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Your App Might Not be a Business


I have tricked myself many times. Forced things I didn't need to force. Let my mind wander from hobby to company too easily. And I bet you have too. The danger of conflating apps or fun projects with businesses is strong, and the only way to escape that danger is to charge money if you think you're building a business.

Getting people to use your app is hard, but the simple existence of a user base does not mean you have a business. When I launched Graphite Docs, I had no intentions of it being a business. In fact, I never even meant for it to be an app that the public used. However, when I decided it was a viable business opportunity, I made the mistake of continuing to let people sign up for free. I didn't even introduce a paid plan until more than a year after the launch. How'd that work out?

Despite having tens of thousands of users, Graphite was never a business. I received grant money during the build process, but because I never made money from my customers, it didn't become a business. There were a lot of mistakes over the course of Graphite's three years, and not charing for the product earlier was one of those mistakes. Had I charged earlier, I could have potentially avoided the problem of incorrectly assuming I had validated the product and had market fit.

If you think your app is a business (and it's ok to have an app NOT be a business), then you need to charge for it. And charge for it early. I almost repeated the mistakes of Graphite with my new side project, Perligo. I launched with a paid plan AND a free plan. This makes sense for many apps, but for a side project for which I want to test the business validity, I need to know very soon how viable things are. Having a free plan extends the runway of time before you learn if people are willing to pay for your solution.

So, last night I sent an email to all Perligo users and subscribers letting them know the free plan would be eliminated on Monday. Existing users on the free plan would get to keep that plan (and its terms) forever, but everyone else going forward would not have a free plan option. This type of decision surely limits the access you have to gaining new (free) users, but capturing free users is only important if you are trying to impress venture capitalists. If you are trying to make money from your businesses, no matter how big or small they are, you need paying users, not free users.