Should you ever start a company without a monetization plan?

Does numbers of users / visitors trump everything else including a monetization plan? Take funny pictures as an example, those type of sites can easily garner 100K+ visitors a month quickly. But monetizing that sort of traffic is hard. Average CPC and CPM rates are very low.

You should have some kind of a monetization plan, even if you don't plan to implement it from day one. We all see sites/apps that don't monetize their product yet, often because they are focusing on either growth or learning (e.g. how users interact with a free app). Freemium model isn't popular, but it's not dead either.

When you build/have a large audience, monetization becomes easier at scale. Andrew Chen covers this topic in his popular post Stop asking “But how will they make money?”.

In the case of a funny picture site lets consider the famous - Cheeseburger Inc. added new sites after ICanHaZCheezBurger success and grew to a network of sites/blogs with 20+ millions of unique visitors per month. Cross-selling and up-selling is a common way to grow once an audience is established.

If your audience is someone's valuable target customer group, you can negotiate premium rates for advertising and sell your ad space (and sponsorships) directly to advertisers, instead of using ad networks like Google AdSense that take a big cut of what advertisers are paying. When selling directly, $5 CPM is common, but for certain audience groups and a good advertiser match, rates in the range of $5-20 are totally possible.

Short answer: No. Always have a monetization plan.

Long answer: No, but if you have the clout to raise significant funding, then you may be able to get away without a clear monetization plan because you and your investors believe you have the ability to grow extremely quickly.

However, if you ask anyone who has done this, chances are they will tell you they still had some idea of monetization in their heads - because without that, investors (who are ultimately after an ROI) would pass on this investment.

If you do not have that kind of clout, then you will need a credible monetization plan if you plan on seeking funding.

And if you don't want outside capital, then you will need a monetization plan anyways.

Growth vs Revenue

I should add that this is not the same as focus. There are startups that don't focus on monetization right away. They are aiming for fast growth, with the hopes that they can capture enough market share to monetize later on. That doesn't mean they completely ignore a path to revenue though. It just means monetization is not their immediate focus.

Those kinds of companies tend to require funding, since it can take time to build the right, fast-growth product.