Ohio. When I went to Apple’s developer conference in 2008, it was the first time I was like: wait, there’s other people like me? People that make apps and can teach me stuff?!

It became kind of a found family for me; this whole community of people who are in the mobile industry has become my home. So that drives me.

I mentioned the chip on my shoulder, and I think [as a founder] you’ve got to have that unfixable chip on your shoulder to draw energy from. You need to have a healthy relationship with that chip, and don’t let it consume you… but you need to have something kind of irrational driving you.

You probably know more about building subscription businesses than most people on the planet. To wrap this up, any tips on what makes in-app purchases or subscriptions work? Any surprise learnings?

Honestly, it’s that there’s very little [universally] applicable advice. We should be wary of saying this or that thing is [always] better, because I’ve seen the variance and outcomes on different apps and the spread can be very wide

Based on what you’re building, or who your user is, or what they’re using your app for, there’s a lot of irrational decision-making on the consumer side, and so it’s really, really difficult to predict what’s going to work better than something else.

You have to apply [your own] data to it. That’s the benefit of being in the consumer world; you can run tests for pricing, and packaging, and where you put your paywalls. You can pretend to know, and you can have informed ideas, but you gotta let the customers tell you how they’re thinking about it. The only real data you’re going to get is from the person you’re trying to sell to.


  • Greg Kumparak

    Greg oversees editorial content at Y Combinator. He was previously an editor at TechCrunch for nearly 15 years.