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Apr 10, 2020

What is a business model

A startup has a wide range of payment and incentive models from which to choose: freemium, free trial, pay up-front, discount, ad-funded, and so on. The choice needs to match the kind of segmentation you’re doing.

Also, not all users are good, instead of counting all users, optimize for good customers and segment your activities based on the kinds of customers those activities attract.

A business model is a combination of things. It’s what you sell, how you deliver it, how you acquire customers, and how you make money from them. Many people blur these dimensions of a business model.

Freemium isn’t a business model—it’s a marketing tactic.
SaaS isn’t a business model—it’s a way of delivering software.
The ads on a media site aren’t a business model—they’re a way of collecting revenue.

This is all what constitutes a business model:

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