Creating software is exciting and scary at the same time. You want to turn your vision into reality, and you hope it’ll cover your expenses.
Here’s a simple guide to help you get started and, more importantly, keep your business afloat.
TL;DR;
- Where to build: Choose between the web (hosted on your server), mobile (app stores), or desktop (computer stores).
- How to sell: Pick a pricing model that suits your product’s complexity.
- Easy products: Use Freemium or Monthly Subscriptions to let users sign up on their own.
- Hard products: Use a “Request a Demo” process with a sales team.
- Other income: Consider ads, one-time fees, usage-based billing, or even selling software rights (whitelabel) to others.
Where Should Your App Live?
Before you write a single line of code, you need to decide what type of software to make. This affects how people discover your product.
1. Web Apps These are websites that act like software. You host them on your own server. You don’t need anyone’s permission to publish them. People find your product by through search engines. You’ll need to focus on SEO (Search Engine Optimization) to show up on Google, or structure your site so AI search tools can find your answers and recommend you.
2. Mobile Apps These live on phones. You build them and submit them to specific marketplaces. This is great for visibility, but you have to follow their rules. You can sell your mobile apps here:
3. Desktop Apps These are installed directly on a computer (Windows or Mac). While you can sell these from your own website, you can also list them on the Microsoft Store or the Mac App Store to reach a wider audience.
How to Turn Users into Revenue
Once you know where to build, you need a plan to make money. The “right” model depends heavily on what your software does and how complex it is to use.
Freemium This is popular for a reason. You let people use the product for free up to a certain limit (like limited storage or limited projects). This reduces the fear people have of signing up. Most users want to try things before they open their wallets. If your product is simple and easy to understand, this works well because it gets people through the door quickly.
Monthly Subscription This is the standard for many businesses today. You sell access to your software for a lower monthly price rather than a huge upfront cost. Over time, these small payments add up to serious recurring revenue.
- Self-serve vs. Sales: If your product is easy to set up, let people buy it themselves. But, if your software is complicated or takes a lot of work to configure, don’t let them sign up alone. They will likely get frustrated and quit. Instead, ask them to “Book a Demo” with a sales team. A human can walk them through it, ensuring they succeed.
One-time fee This is the old-school way. You charge once, and the customer owns it forever. This is best for products that don’t need constant updates, like small utilities, single-player games, or offline tools. You get the money upfront, but you won’t get another dime from that customer unless you release a sequel or a new version.
Usage-based pricing Here, you charge the user strictly for what they use. If they use a little, they pay a little. If they use a lot, the bill goes up. This feels fair to users because it’s low-risk to start. For you, the revenue grows as their reliance on your tool grows.
Ads If you want to offer your tool completely free, you can put ads in the interface. You make money from the traffic and attention rather than the user’s wallet. This works best if you have a massive number of users performing simple actions.
Lead Magnet Sometimes, the app isn’t the business—it’s the marketing. You build a free tool that solves a specific problem to get people’s contact info or trust. Then, you upsell them on a different, more expensive product or service. The main product covers the cost of building the free app.
Whitelabel This is a clever route. Instead of selling to the end-user, you sell the software to other businesses. You let them put their own logo and brand name on it. They sell it to their clients and keep the monthly profits, while they pay you a fee for the technology. This is great because you don’t need to hire a sales team or do marketing; your partners do all the work for you, providing you with safe, recurring income.
Affiliate Marketing If your app has traffic and trust, you can use affiliate marketing to earn money by recommending other products or services. You’ll earn a commission whenever users make a purchase through your referral link. This works best for niche apps with a highly engaged audience.
Sponsorships If your app reaches a large audience, you may find companies willing to sponsor it. In exchange for their sponsorship, you display their branding or include their product in your app, creating a passive income stream. This is a popular method in the podcast, video, and blogging worlds, but it works for apps as well.
Crowdfunding If you have a compelling product but need help getting it off the ground, crowdfunding platforms like Kickstarter or Indiegogo can provide the capital you need to launch. In return, you offer backers early access or special perks. While this requires a strong marketing effort to succeed, it can be a great way to validate your idea and gain a community of early adopters.
Selling Data (Ethically) Many apps collect valuable data. You can sell anonymized data or insights gathered from your app (with proper consent and legal safeguards). This model is common for apps that gather significant amounts of user behavior or location data. Be transparent about data usage, and make sure to comply with privacy laws like GDPR.
Conclusion
Building an app and monetizing it doesn’t have to be daunting. By understanding where your app will live, choosing the right monetization model, and considering alternative income streams, you can create a sustainable and profitable product. Whether you’re building a simple web tool or a complex enterprise solution, there are strategies out there to make your app not only successful but profitable.
By selecting the right approach, maintaining flexibility, and continuing to optimize based on user feedback and market trends, you’ll be able to build a business around your software that keeps growing and thriving. Happy coding, and good luck with your app development journey!
