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After how long do startup companies start getting their first paid users for a software (app) service company?

  • “Customers from day 1” is a mostly meaningless marketing phrase, because the company defines which day the first day is. If a couple of PhD students start a company based on their research project then they can sales on day 1, but only because the PhDs spent years doing research and writing papers that gave them the expertise and credibility they needed.

    Sales on day 1 is also trivial when your product is trivial. Create some silly gizmo where people can do something kinda cool for a couple of bucks. Get buzz going in social networks and you’ll make some money right away. Sustainable business? Probably not.

    Whether charging for your business early on is a good idea depends on your market and growth aspirations. Especially in software services growth requires a massive sales and marketing budget. If you focus on profitability early on then you’ll get linear growth at best.

    If you deliver some BS me-too product or service, charge right away. If you’re doing something new that requires a lot of work for a proof of concept, then that’s fine too. You’ll risk burning through a lot of money without making a single penny, but that’s the game.

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  • I am in the mobile app business. My main app is freemium, and I had paying customers since day one. Of course, at day one, I had very low revenue. It was really a dime. But the essential thing is to put a price on your service. Currently, it is impossible to launch a paid app without a big marketing budget. You will never be visible. I tried last month to launch a tiny paid app on the App Store, just to verify this assertion, and I can tell it’s true: after an initial 7 days period where search on your keywords match enough to make your app visible to people who take the time to scroll, you completely disappear if you didn’t sell big numbers. So, you can forget it and go freemium right now.

    Don’t start with a free app with no in-app purchases. You must have something to sell in your version 1.0. If not, when you will add payable service, your users accustomed to the “all free” model will kill you with one-star ratings and angry reviews. Then you are dead, and there is no way to come back in the game. Except if you consider new app, new company, new name, new design… costly mistake, isn’t it ? :o)

    Your free offer must be exciting. Don’t put free crap and beautiful paying features. It won’t work. Your free app must be useful and pleasant to be downloaded and highly rated. If not, you are dead, because people willing to pay would never find you.

    From my own experience, I can say the app market becomes harder and harder month after month. Apple favors incumbents. Really. Featured new apps on the app store are usually tiny updates of old titles which sell well. You will never see one really new app featured. It stopped about one year ago. There are enough apps on their store, they don’t need to attract new developers. Maybe the Windows Store is still opened. I will give it a try, just to know…

    But for sure, go freemium, with in-app purchases, with a very good free offer right now: you have only 7 days to go up the charts. After that, you won’t have a second chance to take off. Your payable offer may be crap, it’s less important, but it must exist at day one.

    Just my two cents…

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  • We start the development of a Saas based loyalty program for retailing 10/2013. 24/11/2013 we had our fist version ready for use. On 12/20 we had our first store using it. We ended up loosing that customer. Our second customer started testing our product 01/22/2014. First check came in 04/22/2014 from that customer. They have been paying ever since, and we have now about 12 paying customers, growing 2-5 customers per month in the last 3 month.

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