Business Models & Monetization

Step 1 (optional): Review this video (see credits below).

Step 2: Listen to or read the key points.

Step 3: Reflect then let’s talk!

First which business models resonate:

There are nine business models associated with nearly every billion-dollar company. These models are:

• SaaS (Software as a Service)

• Transactional businesses (facilitate transactions and take a cut)

• Marketplaces (facilitate transactions between buyers and sellers)

• Hard tech businesses

• Usage-based businesses

• Enterprise

• Advertising

• E-commerce

• Bio

To consider:

• SAS businesses make up 31% of the top startups companies

• Transactional businesses make up 22%

• Marketplaces make up 14%

• The top companies by value tend to be marketplaces or transactional businesses

Next consider pricing strategies:

Here are five key pricing insights:

• You should charge for your product: This helps you learn more about your customers and product value.

• Price on value, not on cost: Charge based on the value your product delivers to the customer.

• Most startups are undercharging: Don't be afraid to raise your prices as you learn more about your product's value.

• Pricing isn't permanent: You can change your pricing strategy over time.

• Keep it simple: Don't add complexity to your pricing structure.

_{^{Credits: Many thanks to Y Combinator for the video material used on this page! We wrote the summaries and added specific tid-bits for our readers and listeners. Y Combinator produced and owns this video. We are consumers of the wonderful founder resources and networking opportunities at Y Combinator but have no affiliation.}}

Questions to Discuss as a Team:

1. Which of these business models resonates with your business?

2. Of the the 5 pricing insights what are you NOT doing?

3. What value does your product bring to the customer?