My AI App Has Users But No Revenue

"I have 30,000 monthly active users. Great retention. Everyone loves the product. But I'm making almost nothing."

I've heard this story dozens of times. It's one of the most frustrating positions to be in—you've validated the product, but the business isn't working.

The good news: this is fixable. The bad news: you're probably making one of these common mistakes.

Diagnosing the Issue

Problem 1: You're waiting for users to convert

Symptom: You have a free tier and a paid tier. Conversion is 1-2%. You're hoping it'll improve.

Reality: For most consumer AI apps, 95%+ of users will never pay. Ever. You're subsidizing them with your API costs.

Problem 2: Your pricing is wrong

Symptom: You're charging $10/month and getting 2% conversion.

Reality: At $10/month with 2% conversion and 30K users, you're making $6K/month. If your API costs are $10K/month, you're losing $4K.

Problem 3: You're not monetizing free users

Symptom: Free users = no revenue. You treat them as "potential conversions."

Reality: Free users are an asset, not a liability—if you monetize them properly.

Problem 4: Your monetization hurts UX

Symptom: You added banner ads. Engagement dropped. You panicked and removed them.

Reality: Traditional ads don't work for AI. You need AI-native monetization.

The Fixes

Fix 1: Monetize free users with AI-native ads

This is the biggest unlock for most struggling AI apps.

Fix 2: Raise your prices

Most AI apps are underpriced. If you're providing real value, test $25, $30, even $50/month.

Fix 3: Add usage limits to free tier

Unlimited free usage is killing you. 20 queries/day is reasonable. It reduces costs and creates upgrade motivation.

Fix 4: Create a hybrid model

Free tier (ad-supported) + Paid tier (ad-free + premium features). This captures revenue from both segments.

Action Plan for This Week