Everyone talks about building software. Far fewer actually make money from it. It’s easy to get caught up in the hype — spinning up a SaaS, sketching out pricing tiers, dreaming of MRR and exits. But before any of that matters, you need one thing: clarity. What exactly are you building? Who is it for? Why would anyone pay?

Not Every App is a Product

You’ve built something — maybe a clever script, a helpful tool, or even an entire app. But before you start pitching it, pricing it, or putting up a landing page, stop and ask: what exactly are you building? Is it a full product that solves a clear problem for a specific audience? Or is it just a feature waiting to be absorbed into something bigger? Maybe it’s a service with some automation dressed as software.

Most software projects fail not because they’re poorly built, but because they’re poorly defined. And when you get the definition wrong, the monetization strategy falls apart.

If you’re looking for monetization models and pricing ideas, start with this guide on software monetization strategies. But here, we’re focusing on something even more fundamental: naming what you’ve built — so you can figure out how to sell it.

Let’s break it down.

What Exactly Are You Building? It Matters More Than You Think

Before you can make money on software, you have to understand what you’re trying to sell. And no — “an app” is not a helpful answer. Many developers jump straight into pricing models and growth tactics without first defining what kind of software they’ve created. That mistake leads to wasted time, wrong assumptions, and products that never find a market.

Most software projects fall into one of four categories — each with very different implications for monetization and positioning. Let’s look at them side by side:

If you’re building a product , then you’re expected to deliver the full package: UX, support, updates, onboarding, pricing plans — the works. This is the most common SaaS dream, but it’s also the hardest path to execute well.

When the core of your software is just one isolated capability — like resizing images, sending email, or summarizing text — you’re dealing with a feature , not a product. That’s fine, but trying to sell it independently often leads to frustration. Features work best when embedded inside bigger systems or offered as plugins or API endpoints.

A tool, on the other hand, might have no UI at all. These are scripts, libraries, or technical helpers used by developers or operations teams. You won’t sell them to the average user — but they can still be monetized through licensing, GitHub sponsorships, or as part of enterprise tooling.

Finally, there’s the wrapper — a product-looking interface that actually wraps a service. For example, if your “app” sends branded reports to clients, but you generate half the content manually, that’s a wrapper. Nothing wrong with that, but you’ll want to price it like a service, not like a true SaaS.

Recognizing which of these you’re building helps set realistic expectations. It shapes how you pitch it, where you find your customers, and even whether monetization is viable at all.

Functionality Doesn’t Equal Value

A lot of software works. That doesn’t mean it’s worth paying for.

This is a hard lesson for many developers — especially those who enjoy building for the sake of building. You may have created something clever, efficient, even elegant. But until that functionality solves a painful, real-world problem for someone — and does it better than alternatives — it’s not valuable in a business sense.

The key difference is this:

• Functionality describes what your software does.
• Value explains why someone would pay for it.

You can think of it this way: a button that resizes images may work perfectly, but if your user doesn’t need to resize images often — or if they already use Canva or Photoshop — they’re not going to pay for your solution. On the flip side, a buggy spreadsheet that saves someone two hours a day might still be considered valuable because of the time it returns to them.

This gap between what software does and what users care about is where many monetization plans fall apart.

Let’s say you built a highly configurable API testing tool. It works beautifully. But your target customer is already using Postman or hasn’t felt any pain from their current workflow. The problem isn’t your code — it’s the lack of urgency or incentive for anyone to adopt it.

So before you put a price on your product (or even try to grow it), validate its value. That means talking to real users, understanding what frustrates them, and measuring how your software changes something important for them — cost, time, efficiency, outcomes.

Five Real Paths to Profit: How Developers Are Actually Making Money with Software

Let’s move from definitions to reality. You’ve figured out what kind of software you’re building. Now comes the big question: how do you actually make money from it?

Spoiler: it’s not always by launching a SaaS, raising funding, and chasing growth charts. In fact, some of the most sustainable revenue models come from smaller, smarter plays — built around solving real problems for focused audiences.

Here are five proven, real-world paths developers are using to turn software into revenue — often without a team, funding, or even a product launch.

1. The Micro-SaaS Model: Niche, Focused, and Profitable

Instead of trying to be the next Salesforce, many developers are building smaller tools that serve specific industries or narrow use cases. These “micro-SaaS” products target pain points that are too small for big companies to care about, but painful enough that people will pay for a good solution.

Think: a booking widget built just for tattoo artists. Or a tax calculator designed for freelancers in Sweden.

Micro-SaaS doesn’t scale to unicorn valuations — but it doesn’t have to. With low overhead and limited support requirements, a tool earning $2K/month can become a healthy business.

2. Paid APIs or Data-as-a-Service

Sometimes, the value isn’t in the interface — it’s in the data or the processing power behind the scenes. Developers are monetizing useful endpoints as paid APIs, especially when the API provides something hard to build or resource-intensive to run.

Examples include AI inference, custom search engines, analytics aggregation, and location-based tools. Pricing can be per request, tiered by usage, or bundled with dev support.

If your code can do something others want to plug into — and you can handle reliability and billing — this can be a lean, dev-friendly business model.

3. Licensing or White-Labeling Your Code

Selling your software as a service isn’t always the best move — sometimes it’s better to sell the rights to your software instead.

In B2B settings, especially, companies may prefer to buy a license to use or even modify your codebase. If you’ve built something valuable but don’t want to run a company around it, licensing deals or white-label agreements can bring revenue without the demands of customer support or infrastructure.

This model works especially well when selling to agencies, internal teams, or industry-specific partners.

4. From Client Project to Product

Many developers stumble into revenue by accident — building something custom for a client, then realizing they can turn it into a reusable product.

If you’re freelancing or working in an agency, pay attention to patterns. If three different clients ask you to build some version of the same tool, you might have the foundation for a productized version you can resell — often with minimal changes.

This route combines custom dev cash flow with long-term product upside — and often uses real-world feedback from day one.

5. Plugins, Integrations, and Add-Ons

You don’t have to reinvent the wheel. Instead, build something that makes existing software better.

Developers make money by creating add-ons for platforms like Shopify, WordPress, Notion, or even ChatGPT. These products benefit from a built-in audience, have a clear problem-solution fit, and often involve less marketing risk than launching standalone software.

These integrations can be sold via app stores, subscription plans, or one-time licenses — and in some cases, acquired by the platforms themselves.

The Mistakes That Will Cost You: Why Most Software Projects Never Make a Cent

If you’ve been around long enough, you’ve seen it happen: someone builds a beautiful product, posts it on Product Hunt, gets some claps, maybe even a few upvotes — and then… silence. No customers. No revenue. Six months later, the site is offline and the domain is for sale.

What went wrong? Often, it’s not the code. It’s the thinking behind it.

Let’s walk through the most common mistakes that quietly kill software businesses before they ever make money.

Mistake #1: Solving a Problem No One Is Really Feeling

One of the most common traps is building a solution in search of a problem. Just because something can be automated doesn’t mean someone’s willing to pay for it. There’s a difference between “nice to have” and “must have.” If your users don’t feel the pain acutely — if they’re not already hacking together solutions with spreadsheets, Zapier, or manual labor — then they’re unlikely to reach for their wallets.

Before you write a line of code, talk to potential users. Better yet, charge for a prototype or early access. That’s how you learn whether your problem is real.

Mistake #2: Mistaking Features for a Business

You’ve built something cool — say, an AI-powered tagging engine or a slick PDF converter. That’s great. But is it a feature or a business?

Trying to sell a single function as a standalone product usually ends with disappointment. Features belong inside bigger systems. If your tool makes something else better, then consider integrating it, selling it as a plugin, or turning it into an API — not a full-fledged SaaS.

Mistake #3: Overbuilding Before Validating

Perfection is the enemy of launch. Many developers spend months (or years) polishing a product without ever putting it in front of a real user. They build dashboards, integrations, admin panels — all before they’ve made a single sale.

The better approach? Launch early. Charge early. Sell ugly. If people aren’t willing to use your unfinished tool, they probably won’t use the finished one either.

Mistake #4: Ignoring Distribution and Marketing

“Build it and they will come” is not a business plan. Code doesn’t sell itself. Yet too many developers treat marketing like an afterthought — or worse, a dirty word.

In reality, marketing is just communication: understanding who your users are, what language they use, and where they hang out. If you can’t clearly explain the value of your software in one sentence, you’re not ready to sell it — no matter how brilliant the code is.

Mistake #5: Confusing Traction with Vanity Metrics

It’s easy to get distracted by GitHub stars, Hacker News traffic, or beta signups. But those don’t pay the bills. Real traction means people are paying for your software — or at the very least, using it regularly in a way that changes their behavior.

Focus on metrics that matter: retention, paid conversions, churn. Everything else is noise.

Don’t Let the Same Mistakes Kill Your Momentum

The good news? These mistakes are avoidable — if you’re honest about what you’re building and intentional about how you bring it to market. Don’t waste months perfecting a product no one needs. Don’t mistake attention for revenue. And don’t assume that just because it works, it will sell.

Your First Dollar: Tactics for Early Revenue (Before You Scale)

Let’s be honest — making one dollar from software is often harder than making a thousand later. That first dollar means someone, somewhere, sees enough value in your product to open their wallet. It’s proof of concept, signal over noise, and the difference between a project and a business.

So how do you get that first real customer when your software is still scrappy, half-done, or even held together with duct tape? Here are practical, low-friction tactics to validate your idea with actual revenue.

Start With Pre-Sales (Yes, Even Before You Finish the Product)

Don’t wait until it’s perfect. If you’ve clearly defined the problem you’re solving and you’ve talked to real people who experience it — offer them early access. This could mean a discounted subscription, a one-time license, or even a simple Stripe payment link in a Google Doc.

You’re not just raising money — you’re validating that the thing you’re building is worth paying for.

Sell the Service First, Then Productize

In many cases, the software you’re planning to sell is automating something people already pay for as a service. So flip the model: offer to do it manually, with or without the code, then build the software around what actually works.

Let’s say you’ve built a tool that generates SEO reports. Try selling a few audits manually. Once you understand what clients really want in those reports, you’ll know exactly what to automate — and you’ll already have paying users.

This service-to-product path is often the most direct line to revenue.

Launch on No-Code Marketplaces

You don’t need a polished SaaS with a custom dashboard to start selling. Tools like Gumroad, LemonSqueezy, or even Notion can serve as a landing page, a store, and a basic billing platform.

This is especially effective for small developer tools, scripts, templates, or internal-use apps. Instead of building a billing system, borrow someone else’s and focus on getting paid.

Try a Premium Beta (Yes, People Pay for Unfinished Products)

If early users are excited about your tool, they might be willing to pay to be part of the beta — especially if it includes access to you, priority support, or a lifetime deal. The key is transparency: you’re offering something valuable, but unfinished, with the promise that they get to shape its direction.

This kind of early validation is more than just cash flow. It gives you a feedback loop — one that’s far more useful than whatever comments you’ll get from Reddit or Twitter.

Don’t Discount Paid Support

If you’ve released a free or open-source version of your software and people are using it — offer to help. Paid onboarding, support, customization, or implementation services are all valid ways to generate early revenue and understand your users better.

This approach works especially well with technical tools and developer-centric products.

The Goal Is Progress, Not Perfection

Early revenue isn’t about maximizing profits — it’s about finding momentum. You’re trying to answer the question: Will anyone pay for this? And the best way to find out is to ask.

If your answer is still “no” after trying these tactics, it doesn’t mean the end — it just means the product may need repositioning, or your market might need to be narrower.

Stay, Pivot, or Quit? How to Know If Your Software Has a Future

So, you’ve launched something. Maybe you made your first few sales, got on some users’ radar, and even pushed out a few updates. But now the momentum is slowing. You’re stuck in between — not failing, but not growing either.

This is one of the most difficult stages in a software journey. You’re deep enough to have sunk time and emotion into the project, but not far enough to know if it will ever truly pay off.

The question now is: do you double down, shift direction, or walk away?

How to Tell If You’re Stuck or Just Early

First, let’s make one thing clear: slow growth doesn’t always mean failure. Many profitable software businesses start small, grow quietly, and only hit their stride months (or even years) later. The key is knowing what kind of signals to look for.

Healthy early-stage software tends to show one or more of these signs:

• A small group of users who stick around and use it regularly
• At least a few people who are willing to pay , even if it’s not your ideal price
• Feedback loops: questions, feature requests, even complaints (silence is worse)
• Some form of organic word-of-mouth — even if it’s just a couple of tweets

If you’re seeing these signs, you might be on the right track. What you probably need is focus, iteration, and better marketing — not a pivot.

When It’s Time to Pivot

Sometimes, the core of your product works — but the audience is wrong, the use case is off, or the positioning just doesn’t click.

This is where pivoting makes sense. You’re not throwing away your work — you’re reframing it. For example:

• A social media tool becomes a B2B LinkedIn automation app
• An AI text generator becomes a productivity tool for recruiters
• A client reporting dashboard turns into a white-label product for agencies

Pivoting requires honesty and some uncomfortable questions. Are people confused about what it does? Is your messaging attracting the wrong audience? Are you solving a problem no one wants solved in this way?

One way to explore this is by reading What to Do If Your SaaS Stopped Making Money, which walks through what stagnation often looks like — and what to do about it.

When to Walk Away (Yes, It’s Okay)

Not every software project needs to become a business. Sometimes, it was a learning experience, a portfolio piece, or a step toward something else. If you’ve tested monetization tactics, talked to users, refined your product — and still feel like you’re pushing a rock uphill — it might be time to stop.

Letting go isn’t failure. It’s making space to build something better with everything you’ve learned.

Just make sure you’re quitting for the right reason — because the model doesn’t work, not because growth didn’t happen fast enough.

It’s a Journey, Not a Launch Event

Making money from software isn’t a straight line. It’s a process of defining what you’ve built, testing value, trying monetization models, listening to users, and adjusting course as needed.

This article distills hard-earned lessons — both from the industry and from our own experience at LaSoft — into a practical framework for turning code into revenue. Not just to earn your first dollar, but to build something that keeps delivering value long after launch.