Business model

How the company creates value and captures some of it as revenue.

Example

Per-seat subscription, transaction fee, marketplace commission, usage-based, licence.

Important

The model shapes everything downstream — sales motion, margin, funding needs. Changing it later is close to changing companies.

Related terms

• Pricing — What you charge, how you charge it, and how the tiers are structured.
• Gross margin — Revenue minus the direct cost of delivering it, as a percentage of revenue.
• Unit economics — The profit or loss on a single customer, once you strip out fixed costs.
• Freemium — A permanently free tier alongside paid plans, where the free tier drives adoption.

Lessons that explain it

• Business models — Subscription, transaction, marketplace, usage, licence. The model shapes your margin, your sales motion and how much money you need. (12 min)
• The pitch deck — Ten to twelve slides whose only job is to get the next meeting. Not to close the round. (12 min)

All 176 terms in the Founder glossary