Why do some startups struggle with monetization?

If you are a developer founder or a technologist founder creating your own products, you tend to spend a lot of time trying to perfect them. It's not costing you anything except your own time, which can be very cheap when you're a founder. And if it's something you're enjoying, you don't often think about how you will monetize it. When you launch, you typically get a lot of people who have shown interest and may actually use your product, but they’ll use it for free. If you ask them to pay for it, they back out, or it could be that you never figure out how to monetize it. And I've seen that happen a lot both in Brisbane and elsewhere: a startup has a good open source tech product, but it's not a business because you can't monetize it.

It's sort of like the Wiki technology problem. Wiki was developed by an engineer, Ward Cunningham, who knew it was very useful because he was using it within his own organization. But he also knew that it couldn't be easily monetized, so he made it an open source product and it's been one of the most beneficial solutions out there. It’s a dichotomy where you know people are using it, but it can't be monetized. And the only solution to that problem is to put on your marketing and sales hats early on. That way you know that whatever you're working on is going to be monetizable when the time comes.

On the other hand, sometimes you have a tech product that is not taking off, but you think it will if you add one more feature. I’ve done a salvage job on a startup like that, and by the time I came in it was already one and a half years into its development. I managed to get it out of development and launched it as an iPhone app, but it wasn't taking off. The thinking was that it would take off if it was an Android app as well, because it had been excluding part of the market. But when we did get the Android app out, it still didn't take off.

We also did some advertisement until the founder finally accepted that something had gone wrong in the process and called it quits. He had started the journey without me sometime in 2017 and I told him, “If I had met you in 2017, I would never have let you greenlight a development project. I would've gotten you to do a low-cost, no-code proof of concept of your idea before you went ahead with it.” He came from a marketing background, so his idea made sense to marketers like him but it didn't make sense to anybody else. And you need to be able to communicate the benefits of your product to the wider public.