Nico Wittenborn on Consumer Subscriptions and Solo Investing

Nico Wittenborn names his firm Adjacent after the “adjacent possible,” a concept he uses to think about how existing technologies and social changes combine to create new opportunities. In conversation with Harry Stebbings, he applies that lens to consumer subscriptions and early-stage investing.

As a student Wittenborn imported, unlocked and resold iPhones, and invested some proceeds in Apple shares. A cold email led to an internship with Team Europe’s seed fund and then a role at Point Nine. He credits its founders with introducing him to venture, giving him autonomy and later supporting his own fund.

He moved to Insight Partners in New York in 2016, investing mostly at Series A, before founding Adjacent in 2019. Point Nine taught him focused, geographically flexible early-stage software investing; at Insight he observed how a specialized thesis in enterprise software could mature over decades.

Stebbings questions whether consumer subscription apps are a good venture market when relatively few companies have reached multibillion-dollar scale. Wittenborn argues the model is young: app-store subscriptions began in 2011, and many early companies had only recently reached the age at which outcomes might mature. He says more comparable outcomes should emerge within five years if his thesis is right.

He sees parallels with SaaS in recurring revenue, software margins and global distribution, while acknowledging higher churn and other disadvantages. His confidence in several-billion-dollar outcomes is a forecast made by an investor specializing in the category, not proof that the category will deliver them.

On retention, Wittenborn says companies he works with generally retain at least 50% in the first year, with some rare cases at 80–90%, often involving hardware or particular services. He says churn tends to flatten after the first year as users form habits. These are selected portfolio experiences, not industry-wide benchmarks.

He says his portfolio companies generally aim to recover customer acquisition cost from the first annual subscription, then retain a portion of users for subsequent years. In his proposed economics, users who leave after paying back acquisition cost do not prevent remaining cohorts from accumulating, provided the addressable market is large enough.

Wittenborn offers 50% organic acquisition as a guideline, not a fixed requirement, and says paid spend can be higher when returns justify it. He looks for product features or experiences that also encourage sharing, so organic acquisition grows alongside paid acquisition. He acknowledges channel mixes and effectiveness change over time.

He says annual upfront subscriptions account for roughly 70–80% of conversions among founders he works with, often returning acquisition spend within days. Stebbings questions affordability for people who cannot easily pay a large amount upfront. Wittenborn notes annual discounts and differences by geography, while predicting willingness to pay for valuable products will rise.

Stebbings challenges hard paywalls in apps such as PhotoRoom. Wittenborn, who invests in both subscription companies and their infrastructure, says more frequent paywall exposure can increase conversion, but warns it can annoy users. Some products combine repeated prompts with a free trial or limited free use; he also observes that payment may increase engagement.

Platform and advertising changes can abruptly disrupt acquisition. Wittenborn calls dependence on one channel a major risk and advises exploiting a working channel while investing early in alternatives. He says diversification is difficult but possible based on companies he has seen.

A mobile subscription can be an entry point rather than the entire company. Wittenborn cites portfolio company PhotoRoom expanding from mobile into web, teams and an API. He argues early revenue can reduce dilution, though the business model has other risks and the example comes from his own investments.

He prefers seed for the balance of entry price, upside and future dilution, while also investing selectively at Series A. His model assumes multibillion-dollar outcomes rather than requiring $10 billion exits; a smaller fund can make a $2 billion exit meaningful depending on entry and ownership. Those are prospective fund calculations, not realized returns.

He prefers companies to raise follow-on capital when it enables a new stage of growth rather than pursue high valuations for their own sake. Stebbings notes founders may want the larger rounds available to other companies. Wittenborn acknowledges founders make the decision and says high early prices reduce flexibility.

Large multistage investors are less visible in his niche, he says, partly because consumer subscription businesses may not appear large enough to move a multibillion-dollar fund. He considers dependence on $10 billion outcomes risky: such exits are rare, and valuations previously marked at that level can fall.

Wittenborn does not disclose Adjacent’s fund size. He describes 20–25 companies per fund, mostly seed, with seed defined flexibly from prototype to later rounds. For the current fund he targets roughly 10% average ownership, and says recent investments averaged about 11%; it was too early to compare the second fund’s hit rate with the first.

Initial checks range from $1 million to $7 million, with the largest single check at the top of that range. His usual position is to lead at seed and co-lead at Series A. A smaller fund can sometimes share a round while allowing another investor to meet its own ownership target and providing the company with longer runway.

He generally plans for roughly three years of runway in that context. Wittenborn believes larger investors sometimes dismiss consumer subscriptions until revenue is substantial and then compete to invest. He says he tries to structure companies so they can reach cash-flow positivity or have enough time to prove the next stage without depending on a specific follow-on investor.

His involvement is greatest early, where he shares lessons and connects founders with relevant peers. He says he usually takes only two board seats per fund, may observe Series A boards, and is willing to let a better-suited investor take the seat as the company scales.

Stebbings asks whether co-leading will become harder if investors demand more ownership. Wittenborn says some firms will not collaborate and terms may change with the market, but he has deliberately sized his fund to make collaboration possible. That assessment reflects his circumstances at the time.

On price, Wittenborn recalls Insight founder Jeff Horing telling him not to be too cheap. He aims for terms fair to both sides. Stebbings raises a conflict: a small fund might prefer a smaller round than a founder wants. Wittenborn says investors should disclose their constraints, understand the founder’s objective and ultimately choose what benefits the company.

Stebbings describes passing on Riverside after underestimating the future market for creators beyond podcasters. Wittenborn says early investors should consider how a market may develop, rather than only its static size. Neither claims to have known the eventual outcome in advance.

He deliberately limits deal volume to preserve time and mental space for decisions. Missing fewer opportunities is less useful, in his view, than making better judgments on the ones he sees. He cannot recall a specific price-related miss, but says that does not prove one never happened.

At Point Nine he helped invest in Revolut outside the firm’s usual focus and at a higher valuation with lower ownership than it normally accepted. He treats a framework as a test of conviction: an exception should be meaningful, but should not become routine. Stebbings observes that partners can help enforce that discipline for a solo GP.

Wittenborn did not set out simply to be a solo GP; he wanted to pursue a specific strategy and did not want to rush into a partnership. He values autonomy and says an overly aggressive response to a non-consensus idea can affect his judgment. He leaves open the possibility of working with a partner later.

Stebbings asks whether a solo model scales as successive funds create dozens of portfolio companies. Wittenborn acknowledges both the risks of relying on one person and the risk of partnership breakdown. He believes a single decision-maker can suit some early-stage investors, provided their independent judgments are good enough.

He challenges his own decisions using frameworks developed through experience, though he says his assessment of founders is partly intuitive. Different founders can succeed in different contexts; he looks for fit with the problem and ambition rather than a single personality template.

Stebbings argues ambition can grow with experience. Wittenborn agrees and says he has backed founders who initially aimed at a smaller outcome because a strong underlying trend could change their ambitions as the company develops.

The adjacent possible, as he uses it, describes combinations of existing developments creating the next opportunity. He points to earlier research, models and product packaging as steps behind the apparent sudden arrival of AI. This is an investing lens, not a guarantee that evolution or markets follow a fixed path.

He also looks for behavioral shifts, using meditation and screen-time management as examples. He suspects technology use can contribute to social disconnection, while explicitly not claiming it is the sole cause of rising depression. He looks for companies positioned to benefit from such changes.

Asked whether AI applications built on another company’s model are merely thin wrappers, Wittenborn says value can arise from applying technology to a specific workflow or audience. He expects existing subscription products to use AI to improve features and retention, a prediction aligned with his portfolio.

He expects venture and innovation to persist but predicts difficult years and smaller funds for some large firms. Stebbings questions whether multistage investors moving into seed will raise prices. Wittenborn considers that pressure real but potentially temporary, while the two discuss the larger funds’ competing obligations.

Wittenborn says he does not seek every deal where a founder wants a prestigious brand-name investor. Adjacent offers a founder-led, focused and potentially faster process that appeals to some founders and not others. He acknowledges that European founders can favor US investors and expresses mixed feelings about that bias.

Exit paths remain a concern. He hopes the strongest consumer subscription companies will go public, while others may be bought strategically or combined in financial roll-ups. He says he has also invested in three roll-up companies, making that an interest as well as a possible hedge; his expectations are forecasts, not evidence of future exits.

Discussing his upbringing, Wittenborn says growing up mostly with his mother helped shape his independence, while distance from his father left a mark. He also emphasizes that his basic needs were met and recognizes his advantages. As a parent he wants security for his family without treating more money as the ultimate goal.

Having children has encouraged him to think longer term about the companies he backs and their effects on others. He describes responsibility to family, colleagues, portfolio employees and customers, while acknowledging his own ambition and self-interest.

In the quick-fire round, he names Point Nine, Union Square Ventures and Founders Fund as firms he admires, citing focus, founder relationships and conviction. Point Nine’s founders are LPs in his fund, and he has co-invested with USV; these relationships are relevant to his praise.

He says he changed his mind about having a second child after the difficulty of sleep deprivation with the first. Stebbings describes him as content; Wittenborn says that varies over time and cautions that social media often shows only a highlight reel.

He values board member Chet Pipkin, founder of Belkin, for hardware experience and direct, generous feedback. Wittenborn invested in Backbone, a phone gaming accessory, and helped encourage a subscription component; he discusses the company as an investor and board member.

Pipkin’s lesson for founders, he says, is learning to separate personal worth from business performance and be present with family and friends. Stebbings adds that investing requires both conviction in lonely views and the willingness to remain inactive when no opportunity fits.

Wittenborn finds space to think through ideas more valuable than constant activity. He compares work to an athlete’s cycle of preparation, performance and rest, and says time away can restore energy. He also admits fully disconnecting is difficult.

For the next five years he expects to continue the strategy and does not rule out a partner, though he wants any partnership to develop organically through trust and shared work. He says he will reconsider the consumer-subscription thesis if more meaningful outcomes do not emerge in five years; that is his stated 2023 test, not a current result.