By admin If you’re the founder or CEO of a tech startup or a business centered around a digital product, you already know that the key to any business’s survival is profitability. Without it, the business simply can’t sustain itself.
I’ve seen many stakeholders believe that attracting a large user base should come before monetizing the software. How do I know this? Because I once thought the same when I launched my first product. After observing numerous customer projects, I began to rethink this approach.
Product analytics play a vital role, and tracking active users over time is indeed crucial for understanding your digital solution’s impact. Users are the lifeblood of your business, as they generate revenue through their actions—or, at times, through their lack of action. But the real question is: Do they actually generate profits?
Having a lot of users doesn’t automatically translate to high profits. The unit economics of your product must be structured so that the profit from each user exceeds the cost of acquiring that user. This is the foundation of a sustainable business model.
When excluding revenue from direct sales of products or services through digital channels, monetization becomes the only viable option for achieving a profit. And there’s simply no reason to delay it.
Instead of solely focusing on the number of users and how to attract them, think about how you’ll specifically convert them into paying customers.
To make this shift, I recommend allocating a larger budget for your tech project right from the beginning—one that covers the cost of implementing monetization from day one. Here are four reasons why:
- You’ll Focus on Delivering True Value to Users In one of our past projects, we worked with a wellness startup that launched its MVP with a subscription model from the outset. Rather than fixating on user numbers, they focused on offering high-value, premium features that addressed real user needs. It was a challenging process, but in just six months, they validated their product and began generating steady revenue, which they reinvested into further development and growth. The point here is that by implementing monetization early, you are naturally driven to deliver genuine value. If you’re asking customers to pay, your product must be worthy of their investment. And to make it worthy, you need to ask for payment. This focus on value is essential for long-term success.
- You Secure Operational Funds for the Project Running out of money can be the death of any project. In the example above, the client could have saved 20% of their initial budget but would have risked losing 50% down the line, getting stuck in an endless MVP loop. Instead, they used early-stage profits for operational expenses, allowing them to keep progressing. Moreover, implementing monetization early helps avoid later-stage expenses. Any post-release changes to integrate monetization would require significant additional investment. A clear monetization strategy from the discovery phase ensures you can plan for these needs upfront.
- You Validate the Idea Through Users’ Willingness to Pay Validating your product idea is an essential step in any software development process, but what better way to validate than by measuring users’ willingness to pay? Instead of spending your entire budget on multiple uncertain features, consider dedicating a portion of it to implementing monetization early on. This allows you to gauge interest and prioritize based on concrete, revenue-driven feedback. You’ll be able to use data to make informed decisions, refining your product and aligning your scope with what users are truly willing to invest in.
- You Build User Loyalty for the Long Term Today’s “premium” users are looking for exclusivity and meaningful experiences. Communities are forming around web and mobile products, and understanding how selectivity and belonging tie into monetization is critical. When you begin monetizing early—even with an MVP—you create an opportunity to build a loyal user base. These early adopters are more likely to appreciate your product’s potential, and they’re often willing to pay. They also provide valuable feedback that helps you improve. Remember, payment isn’t just about revenue—it’s also about setting an expectation for long-term commitment. Think of products like Spotify, Headspace, or Grindr. Introducing monetization after users have already become accustomed to free access can cause a major dip in retention rates.
While user numbers are often seen as the ultimate metric of success, it’s the revenue—and a healthy profit and loss (P&L) statement—that truly matter. Whether you’re working on your own digital product as an indie developer or partnering with an external team, make sure you don’t overlook monetization from the start. It’s the cornerstone of sustainable growth and long-term success.