Who is GP Bullhound

GP Bullhound is a leading global investment firm and technology advisory, providing advice and financial capital to some of the most exciting entrepreneurs and founders in the world today, with a goal to build more billion-dollar companies.

Main attributes of a successful Consumer Subscription Software: the CSS Flywheel

In GP Bullhound's terms, recurring revenue is the most all-encompassing and monetizable marker of how much customers love a company's product. The firm proposes six components of recurring revenue: premium content, proprietary data, user acquisition, monetization and pricing strategy, niche user base vs. large TAM, and churn/retention.

Build your moat

GP Bullhound isn't looking to invest in a company growing 5-10% cash flow a year; it hopes to achieve home runs driven by paradigm-shifting Consumer Subscription Businesses that create a moat that's difficult to copy. Moats can include premium content (unique shows or routes that keep people coming back), proprietary data (user data that reinforces content and is hard to replicate elsewhere), and UI/UX ingrained in all parts of the app (intuitive, convincing, and worth paying for).

Think as a third-party

Founders need to understand that customers and investors don't share the same emotional attachment to the business. To attract investment, a business has to be scalable, have processes and procedures, organized data, and be transparent and able to justify its value easily.

Be the king of a smaller niche

Many subscription app providers struggle with a winner-take-all dynamic where a few big players get most of the value. But the size of the global consumer base is astronomical: a single niche can account for 10 million users, and if each subscribes to a $30 plan, that's a phenomenal growth opportunity. Finding a unique niche and value proposition puts an app on track to becoming the king of its niche.

Episode 9 sneak peek

• On recurring revenue: "We decided that recurring revenue was the easiest thing to measure. It's monetizable. It's very different from a user base or engagement. It's truly a measure of how much people love your product because they continue to pay for it."
• On GP Bullhound's investment target: "We are not investing in lifestyle businesses that can grow and produce 5-10% cash flow a year. We're looking for home runs. That is what we hope for."
• On UI and UX: "People have plenty of choices, but they only review the ones they truly love. So you have to make a product that is easy to understand, intuitive, and feels like a premium experience to justify a subscription."
• On creating a moat: "All businesses need a moat. In CSS, because you're delivering a product effectively, a piece of data or a service, it's software, it's effectively infinitely scalable. You have to have something that's unique to you to justify someone paying for it."

More about Eric Crowley

Eric Crowley is a Partner at GP Bullhound, focusing primarily on M&A, capital raises, and advisory transactions, with expertise in consumer subscription software, tech-enabled agencies, and ad-tech. Over his career, he has completed transactions totaling over $3 billion in enterprise value. Prior to GP Bullhound, Eric served as an executive at a software start-up and worked at Lazard and Antares Capital. He holds a CPA, an MBA from the University of Chicago, and a B.S. from Xavier University.