Opinion on making an app/SAAS starting as free and then finding a way to monetize it?

[liam_hughes_85]

Kinda curious. Not talking about the type of companies that never make money for years, but starting something and later (ie in less than a year, ideally less than 6 months) finding a way to profit off of it.

To all the seasoned entrepreneurs here, is this something you would put your time into, or avoid like the plague? If this was something you were considering pursuing, would the risk of not being able to monetize it outweigh the potential for you?

Have my own opinion about this, not averse to putting the time in and grinding it out with uncertainty of the outcome; just curious to see what the veteran entrepreneurs would say.

 

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[Jon822]

Technically, this is exactly what MJ DeMarco did. His original website solved a need before making any serious money until he decided to sell lead generations. The volume of lead generations were directly proportional to the traffic size of his website so even when he was growing it without it exporting a proportional amount of money, it was an investment into his future revenue. Some business models require that it grow to a certain size threshold before it makes sense to start worrying about profits. A simple example would be a user-focused website.

"Is it worth it?" boils down to the amount of value the business will provide and can capitalize on in the future. Would I work for free for 6 months if it meant I could then start charging $5/user plus ad revenue and any other monetization options? Of course I would. This is basically the business model of most (if not all) websites, inventions, etc. And actually, most entrepreneurial endeavors probably involve a work for free with no feedback stage. I believe Mj refers to this is as the "Desert of Desertification".

 

[liam_hughes_85]

Technically, this is exactly what MJ DeMarco did. His original website solved a need before making any serious money until he decided to sell lead generations. The volume of lead generations were directly proportional to the traffic size of his website so even when he was growing it without it exporting a proportional amount of money, it was an investment into his future revenue. Some business models require that it grow to a certain size threshold before it makes sense to start worrying about profits. A simple example would be a user-focused website.

"Is it worth it?" boils down to the amount of value the business will provide and can capitalize on in the future. Would I work for free for 6 months if it meant I could then start charging $5/user plus ad revenue and any other monetization options? Of course I would. This is basically the business model of most (if not all) websites, inventions, etc. And actually, most entrepreneurial endeavors probably involve a work for free with no feedback stage. I believe Mj refers to this is as the "Desert of Desertification".

Absolutely. The first thing that came to mind was MJ's project, and the desert of desertion thing is real for sure. Been on my entrepreneur journey for about 2 years and have put almost all of my free time into different ideas, most/all of which have not been successful per say but have given me a lot of insight.

Just to clarify, I didn't mean to sound like I'm ignoring the "having to work for 'free' for indefinite periods of time" factor because I'm for sure in that boat right now and have been for a long time.

Thanks for your input!

 

[jdm667]

Kinda curious. Not talking about the type of companies that never make money for years, but starting something and later (ie in less than a year, ideally less than 6 months) finding a way to profit off of it.

To all the seasoned entrepreneurs here, is this something you would put your time into, or avoid like the plague? If this was something you were considering pursuing, would the risk of not being able to monetize it outweigh the potential for you?

Have my own opinion about this, not averse to putting the time in and grinding it out with uncertainty of the outcome; just curious to see what the veteran entrepreneurs would say.

I think there are worse things you could pursue as an entrepreneur. You will definitely learn some skills - regardless of the financial outcome.

Start with a simple free version of your app. Ask for emails so you can send users an update on new versions of the app.

You can also send out emails with a question about what problems your users have or what features they need.

Later on, your email list is likely to bring you some of your first paid customers.

If your app has an associated website, you can write content to promote the app, answer FAQs, etc.

If nothing else, you will learn about websites, content, apps, and the niche/industry you are in. You will probably also make connections in your industry.

Maybe soneone will acquire your app, and you can roll the funds into your next venture.

Keep me posted on how it goes! I will be following this thread.

 

[liam_hughes_85]

I think there are worse things you could pursue as an entrepreneur. You will definitely learn some skills - regardless of the financial outcome.

Start with a simple free version of your app. Ask for emails so you can send users an update on new versions of the app.

You can also send out emails with a question about what problems your users have or what features they need.

Later on, your email list is likely to bring you some of your first paid customers.

If your app has an associated website, you can write content to promote the app, answer FAQs, etc.

If nothing else, you will learn about websites, content, apps, and the niche/industry you are in. You will probably also make connections in your industry.

Maybe soneone will acquire your app, and you can roll the funds into your next venture.

Keep me posted on how it goes! I will be following this thread.

Thank you for your input! When I finish it, I'll post it here for anyone interested with no intention of soliciting anyone.

 

[Vasudev Soni]

Kinda curious. Not talking about the type of companies that never make money for years, but starting something and later (ie in less than a year, ideally less than 6 months) finding a way to profit off of it.

To all the seasoned entrepreneurs here, is this something you would put your time into, or avoid like the plague? If this was something you were considering pursuing, would the risk of not being able to monetize it outweigh the potential for you?

Have my own opinion about this, not averse to putting the time in and grinding it out with uncertainty of the outcome; just curious to see what the veteran entrepreneurs would say.

As you know, monetisation is very important for a business to survive, and having some plans of how to monetise the business should always be included in your business plan (or in your mind).

Spending 6-12 months on building and launching a saas/app only to find out later that it can not be monetised would not be a wise decision.

The most important asset we have is TIME. Spend it wisely.

I also spent about 3-4 months building my app, but I had planned in advance how I would monetise it when I start getting users. So, having some idea about this is a must.

 

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