More and more startups are focussed on creating apps - it's a huge market with amazing potential. But what's the best way for an app to make money, in a marketplace where lots of your competitors might be free to download? Do you shelve the idea of making a profit at the start and concentrate on getting people interested in it first, offer a variable pricing system, or keep the app free or low-cost forever and opt instead for in-app advertising? We spoke to Sophie Cooper, the co-founder of innovative children's education app Fonics, about how to monetise an app.
What is the business model of your app?
Fonics is a free app for home and parent use, and we've chosen this to help stimulate growth. We have a PRO service which is for teachers and teaching professionals, however, that is paid for. This offers teachers the ability to track their students' progress in order to tailor their lessons specifically to their students' needs, as well as a whole host of other useful teaching resources.
Have you monetised the app or are you in the process of doing so?
We have not monetised our app specifically but we may well look into in-app purchasing once we get to a certain level of users. Because our target audience is three to seven year-olds we do not believe it is morally right to advertise to them, so that is off the table for us! We have a Fonics PRO service which we will be using to provide revenue which offers different services, some separate from the app.
What monetisation models did you consider?
We have considered all models and have researched lots of different companies to see how we can adapt similar techniques. We are open to considering all models and are looking into doing trials to see what works best. At the moment, however, we are concentrating on growth over monetisation.
How did you decide on the one you do use?
When we first started we didn't actually think too hard about how we would make money! We knew that if we created the best resource in the world at teaching children to read then numerous monetisation routes would open up to us.
Will you diversify as you learn more about your business?
Absolutely - we have chosen to focus on generating a revenue stream from teachers, but this is not to say that we won't change this in the future. As our user base and customers grow, we are looking to constantly adapt our business model.
What’s been the biggest challenge so far?
The biggest challenge we have found is getting our product out there. We are unique in what we do but the app market is a busy place and standing out is difficult. We have by no means perfected this and are learning all the time, but through app-store optimisation and Google optimisation we are slowly increasing our conversion rates.