"It is too early for us to start charging our users.
Why would someone pay for this?
We can start charging after we reach …….. users.
We should start our monetization model at the right time."
Do you hear startup founders saying these over over and over again when they are asked when their product will actually start making money? We certainly do and spend a whole lot of time trying to persuade our entrepreneur partners that the “right” time will never come, surely not before their team runs out of money/time/motivation. Most of the time, it is hard for an entrepreneur to face the ugly truth - that his product might actually never make it. However, it is a fact that only a tiny fraction of startups ever generate revenue and your job as a founder is to find out if you are a member of that elite club or not as early as possible.
Everyone knows that you will be testing a hypothesis when you launch an MVP but whatever game you are playing, the hypothesis must be “Users will pay for my product” . So if you spend two years without trying to monetize, you really have not started testing at all. You have not started the build/measure/learn feedback loop so you are not really getting better. Actually you might be getting better at something but it surely is not your end goal because users who pay behave a lot differently compared to users who are just wandering around because it is free.
The number of startup products that fail while the product is growing steadily is surprisingly high. Growth without financing means you actually need more financing and you will need that extra fuel from your users if you are not one of those rare entrepreneurs that can raise funds before your product starts generating revenue.
The ugly truth is there whether you want to find it or not so it is best that you discover it sooner than later if your users are not willing to pay for your product.
- 1. Scope Management is the Key to Stay on Track
- 2. Marketing Tips for Startups
- 3. Define Your Exit Strategy
- 4. Community Building Tips for Startups
- 5. A Case Study For In-House Solution Vs Third-Party Solution Dilemma
- 6. Why users don’t want to use your app?
- 7. Define the North Star for Your Product
- 8. Selecting Tech Stack for Your Startup Product
- 9. What are the Roles in a Startup Product Development Team?
- 10. 4 Reasons to Impact Investing