Outdoor Subscription Software | Connecting with Nature

The Rise of Mobile-First Businesses in the Outdoor Recreation Sector

The recent pandemic presented significant challenges for many. However, with the easing of restrictions and a renewed focus on outdoor pursuits, businesses prioritizing mobile accessibility have experienced accelerated expansion.

Consumers increasingly adopted digital solutions to enhance their experiences in nature, driving this growth.

The Dyrt: A Case Study in Success

The Dyrt currently ranks as the leading camping application available on both the Apple App Store and Google Play Store. Its success is rooted in the convergence of two key trends: a growing national interest in outdoor recreation and travel, and the widespread adoption of consumer subscription software (CSS).

Introduced in 2019, The Dyrt PRO, the platform’s premium subscription service, was strategically launched to capitalize on the increasing number of individuals embracing outdoor lifestyles.

Within a year, the app was acquiring a new subscriber every two minutes, attracted by features such as offline maps and comprehensive camping details.

Investment and Growth in the Outdoor CSS Market

Several CSS businesses focused on outdoor activities have secured substantial investments through major deals in recent years. These include OnX, a hunting application (backed by Summit Partners), AllTrails, a popular hiking app (Spectrum Equity), Surfline (The Chernin Group), and Pinkbike, a leading resource for mountain biking enthusiasts (Outside Media).

The prevalence of services like Netflix and Spotify has accustomed consumers to recurring payments for software that enriches their daily lives.

This established payment model is perceived by investors as dependable and indicative of future growth potential.

The Broader Landscape of Consumer Subscription Software

The intersection of fitness and outdoor passions represents a particularly dynamic segment within the expanding CSS market.

This broader landscape encompasses a diverse range of services, including family planning tools, entertainment platforms, and educational resources.

It is believed that CSS remains in its nascent stages of development, mirroring the position of B2B SaaS approximately ten years ago.

Key Differentiators for Successful CSS Businesses

What fundamentally distinguishes exceptional CSS businesses from merely adequate ones?

• Value Proposition: Offering genuinely useful and engaging features.
• User Experience: Providing a seamless and intuitive interface.
• Community Building: Fostering a sense of belonging among users.

These elements are crucial for sustained success in the competitive CSS market.

The Virtuous Cycle: How Passion Drives Revenue in the CSS Model

A key strength of the Consumer Subscription Software (CSS) model lies in its direct alignment with customer needs. Unlike businesses reliant on advertising revenue, CSS companies can focus exclusively on delivering value to their user base.

This alignment proves especially potent for CSS businesses operating within the outdoor recreation sector. These companies enhance beloved outdoor pursuits by providing valuable tools like performance tracking, detailed maps, user reviews, air quality data, and critical fire alerts.

Consumers willingly invest in the activities and hobbies they cherish, and CSS companies are uniquely positioned to prioritize customer satisfaction. This creates a positive feedback loop.

This dynamic results in what can be termed the CSS flywheel. A high-quality CSS product consistently attracts and retains a dedicated user base.

These users, in turn, contribute valuable data through their posts, photographs, and reviews. This collective input refines the product, attracting even more users and perpetuating the cycle.

Successfully implemented, this flywheel effect is highly attractive to investors. The inherent scalability of CSS offers significant advantages.

Each specialized niche is likely to be led by one or two dominant companies, with the potential to reach tens of millions of consumers within a single niche.

While a fitness application for cyclists or runners may not achieve the same level of ubiquity as a service like Netflix, outdoor CSS companies, such as Strava, have already attained valuations exceeding one billion dollars.

Consider distinct outdoor activities as analogous to individual genres on a streaming platform. Achieving dominance in areas like camping or surfing could be likened to capturing a significant share of the comedy or horror streaming markets.

Currently, we are observing a trend of consolidation within the outdoor CSS landscape. Companies are also actively seeking to expand their service offerings to enhance the overall value of their subscriptions.

The Rise of Back-end Solutions for CSS Businesses

Modern CSS (Consumer Subscription Software) companies are now benefiting from a growing ecosystem of tools designed to accelerate back-end development. These solutions streamline essential functions like payment processing, subscription management, user analytics, and marketing automation.

Dedicated B2B providers, such as RevenueCat, specialize in supporting CSS businesses. They simplify the process of launching and scaling subscription-based offerings.

A More Equitable Landscape

The increasing availability of these back-end tools is creating a more competitive environment. By automating fundamental operations, entrepreneurs can dedicate more resources to product development and key performance indicators.

Investors are particularly interested in observing the following metrics:

• Year-over-year user growth.
• Levels of user-created content.
• The relationship between customer lifetime value (LTV) and customer acquisition cost (CAC).
• Subscription renewal rates.
• The percentage of free users converting to paid subscriptions.
• The balance between organic and paid customer acquisition channels.

Focusing on core product value is now easier than ever.

Beyond operational tools, advancements in mobile technology are also playing a crucial role. Smartphones and wearable devices provide readily accessible sensors.

These sensors can automatically feed data into CSS applications, enhancing their functionality. For example, The Dyrt leverages crowdsourced data to provide a more accurate map of cell service coverage at campgrounds than traditional wireless carriers.

Prioritizing Long-Term Customer Retention Over Rapid Expansion

Many Customer Subscription Software (CSS) businesses frequently highlight substantial gains in paid subscriptions, alongside the resulting financial benefits, as primary indicators of strength. However, this growth proves fleeting if accompanied by significant customer churn.

Investors place a higher value on retention, seeking subscribers with a demonstrated likelihood of continued service for an extended duration – a strategy focused on cultivating a loyal customer base, rather than attracting transient users.

The Cheetah vs. The Thoroughbred Analogy

A useful distinction can be made between a cheetah and a thoroughbred racehorse to illustrate this point. Consider a cheetah, known for its speed but limited stamina, acquiring 30,000 new users monthly through substantial marketing expenditure.

However, if this acquisition is offset by high churn, with the majority of users discontinuing service within a year, a critical issue arises.

Conversely, envision a thoroughbred, capable of sustained performance over long distances, experiencing minimal customer attrition annually and retaining a significant portion of its subscriber base for multiple years.

After a three-year period, the impact of growth marketing will diminish for both entities. Marketing budgets are not designed for perpetual escalation, and will inevitably be reduced.

Consequently, revenue will plummet for the cheetah-like company, while the thoroughbred will remain largely unaffected.

Although the thoroughbred may not achieve the same peak figures as the cheetah, it represents a more robust and sustainable business model.

The Current Investment Landscape

With a solid business model, robust technological infrastructure, and a validated market opportunity already established, the final element for success within the CSS ecosystem is generating enthusiasm among both public and private investors.

Notable deals, such as the Zwift/KKR funding and the recent IPOs of Duolingo and Bumble, demonstrate the considerable potential within this sector.

When identifying the next generation of CSS companies poised for significant recognition, focus on those exhibiting the characteristics of the thoroughbred – those built for endurance and sustained growth.