Determine Your Revenue Model

There are a few types of revenue models you can use as an example for your revenue streams:

  • Asset Sale - sale of the ownership right to a physical product (example: buying a car)
  • Usage Fee - fee is proportional to the usage of service (example: cellphone service or database hosting)
  • Subscription Fee - fee for a continuous access to a service (example: SaaS products)
  • Renting - fee for a temporary access to a good or service (example: renting a car)
  • Licensing - fee for use of some Intellectual Property (IP) (example: software)
  • Intermediation Fee - often found in marketplaces of various types, a fee for bringing together two or more parties involved in a transaction (example: online marketplace sites like Airbnb)
  • Advertising - fee paid by brands and companies to get in front of potential customers (example: Google, Facebook)


Each revenue stream may different pricing tactics. Once you've figured out the revenue stream, there are two types of pricing: Fixed pricing and dynamic pricing.

Fixed pricing is based on 3 elements:
- the cost of production + a set markup
- value priced (based on customer segment or features)
- volume priced

Dynamic pricing is based on 3 elements:
- negotiation
- yield management (best example are seats on a plane closer to take off)
- real-time markets (auctions or marketplaces with time sensitive goods)