Overview
You just hypothesized a solution to solve your customers’ problems. Now it’s time to hypothesize a sustainable way to fund the development and delivery of that solution. In other words, it’s time to hypothesize your revenue model.
A revenue model is simply the way an organization makes money. Your revenue model, combined with your pricing strategy, will make up the Revenue Streams section of your Business Model Canvas.
Without a revenue model, your business can generate costs that can make it unsustainable. This class will help you answer some important questions like:
How can or cannot my business generate revenue?
How can I determine crucial factors that can help my business thrive and grow?
Here below are some of the main definitions that can help you understand what is/isn’t a revenue model:
A revenue stream is a company’s single source of revenue. A company can have zero or many revenue streams, depending on its size.
A revenue model is the strategy of managing a company’s revenue streams and the resources required for each revenue stream.
A business model is the structure comprised of all aspects of a company, including revenue model and revenue streams, and describes how they all work together.
Step 1 The Matching Game
This first step is to match each one of the following examples of businesses with one Revenue Model card.
Don’t worry about getting it right the first time. This is a learning experience and you won’t be graded on how well you did the first time.
You can always change your mind. Do your best and have fun!
Facebook it’s a social media network that lets its 2+ billion users worldwide connect with their friends, family and others. Facebook offers its services mostly for free to its users and then makes money predominantly by showing ads from advertisers within its platform.
That means that people who use Facebook services (users) are not the ones paying Facebook for it. Real customers are primarily small businesses advertising on some of Facebook’s family of apps.
According to this description, what is the Facebook’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Printful
Printful is an on-demand printing and fulfillment company that helps to turn ideas into brands and products. Printful is one of the most popular dropship service providers to sell accessories, homeware, and apparel.
For instance, Printful can create a t-shirt with your logo and branding on the label so that customers think you manufactured the t-shirt yourself.
According to this description, what is the Printful’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Netflix
Netflix is one of the world’s most successful streaming services bringing television, documentaries, and movies to millions of people around the world. Netflix acquires, licenses, and produces content including original content.
Its 200+ million paying members can watch Netflix on their smartphone, tablet, Smart TV, laptop, or streaming device, to stream or download tv shows, documentaries, and movies 24/7 for one fixed monthly fee.
According to this description, what is the Netflix’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Hertz
The Hertz Corporation is one of the largest worldwide vehicle rental companies by sales, locations, and fleet size, Hertz operates in 160 countries in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East and New Zealand.
According to this description, what is the Hertz’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Airbnb
Airbnb operates an online marketplace that connects travellers seeking affordable lodgings with hosts who offer their properties as short-term rentals.
Airbnb charges renters a nonrefundable service fee based on the listing. Hosts are also charged a fee for every completed booking.
According to this description, what is the Airbnb’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Apple
Apple Inc. is a multinational technology company that specializes in consumer electronics, software and online services. Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The Company’s products include iPhone, Mac, iPad, and Wearables, Home and Accessories. iPhone is the Company’s line of smartphones based on its iOS operating system.
Apple sells smartphones, personal computers, tablets, wearables and accessories, and services. iPhones are Apple’s biggest source of revenue by product, and the Americas is its largest revenue generator among its geographic regions.
According to this description, what is the Apple’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Wikipedia
Wikipedia is an online encyclopedia that (nearly) anyone can contribute to and edit. Wikipedia has evolved into one of the most visited websites on the Internet since it was established in 2001. There have been nearly 56 million articles published so far on Wikipedia. The information on Wikipedia is collected, updated, and maintained by unpaid volunteers instead of its employees and external field specialists.
The Wikimedia Foundation, a non-profit organization that is funded by donations, owns and manages the site. Wikimedia Foundation operated Wikipedia, funded primarily by donations and contributions totaling $98 million in 2018. Wikipedia earns money through donations that means it is funded by its readers and has no commercial source of income.
According to this description, what is the Wikipedia’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
Pacific Gas and Electric
Pacific Gas and Electric Company is engaged in the sale and delivery of electricity and natural gas. The Company generates electricity and provides electricity transmission, and distribution services across northern and central California. The Company offers its services to residential, commercial, industrial and agricultural customers.
The bills of gas and electricity are calculated based on the energy that is consumed.
According to this description, what is the Pacific Gas and Electric’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
PatientsLikeMe
PatientsLikeMe is the world’s largest integrated community, health management, and real-world data platform. Through PatientsLikeMe, people with over 2,900 conditions share personal stories and information about their health, symptoms, and treatments, with a goal to improve the lives of all patients through knowledge derived from shared real-world experiences and outcomes. Data generated by patients themselves are systemically collected and quantified while also providing an environment for peer support and learning. These data capture the complex temporality and competing influences of different lifestyle choices, socio-demographics, conditions, and treatments on a person’s health.
PatientsLikeMe takes the information patients share about their experience with the disease, and sell it in a de-identified, aggregated and individual format to our partners (i.e., companies that are developing or selling products to patients).
According to this description, what is the PatientsLikeMe’s revenue model? Click and select one of the following cards.
payments
One-Time Payment
Selling a good or service via a single transaction.
newspaper
Advertising
Selling the right (Eg: Ad space) to promote another organization’s products or services to your customers.
loop
Subscription
Selling non-exclusive access to a good or service for a given period of time typically repeating until canceled.
card_giftcard
Donation
Money given voluntarily by those wishing to support the mission of your organization as donations or pay-what-you-want.
speed
Usage
Selling access to a good or service based on the amount of that good/service used.
incomplete_circle
Commission
Revenue generated in exchange for facilitating a transaction between two parties.
timelapse
Rent
Selling exclusive access to a good or service for a given period of time.
insert_chart
Data Reselling
Selling information about your customers.
label_off
White Label
Selling permission for someone else to sell a product you’ve created, with their name/brand on it.
COLLAPSE expand_less
lock
Content Blocked
To unlock this content, make sure you have answered all the previous questions and followed all the instructions correctly.
Hint:
Please select one revenue model card for each one of the previous business examples. You didn’t pick a card for the followings:
Printful
Netflix
Hertz
Airbnb
Apple
Wikipedia
Pacific Gas and Electric
PatientsLikeMe
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