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we’ve mentioned that your inbound plane is the number one cause of your delay. The second cause is…
Crew?
RJ: That’s actually not, it’s third or fourth.
Oh, interesting.
RJ: It’s airspace mandates, which is a nerdy way of the FAA saying you have a ground stop, which people always conflate with weather, which it’s very hand-in-hand, but it technically gets marked down as that’s an airspace mandate. Basically
we’ve mentioned that your inbound plane is the number one cause of your delay. The second cause is…
Crew?
RJ: That’s actually not, it’s third or fourth.
Oh, interesting.
RJ: It’s airspace mandates, which is a nerdy way of the FAA saying you have a ground stop, which people always conflate with weather, which it’s very hand-in-hand, but it technically gets marked down as that’s an airspace mandate.
It frustrates me to no end when people are saying it should be 0%, it’s just so absolutist and it has no recognition of the value that the App Store fee is bringing. I think the fair number is way higher than most other app developers, most other app developers will say 7%, 10%. I think the fair number is in the 15 to 20% range, they’re doing a crazy amount of stuff with refunds and fraud and making sure the credit cards are up-to-date. All of that stuff, people have no idea how difficult it is, so I would say I’m a little on both people’s side. I think 30% is pretty high in today’s day and age.
But it’s like 10% high. It’s not like 20% high.
And the second year of an individual user’s subscription, you pay a lower fee, you pay 15%. So everyone always gives those caveats when they talk about, “The App Store has a 30% fee, but it’s also like 15%”, and the perception that people get then is like, “Oh, okay, it’s probably in the 20, 21, 22-ish percent range”, actually, if you do the actual math and you math it out as they say, the only way to get 50% of your users on 15% and 50% of users on 30% is if you’re declining, you can’t be adding any new users, so any app who’s flat or has growth is 27, 28, 29%. There’s very, very few apps that pay in the teens, and it’s probably because they’re either A) tiny, or B) dying. And it drives me nuts that people give them the little bit of the benefit of the doubt of, “Oh, it’s either 15 or 30”, by and large, it’s like 28, 29.
I do wish that they would enable our external payments to be even easier and people like you and me know this, but not everyone may know that they’ve actually, in certain economy, in certain countries, in certain situations, you can do it a lot more now, but the numbers are turning out that it’s not that clear cut of a win. So it’s to their point that, “Hey, look, we’re providing almost 30% of value”, I think the numbers are a little lower than that where developers are able to basically do all the things that Apple provides and the funnel works out the way such that they’re getting, let’s say, whatever, 22, 25% is what they’re ending up paying. So Apple’s point is getting proven, they are providing that amount of value, but right now there’s no kind of outlet for people to find that out on their own, and so everyone’s just super aggravated.
I heard recently at a conference, people say numbers like 50% of their effort goes to Android and 20% of the revenue comes from Android, and 50% of the effort goes to Android and 70 to 80% of the problems come from Android. So I think people who aren’t in the weeds may not realize the extent to which those markets are very different.
Yeah. One of the things you always talk about is one of your biggest customer bases continues to be pilots and flight attendants and things like that. Is that still the case?
RJ: Yeah, it is. It’s probably 25 to 30% of our users. We don’t have an amazing read on it because we’re super high on privacy, but based on all the indicators we have, customer support and places where you can tell us what you do, I think it’s 25 to 30%
We have a lot of really cool stories too about someone sitting in 1B who mentions, “Oh shoot, we just got delayed”, and the crew and the pilot hear the comment and say, “No, we’re not”, and then five minutes later like, “How the heck did you know that?”. We’ve had a couple scenarios where a plane gets diverted and the person on the plane got the diverted alert and mentioned it in front of a crew member who had no idea yet, so there’s been some very cool things that come out of having the fastest thing.
Yeah. United’s is miles ahead of everyone. I made a claim a while ago that United is actually the best airline in the world—
RJ: That’s one of those things you’re not allowed to say out loud, you can’t say that out loud.
Because their tech stack is so much better than everybody else. Delta’s getting better but it’s still not even close, and the Asian airlines are a total disaster.
RJ: I agree with you 100%, but if you say it out loud, people go ballistic, as you know.
the AI stuff is a complete unlock. Just like what’s happening at Facebook and OpenAI and Perplexity and all these huge AI companies, how do we actually apply that thing? That 100% is happening at the app level. There’s just things you’ve never thought of and things we’re all thinking of as toys that can be whole products and verticalized and specialized, so I think someone could do it. I hate to say it like this, but 90% chance if it’s not an AI-native, AI-first thing, you’re in an uphill battle.