Hello future founder 🚀

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If there's one question I get asked all the time by aspiring founders, it's this: "How can I make money from this app?" It's a great question, and it's one that every app creator needs to think about early on.

In the world of app development, creating a successful app is only half the battle. The real challenge lies in monetising your app effectively. Many billion-dollar tech unicorns started with humble beginnings, experimenting with various revenue models before hitting the jackpot. How did they do it? What can we learn from their journeys?

As someone who works with founders day in and day out, I've seen a wide range of app ideas and monetisation strategies. Some have hit the mark right away, while others have had to pivot multiple times before finding the right fit. The key is to understand the different ways apps can make money and to be open to evolving your strategy as your app grows.

Interestingly, one of the most counter-intuitive lessons I've learned is that sometimes it's best not to monetise the first version of your app (the MVP or "Minimum Viable Product") at all. Why? Because our main goal should be to get as many users as possible. Introducing a paywall too early can inhibit user growth. Once we've got thousands of users, the ways to monetise reveal themselves much more easily.

In this article, we'll explore how five tech giants - Facebook, Uber, Airbnb, Instagram, and WhatsApp - monetised their MVPs, how they evolved their revenue streams over time, and the lessons you can learn from their journeys. We'll also define the various ways apps can make money to help you choose the best strategy for your app.

Let's dive in and see how these billion-dollar tech unicorns turned their innovative ideas into profitable ventures.
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The Ways Apps Make Money 💰

Before diving into the examples, let's define the primary ways apps can generate revenue:

1. Advertising: Displaying ads within the app. This can include banner ads, interstitial ads, video ads, and native ads.
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2. In-App Purchases: Selling virtual goods, premium features, or other content within the app.
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3. Subscription Fees: Charging users a recurring fee for access to premium content or features.
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4. Freemium Model: Offering a free version with basic features and a paid version with advanced features.
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5. Transaction Fees: Taking a commission or fee from transactions made through the app.
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6. Sponsorships and Partnerships: Partnering with brands or companies to promote their products or services within the app.
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1. Facebook: From Ads to Data Monetisation 👁️

MVP Revenue Model: Advertising

In its early days, Facebook primarily made money through advertising. The platform offered businesses the ability to target ads based on user interests and demographics, which was revolutionary at the time.

New Revenue Streams Over Time:

• Sponsored Posts: Allowing businesses to pay for posts that appear in users' news feeds.
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• Marketplace and Payments: Introducing Facebook Marketplace and facilitating transactions with Facebook Pay.
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• Data Monetisation: Leveraging user data to enhance ad targeting and effectiveness.

Key Takeaways:

• Targeted Advertising: Offering businesses precise targeting options can significantly increase ad revenue.
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• User Data: Leveraging user data responsibly can enhance ad effectiveness and attract more advertisers.
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2. Uber: Disrupting Transportation with Dynamic Pricing 📈

MVP Revenue Model: Ride Commissions

Uber made money by taking a commission from each ride. The dynamic pricing model, where prices surged during high demand, also contributed significantly to their revenue.

New Revenue Streams Over Time:

• Uber Eats: Expanding into food delivery with a commission-based model.
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• Subscription Services: Introducing Uber Pass for discounted rides and deliveries.
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• Advertising: Displaying ads in the app and on cars.

Key Takeaways:

• Commission-Based Model: Taking a cut from each transaction can be a lucrative revenue model.
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• Dynamic Pricing: Implementing a flexible pricing strategy can maximise revenue during peak times.
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3. Airbnb: Monetising Shared Spaces 🏡

MVP Revenue Model: Booking Fees

Airbnb made money by charging a booking fee to both hosts and guests. This fee structure allowed Airbnb to generate revenue while providing value to both parties.

New Revenue Streams Over Time:

• Experiences: Offering paid local experiences and activities.
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• Subscription Services: Introducing Airbnb Plus for premium listings.
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• Insurance and Services: Providing additional services like insurance for hosts.

Key Takeaways:

• Two-Sided Marketplace: Charging fees to both sides of a transaction can double your revenue streams.
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• Trust and Safety: Investing in user trust and safety features can encourage more transactions.
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4. Instagram: Building Value Before Monetisation 🕶️

MVP Revenue Model: None

Instagram initially focused on building a user base and enhancing the app's features without any revenue model. Once the platform had a substantial user base, it introduced sponsored posts and advertising.

New Revenue Streams Over Time:

• Shopping Features: Allowing businesses to sell products directly through the app.
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• IGTV and Reels Ads: Monetizsng video content with ads.
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• Subscription Services: Introducing features like Instagram Subscriptions for exclusive content.

Key Takeaways:

• User Growth First: Sometimes, focusing on user growth before monetisation can lead to greater long-term success.
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• Native Advertising: Integrating ads seamlessly into the user experience can enhance engagement and ad effectiveness.
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5. WhatsApp: Subscription Model to Acquisition 🤝

MVP Revenue Model: Subscription Fees

WhatsApp charged users a small annual subscription fee after the first year of free use. This model ensured a steady revenue stream without relying on ads.

New Revenue Streams Over Time:

• Business API: Charging businesses for using WhatsApp Business API to communicate with customers and buy their data.
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• WhatsApp Pay: Facilitating peer-to-peer payments and transactions.
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• Acquisition by Facebook: Leveraging Facebook's resources for further monetisation strategies.

Key Takeaways:

• Subscription Model: Charging a small, recurring fee can provide a steady revenue stream.
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• Focus on Value: Providing a valuable, ad-free experience can justify subscription fees.
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Conclusion

Monetising an app effectively requires a deep understanding of your target audience and the value your app provides. The early revenue models of these billion-dollar tech unicorns offer valuable lessons for any aspiring app creator. Whether it's through targeted advertising, commission-based models, booking fees, user growth strategies, or subscription fees, there's no one-size-fits-all approach. The key is to experiment, learn, and adapt based on user feedback and market conditions.
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Ready to turn your app idea into a profitable venture? Contact Rebelled for a free consultation to discuss your idea and let’s make some magic together 🪄