Business Model

How a company creates, delivers, and captures value: what it sells, to whom, how it makes money, and what it costs to deliver. The logic of how the business works as a business.

Why it matters

A great product with a broken business model still fails. Being clear on how you actually make money, and whether the numbers can work at scale, is as fundamental as building the product itself.

For example

A newspaper that once sold copies now makes most of its money from subscriptions and events, a shift in business model, not product.

Go deeper

Pricing Determines Your Business Model A Smart Bear · article A sharp argument that how you charge, not just what you build, is what really defines the business you are in. Open longform.asmartbear.com →

The Unprofitable SaaS Business Model Trap A Smart Bear · article How a SaaS model that looks healthy can quietly never turn a profit, and the math founders miss until it is too late. Open blog.asmartbear.com →

Nine Business Models and the Metrics Investors Want Y Combinator · video A tour of the common business models and the two or three metrics that actually matter for each one. Watch on YouTube youtube.com →

Related terms

Also in Starting Up

See how founders actually handle this on Growing and marketing, part of the Starting Up hub.

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