Building An App That Makes Money

Downloads do not pay for development. If users cannot see why your app is worth keeping or what they should pay for, a bigger feature list only makes the loss more expensive. App monetization starts with the value people get from the core journey, not an ad slot added after launch.

ANODA connects that value to the first user flow, the MVP scope and the moment a paid offer makes sense. We help you design a product people understand before you spend the launch budget attracting them. This guide focuses on building the value that supports revenue; the monetization models guide compares the ways to charge.

Discover the Right Opportunity in the Marketplace

When we talk about choosing the right market, this means that your iOS or Android app must be able to satisfy the demand within that market. A good example of a company which chose the right market is Airbnb. They did such a great job with their service app idea in the hospitality industry that they met the demands of two markets. They were able to help people who are looking for temporary lodging or rooms. Also, they were able to help hotel managers and homeowners to find paying guests.

When creating a business model for your future app that makes money, you must determine if your product and its desired market are a suitable fit for each other. The elements which can determine this involve a combination of the customer segment, value proposition, channel, and relationship of the business model.

When you are developing a mobile app and determining which market that it will fit into, you will be developing a Minimum Viable Product first, which satisfies your target audience’s demand or solves a particular problem of theirs.

Recommended Reading: What is Minimum Viable Product and how to build it right

Match the revenue model to the value people return for

An app for a specific audience can be a strong business when it solves an expensive, recurring problem. The size of the audience is only one part of the decision; frequency of use, willingness to pay and the cost of reaching and serving users matter too.

Choose one first audience and one reason they will use your app instead of their current workaround. Decide who pays, what they pay for and when they experience enough value to understand the offer. A subscription suits continuing value; a one-time purchase suits a finite tool; a transaction fee belongs to a completed exchange. Designing the right moment to ask is as important as choosing the model.

Implementation is More Important Than the Idea

Many app startups make the mistake of thinking that an idea of an app that makes money is enough to attract investors. Loan officers and venture investors want to see more than just a good app idea. They want to know that you will be able to bring it to life. They will also ask why customers should choose your version over the alternatives already available.

Recommended Reading: How to raise funds for your startup app

For instance, blogging websites had been around for a while before WordPress ever came around. But the thing that drove WordPress to become the number one blogging platform was its community. There were increasing numbers of people who became dependent on WordPress. It happened because it was the platform for their blog which generated a full-time income for them. This community of moneymaking bloggers allowed the idea of “Premium WordPress Themes and Plugins” to become another type of business model.

Ingredients for startup success

App startup needs to satisfy their users above anyone else. This means creating a great application or service that users will enjoy and that has a high mobile app engagement. The problem is that startup business owners get too preoccupied with raising funds at the beginning of their venture. They don’t focus enough on making a fabulous product that is going to attract more users. If you want to build an app that makes money, you need to put together a skilled team. You should also have a detailed business plan and the right opportunity in the market to succeed. If you can do all this, then investors will be more likely to invest in your startup app.

It is always going to be rough at the beginning of creating an app. You may think you’ve created the right product and found the perfect market for it. However, you will never know for sure if you have until you see the results for yourself. Even the smartest startup entrepreneurs have made mistakes before.

Andrew Mason, who was the creator of Groupon, had previously created another startup named “The Point.” This was a social platform that was going to be like Indiegogo and Kickstarter where people could donate money towards a particular project or request. Mason was fortunate enough to raise $1 million from investors without even implementing his idea first. This was a very rare situation.

Over the next 10 months, Mason and his development team worked on “The Point.” Unfortunately, people simply were not using the platform and it ended up failing. But it wasn’t a total loss because Mason and his team now had an excuse to focus on another project. This would end up becoming the coupon startup website called Groupon. As we all know, this turned out to be a huge success.

If a startup cannot adapt and listen to their users, then it will never survive. A Minimum Viable Product will give you the chance to hear feedback from users. Then you can adapt to their demands and make a successful app which will satisfy them completely.

Creating a Minimum Viable Product

Cutting The Nice-To-Have Features

It is not easy to create an MVP app. One of the most difficult challenges that you will have is cutting away the features and just leaving the main concept. Developers love the features they are planning and do not want to part ways with them. This can make it difficult to pinpoint the main concept of an app. But just remember that a minimum viable product is all about testing out your main app idea. You can always add new features later if the testing phase proves to be successful.

Recommended Reading: Why building MVP is a good idea

Snapchat focused on their main concept during its early days. The MVP app they released let people send pictures which were only briefly visible to other people. After this first launch, additional features and ideas were implemented into the app.

Proper MVP Development

Not all minimum viable products need to be the same. For example, developers with web-based startups may want to create landing pages. This could be just one webpage which outlines all the information about the product. You can even put a subscription button on the page so that people can submit their email addresses in order to receive future information from you. If you want to go even further than this on your landing page, include the various pricing plans that will be available too.

When you choose MVP development, a great deal of manual work will be involved. There is an internet dress rental company called “Rent the Runway” which tried out its model offline before creating the core concept that would be used online. They did this by allowing students in college to try on their dresses. After that, the company asked these students if they would rent the dresses. The point of that approach is to test the buying decision before investing in the complete software experience.

Airbnb tried out their idea in New York by going to the doors of their users, whether they were new or current users. Airbnb thought if they could visit them in-person, they could help improve their listings. When Instacart first began, it was a mere iOS mobile app which had a list of groceries that users could order from. No retailers or stores existed for it at this point. During the first 4 months, Instacart’s founders physically went to the supermarket called Safeway to fulfill users’ orders. There were not even employing drivers either.

Effective App Monetization

Once your minimum viable product has been successful, you can proceed to develop it more, in other words making updates for your app. A lot of app startups will consider monetization models at this point. But don’t get too carried away with the idea of making money with your app. Because it will cloud your focus on growing the app during its early stages.

Design the paid journey alongside the product

Do not leave the offer until the app is finished. Map how users reach the first useful result, see the paid value, choose a plan and manage their subscription or purchase. Include the free and paid states, failed payments and the path back into the product.

For Fusion, ANODA connected signup, tutorial, feed and chat in one dating-app journey and designed the component library for development. Those connected decisions are the foundation of an experience users can understand and return to. Your monetization flow needs the same coherence: the promise, the value and the paid action must feel like one product.

For content-led apps, affiliate revenue is another option. It comes from a configured affiliate relationship and properly attributed links, not automatically from posting a product. Pinterest’s commercial guidelines require clear disclosure of promotional content and set rules for affiliate links. Build the offer and disclosure into the experience.

Turn an app idea into a business people understand

ANODA helps you decide what belongs in the first release and designs the path from first value to the action that earns revenue. You get clear flows, a coherent interface and a prototype your team can assess before committing to the build. Stop funding features that do not strengthen the reason to use or pay for your app.