Recurring revenue is essential for any business, as demonstrated by Apple’s shift towards services like Apple TV+, Apple Music, and iCloud, which now generate 20% of its revenue.
The cost of acquiring new customers has surged by over 200% in the past decade, underlining the importance of predictable revenue streams. However, subscription-based business models come with unique challenges, including the need to acquire and retain customers. Addressing churn is crucial.
Danish startup Subsets aims to help companies tackle these challenges through an AI-enabled platform designed to improve customer retention in the subscription industry.
Introducing Subsets
Founded in Copenhagen in 2022, Subsets leverages “explainable AI” to identify subscribers at risk of leaving and suggests experiments to encourage them to stay.
Explainable AI enhances transparency by providing human-understandable justifications for its decisions, making AI more trustworthy. Subsets has already attracted clients like The Athletic and Danish newspaper Børsen.
Focus on Media
While Subsets caters to various subscription businesses, its current focus is on digital media. The platform allows businesses to analyze subscriber data and run retention experiments.
Subsets’ web app enables commercial teams to explore churn audiences visually and in plain language, helping them identify subscribers showing disengagement signals.
The platform allows non-technical teams to conduct retention experiments on subscriber subsets, offering insights into effective retention strategies.
Advanced Technology
Subsets uses advanced AI algorithms, including gradient-boosting models and temporal sequencing methods, to predict subscriber behavior. The platform aims to use frameworks from Elon Musk’s xAI for enhanced understanding of churn-driving metrics.
Although Subsets is not currently using OpenAI’s GPT.x models, they are working on integrating additional functionality inspired by ChatGPT into their product.
With a strong network of investors and connections, including Y Combinator, Subsets is well-positioned for future growth in the subscription industry.
