AI apps often spend more on user acquisition than they earn.
• Many AI apps are spending more on user acquisition than they earn in revenue. • Strategies like ads, influencer marketing, and hackathons contribute to high costs without guaranteed returns. • The key to survival lies in building a loyal community rather than just chasing rapid growth.
1. Startup Founder 2. Marketing Manager 3. Product Development Lead
8 min
What if I told you most AI apps are burning more cash than they make?
Yes, revenue charts look great—spikes everywhere, usage at all-time highs.
But the cost of getting those users? Brutal.
Ads.
Obvious. Ruthless. Especially in competitive niches like vibe coding or text-to-image/video/voice.
Everyone’s fighting for that top Google slot—or worse, to be your AI model’s default recommendation.
Reddit Ads and Product Hunt Ads might sound clever, but they’re just a different flavor of expensive.
High spend, maybe high return.
Influencers.
Those “this tool changed my workflow” videos? Paid for.
The real game is when they ask you to be part of it—and ask for a check.
That’s brand gravity.
It’s not UGC—it’s content marketing in disguise.
Affiliates.
Influencers with recurring revenue.
You pay them to promote, then pay again when their audience converts. Lenny’s newsletter locking down all vibe coding tools is a perfect example. Smart, yes—but also a loop that never ends. Welcome to influencer capitalism 1.1.
Hackathons.
Events = community, cool. But if you sponsor them, and people use your app (and rack up LLM costs), you're paying twice.
Sponsorship + infra.
Best-case? You're the tool everyone builds with—for a weekend. Then what? Bolt’s hackathon is a monster—cool flex, sure. But how long does that buzz will last?
LLM cost itself.
Don’t forget: every prompt has a price.
Lovable nailed it—host a model battle, free access for a weekend, create noise and give value. Smart move. Expensive for the models, free for them.
Referrals.
Great if your brand is strong—or your product feels exclusive.
But if you're offering discounts to friends, family, or early users while already running on razor-thin margins (thanks, LLM costs)... you're bleeding.
That margin? It’s the last thing keeping you alive. Don’t trade it for vanity growth.
Churn.
Users jump ship fast—new tools, new features, new hype.
Shipping non-stop just to keep their attention is expensive.
Trying to win back ghosted users? Even worse.
You're bleeding dev time and marketing dollars… for people who’ll leave the second something shinier shows up.
At what cost? Probably too much.
Acquisition.
Can’t beat them? Buy them.
It’s the classic move when internal teams can’t keep up. So you scoop up a good-enough player riding the wave. Wix with Base22. OpenAI with Windsurf. Happens more than you think.
It’s not about buying the best—it’s about not falling behind.
It’s not always full rainbows.
That being said—
the real power right now is community.
Word of mouth. People who stay through the hype and the silence.
Believers who bring others in without being asked.
The AI war is on. Everyone’s buying attention.
So yeah—do what you need to do.
Raise early to go far. Or get bought trying.
It’s messy.
It’s fast.
It’s real.