- Oct
- 27
- 2008
Launch Your App With Revenue in Mind
By: Robert Dempsey | Tags:
Summary
In this post I discuss the importance of launching your site with a revenue model in place, whether you want to get investment from a VC firm, or you want to create a monthly revenue stream. Getting paid for your efforts is important. To create value you have to listen to your customers and let them drive the demand.
The Goods
I had the great fortune to have my friend Anthony Eden come by before the last ORUG meeting and work with us in the ADS war room for the day. We discussed how chi.mp was doing, and we also discussed expens’d. As expens’d is our first foray into commercial products and Anthony already had one live, I asked him what he thought about our product launch, which consisted of a blog post, a tweet, and a listing on killerstartups.com. He said we did a number of things right:
- We launched - many people have ideas, not everyone launches them
- We have a revenue model in place from day one - there are paid accounts to go along with the free version
My advice to everyone that is preparing to launch a site is to launch, and launch with a revenue model in place. And by revenue model I don’t mean advertising, I mean paid accounts. David Heinemeier Hansson, in his Startup School talk, challenged the audience to charge for their apps. And why not? It costs money to maintain a web app and add features.
Want to be picked up by a VC firm? All of the VCs I’ve spoken with say that a site has to be up and making money before they’ll consider investing in it. With today’s market, they want to mitigate their risk, and if you’re already making money and can make a solid case for growing revenue, you’re more likely to be picked up.
Want to generate monthly revenue? Then you definitely need paying customers.
Is free dead? Should you have a free version of your app? As one commenter on a previous post said, it depends on your audience. I am in the camp of, “hook em with free, get them to love your app, and then offer even more value so they upgrade.” How do you offer value? Listen to your customers. What feedback do they have on current features? What features are they asking for? Let your customers drive your demand.
Questions for You
How do you get feedback from your customers? Do you send email surveys? Do you have a support site that is open to everyone? Once you have their feedback, how do you turn that into value they are willing to pay for?
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