What’s your best tip for monetizing an app today and why?

The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

app monetization
photo credit: Jorge Quinteros via photopin cc

1. Build Something People Want

Without a doubt, the best way to make money is to create a product that people are willing to pay for. It may seem obvious, but it drastically changes your customer development phase if your goal is to understand “Would you pay for this? How much would you pay?” rather than “Would you use this? Why?” They are both valuable, but if you want to make money, start thinking about the former.

Gagan Biyani, Growth Hackers Conference

2. Use Apps for Lead Generation

It can be difficult to make apps profitable as the price point is so low. However, what apps lack in cash they make up for in audience. Releasing a popular app is a great way to get in front of thousands of people you may not have reached through other channels. Use apps to generate business leads, rather than profiting from selling the app directly.

Laura Roeder, LKR Social Media

3. Don’t Depend on Advertising

If you have dreams of making millions of dollars by monetizing an app with an advertising-revenue model, you need a reality check. Mobile advertising CPMs are low, and you’ll need millions of users generating hundreds of millions of ad impressions. Having done this before and seen how difficult it is, my advice would be to pick a revenue model that requires users to pay for the product somehow.

Emerson Spartz, Spartz

4. Effectively Integrate Ads Into the App

If a potential customer is interrupted by your ad, you’ll simply irritate him and nothing more. Instead of including the ad as an annoying popup, consider implementing banner ads.

Andrew Schrage, Money Crashers Personal Finance

5. Take a Nod From Gaming

Monetizing on free apps has been fully embraced by the social gaming industry. They realized banner ads are largely ineffective, and premium content works. At Playerize, we see many users balk at pulling out their wallets, so we help brands subsidize those users’ premium purchases in exchange for completing offers. Monetize all your users, not just the ones with cash.

Derek Shanahan, Playerize

6. Require In-App Purchases

Even if you have a compelling product, it requires a critical mass to succeed in a crowded market. Offer basic features for free to maximize buy-ins, and then require the user to pay within the app (in-app purchase) to download and use premium or additional features. Games are the best examples of this monetization strategy.

Rahul Varshneya, Arkenea

7. Create a Real Business

There are a lot of ways to monetize an app, but let’s face it — way too many people waste a lot of time building apps/sites reliant solely on ads or data that never achieve the mass necessary to become a real, sustainable business. Make sure there is a market for whatever you’re building — you need customers, not just users.

Carlo Cisco, FoodFan

8. Beat the Market

Research apps similar to yours, and determine how they’re monetizing — and the effectiveness of their monetization. Are they maximizing value to their users, while maximizing profits as well? Both are crucial to build a sustainable app, yet oftentimes, one aspect is ignored. With that in mind, focus on finding better ways to build value for your users, while maximizing profits at the same time.

Fehzan Ali, Adscend Media LLC