Revenue streams and business models of startups…

Simply put, a business model is about who will pay, how much, at what periodicity and to whom. Revenue stream is about what they will pay for.

E.g. if you are selling math practice solutions, your business model could be as follows:

“We have a B2B2C model. We will charge parents Rs.250 per child per month. The school will collect this from parents who subscribe to our service and will be paid to us at the beginning of every quarter. Students will be pre-registered but subscription is not compulsory and parents can choose to opt out. School will keep 20% of total revenues, which we will give them at the end of the year on achieving a pre-agreed minimum revenue commitment.”

For the same product, there could be a different business model e.g.

“We have a B2C model. We will charge parents Rs.250 per child per month, which they pay to us in advance at the beginning of the month.”

Businesses can explore different business models e.g.

  • B2B (e.g. in the above example, selling to schools)
  • B2C (e.g. in the above examples, selling directly to parents)
  • B2B2C (e.g. in the above example, selling to parents through schools)
  • Free/subsidized for users – other stakeholders pay (e.g. ad supported products/services)
  • SAAS – pay only for service / rental
  • Pay per use
  • Pay up front
  • Annual / periodic payments
  • Pay in instalments

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