I've played as Gotland severals times as a Merchant Republic, it's quite workable - but it's not really very good. Ostlandet or Switjod are both stronger duchies to control, they have more land and thus more troops to use for your raiding. The difference between having one stack of troops and three to four stacks of troops out in your boats is massive. You can easily boost Germanic Moral Authority with two to three 1000 stacks raiding in Ireland and if you are just skipping the top unprotected loot you can make a lot more money much faster by hitting multiple counties at a time.
For your early game you want to go into the character finder and find unmarried Germanic women with high intrigue scores. Take them as concubines and use the best one as a spymaster. Send her to study tech in Constantinople, or the province to the Northwest of it. Now, while you hope for a few lucky tech pings take the business focus and wait for the debased coins event, take the gold. Preferably this one will fire a couple times for you so that you can stockpile both money and prestige from it - even if you get the negative followup event it's worth it.
Once you've got about 200g you can switch to Scholarship and study how the stars move. From there save all your tech points till the end and dump them into shipbuilding. At that point you build your shipyard and wait for your boats to be built so that you can start raiding ASAP. When the Viking Age hits you'll have a 3 shipbuilding and be able to field an absurd number of (expensive) boats.
During the early waiting period you should just join everyone's wars in Scandinavia to prevent prestige loss from peace, or raid a neighbor for one day, that takes care of the issue.
I tend to sit my chancellor in Switjod to improve relation with Sigurd Ring, but your nearest powerful neighbor is a good choice.
From that point you just stockpile gold and sons, while upgrading your coastal holdings. I've read some people suggesting that you shouldn't bother upgrading certain buildings in your holdings outside the primary - beyond Weaponsmith which only functions in your capital as a Merchant Republic. It might not really be worth it to dump gold into the hillfort, since it only converts to walls 2 and costs a lot of gold. If you want to switch to a Republic early on, then I'd suggest stockpiling about 10k gold and getting your Trade technology up as high as you can. If you're going to wait a while, then there's no reason not to take as much as 20k with you.
Now it's time to switch over. This is the same format as other people have recommended, take a Christian or Sunni concubine and flip the Republic switch. But the one thing you must do before that is hold all of the land in your realm personally. Hold every single county so that they flip to cities as well, instead of becoming feudal lords later. Feudal lords will always dislike you, but the mayors you drop into office will never complain.
In my most recent un-reformed MR game I discovered to my great future displeasure that I had not stockpiled the proper amount of piety to switch back from Ibadi. I ended up with a Republic with a mixture of Germanic and Ibadi houses. It caused a lot of problems in the long run. The other AI rulers didn't give a damn about the Germanics, but France immediately holy warred us for Jylland any time I had a mishap and a Muslim took the throne. I also had Sweden disintegrate and cease to exist in that game. It was very weird.