- Steven Cravotta
- Posts
- Stop using the wrong monetization model
Stop using the wrong monetization model
Hey there,
Back in the day, my app Wordle pulled over 10 million downloads without a subscription. It made money from ads.
On the other side my app Puff Count scaled to $44k MRR on subscriptions without putting ads into the app.
Both made money because the model fit how people used the app.
You can't slap subscriptions on a meme generator and expect $10k MRR.
But that's what a lot of founders do. They see every big app running a subscription, copy the paywall and wonder why nobody converts.
People use meme generators when they’re bored. Nobody pays $9.99 a month for memes, so you burn months on a dead paywall.
Your monetization strategy has to match your app. To figure out the right one, answer 2 questions:
How often do people use your app?
What kind of value do they expect from it?
Then match the model to the answers.
Subscriptions fit when you deliver value over and over, like quitting a habit, tracking calories or learning a language.
With recurring revenue, your app doesn't have to go viral every month to make money. Even if downloads drop, you're still making money. If MyFitnessPal got zero downloads next month, they'd still keep most of their $5 million in monthly recurring revenue.
Ads fit when people open the app multiple times a day and stay for long sessions. That's why they worked for Wordle. But you need usage volume and if your users open your app twice a week, ads won't pay your rent.
In-app purchases fit when you've got upgrades, collectibles or vanity features.
Games mastered this. Candy Crush sells $1 to $8 boosts and does $62 million a month. Insane.
The best apps stack the models:
Tinder makes $80 million a month from subscriptions, boosts and Super Likes plus ads between swipes - all in one app. Unfortunately this doesn’t work for most apps.
Figure out your main model and don’t force a subscription on a meme app.
Peace,
Steven