How to Make Money from Apps

By Zhenyi Tan

Disclaimer: I’m the creator of a subscription-based web service, so I might be a bit biased. And I’m not even following my own advice here. So, please take my words with a grain of salt.

You know how sometimes you see someone launch an app and then people are like, “I like the app, but I don’t want to pay the subscription.” However, if you want to make money from apps, you should charge a subscription. The pay-once-update-forever model? Not sustainable, trust me.

If you’re going with subscriptions, don’t bother with consumer apps. Many consumers are already fed up with subscriptions. Instead, consider making apps for small business teams.

Remember these 3 magic words: Small. Business. Team.

Let’s do some math. Most subscription apps in the App Store charge around $1 per month, maybe $5 for the more expensive ones. Let’s say you’re not a famous developer, but you hustle and manage to get 1000 subscribers. That’s about… $840 a month if you’re on the App Store Small Business Program.

It’s not exactly quit-your-day-job money, especially in a developed country. Plus, you’ll now have to deal with customer support, handle feature requests, and keep your app updated for your 1000 users.

Now, let’s look at business apps. Their plans usually start from $50 a month, maybe $25 for the cheaper ones. If they charge per user, it’s at least $5 per user per month.

Businesses aren’t like consumers. They don’t care much about new features. They just want the app to keep working. They’re willing to pay for it because it’s just another business expense. Some businesses even pay more for toilet paper per month than your app.

And why small businesses? Because big businesses are a pain to deal with. The enterprise software market is a whole different beast, with a very different sales process. Unless you’re planning to hire a sales team to negotiate with big companies, forget about enterprise software.

Now you’re probably thinking, “But what about solving my own problem? I’m not running a business, and I don’t know what problems other small businesses have. How do I make an app for them?” The usual advice is “go talk to your customers,” but that’s easier said than done, especially if you’re not the marketing type. (I’m definitely not the marketing type.)

And if you’re not interested in, say, the nail salon business, do you really want to make an app for nail salons? You could, but then it starts to feel more like a 9-to-5 job and less like the indie developer life. At that point, you might as well get a job.

Unfortunately, I don’t have any answer for this. Maybe start by treating your app business as a business and try to solve its problems? I hope you figure this out. I’m also trying to figure this out so I can share my experiences with you.