Most founders get monetisation backwards. They select a pricing mannequin first, then attempt to make their product match. Like in fishing, it’s necessary to first ‘hook’ the person earlier than shaking them for a hefty subscription. The neatest founders perceive their customers deeply, then design monetisation round precise behaviour patterns.
With over 2 million apps competing for consideration, selecting the best pricing technique typically determines whether or not customers uncover, undertake, and stick along with your app. The mistaken mannequin can kill even one of the best apps, whereas the proper one can flip modest traction into explosive progress.
Let’s take for instance the brand new wave of ‘AI Apps’. AI-native apps face a novel financial actuality: prices scale straight with person engagement. An AI writing assistant may cost $0.02 to $0.10 per request. With 1,000 day by day energetic customers making 50 requests every, you’re taking a look at $1,000 to $5,000 in day by day API prices.
Essentially the most profitable AI apps use hybrid fashions—base subscription with utilization limits, then pay-per-use past that. This retains pricing predictable for customers whereas aligning prices with worth. Think about value-based pricing: cost $10 per video generated reasonably than $0.10 per API name.
On this put up I’ll dive into the assorted monetisation methods for cell apps and supply sensible recommendation for selecting the best mannequin. As for the pricing, that’s a complete subject by itself that requires experiments.
The Full Mannequin Breakdown
| Mannequin | Description | Finest For | Execs | Cons | Examples |
|---|---|---|---|---|---|
| Free (Advert-Supported) | App is free; income from adverts | Excessive DAU apps, content material consumption | Quick person acquisition, no cost friction | Low income per person, advert expertise points | Instagram, TikTok, Information apps |
| Free-to-Play + IAP | Free app with optionally available purchases | Video games, social options, content material | Scales with engagement, whales drive income | Small % monetise, potential pay-to-win | Sweet Crush, Fortnite, Genshin Influence |
| Freemium | Core free, premium options gated | Productiveness, inventive instruments | Giant person base, versatile conversion | Low conversion charges, person frustration | Duolingo, Evernote, Spotify |
| Subscription | Recurring funds for entry | Every day-use apps, content material platforms | Predictable income, retention alignment | Excessive dedication barrier, subscription fatigue | Netflix, Calm, ChatGPT Plus |
| One-time Buy | Single cost for full app | Skilled instruments, premium experiences | Easy and clear | No recurring income, improvement prices | Procreate, Monument Valley |
| Pay-as-You-Go | Cost per use or content material | AI instruments, on-demand companies | Price aligns with utilization | Exhausting to forecast income | OpenAI API, cloud companies |
| Hybrid B2B2C | Client app + enterprise gross sales | Productiveness with workforce options | Excessive-margin B2B income | Advanced gross sales course of | Canva Groups, Notion Enterprise |
Which Mannequin is Proper for You?
The appropriate monetisation mannequin depends upon three core elements: person habits patterns, worth supply timeline, and your value construction.
Begin with person intent and frequency. Every day-use apps with excessive engagement can help subscriptions, however solely after proving sticky utilization patterns. Apps used sporadically work higher with pay-per-use or one-time buy fashions. Social and leisure apps typically thrive with freemium approaches that permit engagement drive monetisation naturally.
Think about your worth supply timeline. Apps that ship rapid, seen worth can cost upfront. Picture editors, skilled instruments, and video games typically work this manner. Apps that require time to exhibit impression—like behavior trackers, studying instruments, or productiveness apps—want freemium fashions that permit customers expertise worth earlier than paying.
Consider your value construction. AI-native apps with variable API prices want usage-aligned pricing. Conventional apps with fastened infrastructure prices have extra flexibility. In case your per-user prices exceed $5 month-to-month, contemplate usage-based fashions from day one.
For those who’re constructing…
- Social/Content material App: Begin Free ? Add Premium Options
- Productiveness Instrument: Freemium ? Subscription (after proving day by day use)
- AI/ML App: Pay-per-use or Credit + Subscription hybrid
- Recreation: Free-to-play + IAP (deal with retention first)
- Skilled Instrument: Free trial ? One-time or Annual subscription
- Market/Platform: Free for customers ? Fee from transactions
Widespread Errors to Keep away from
The most important monetisation killer is introducing subscriptions earlier than proving customers return three or extra instances per week. Ninety % of founders do that as a result of subscriptions really feel like “actual” enterprise fashions, however they’re the toughest to make work.
Underpricing is equally lethal. Founders usually value their apps 3-5 instances lower than their precise worth as a result of they concern customers gained’t pay. This turns into self-fulfilling—customers understand low-priced merchandise as low-value.
For AI apps particularly, ignoring unit economics is startup suicide. For those who don’t perceive your true per-user prices together with API utilization, you possibly can’t value appropriately. Many AI startups fail not as a result of customers don’t love their merchandise, however as a result of they gave away an excessive amount of worth too cheaply.
Keep away from these at your peril:
- Subscription Too Early: 90% of founders introduce subscriptions earlier than proving day by day/weekly utilization
- Underpricing: Afraid to cost what the worth is value (often 3-5x too low)
- Single Mannequin Lock-in: Not experimenting with hybrid approaches
- Ignoring Unit Economics: Not calculating true per-user prices (particularly AI apps)
- Copy-Paste Pricing: Utilizing competitor costs with out understanding their metrics
Ideas for getting cell monetisation proper from the beginning
Begin with person habits, not pricing principle. In your first few months, focus totally on retention and engagement. Implement analytics that monitor how typically customers return, how lengthy they keep, and which options they undertake.
When you perceive patterns, experiment with mild monetisation. A/B check completely different approaches with completely different person cohorts. Construct flexibility into your cost infrastructure from the start—it’s more durable to vary than options.
Your first monetisation mannequin gained’t be your remaining one. The very best methods evolve with person understanding and really feel inevitable to customers—they align so naturally with utilization patterns that customers would select them independently.
At Remagine Ventures, we companion with founders who perceive that monetisation is product technique. For those who’re constructing one thing customers love and wish to optimise how they pay for it, we’d love to debate your method.
