We plan to bring eChai across 100 cities in India. It starts with eChai Startup Demo Day on 26 September, all in person. 11 cities confirmed, 327 founders registered. Any city that reaches 20 interested founders is on too. See your city
Money, pricing & model

What's the difference between SaaS, marketplace, and transactional business models?

SaaS = you rent software for recurring fees (predictable, high margin, sticky). Marketplace = you connect buyers and sellers and take a cut (huge upside, brutal cold-start problem). Transactional = you make money per transaction or unit sold (simple, but you re-earn every customer each time). Pick the one whose hardest problem you're actually excited to solve.

Go deeper

3 resources, 2 link-checked.

📄 Article
✓ Link checked Free Beginner

YC's Startup Library is the canonical, no-fluff reference on how startups actually make money, curated from partners who've seen thousands of companies. It cuts through business-model jargon with practical framing founders can apply immediately.

Business Models & Metrics, Y Combinator Startup Library

From ycombinator.com by Y Combinator browsable library

  • Recurring-revenue models are more defensible than one-time transactional ones
  • The best model is usually an existing proven model with one thing dramatically improved
  • Who pays, how often, and whether revenue compounds matters more than the model's label
Open ycombinator.com
📄 Article
✓ Link checked Freemium Intermediate

Lenny's Newsletter is the most trusted operator-written resource on product, growth, and monetization, drawing on data from hundreds of companies. It's specific and tactical where most business-model writing is generic.

Lenny's Newsletter, Growth, Business Models & Monetization

From lennysnewsletter.com by Lenny Rachitsky newsletter archive

  • Match your monetization model to how customers already buy in your category
  • Freemium is a growth engine only if free users convert at a meaningful rate
  • B2B vs B2C is a fundamental fork that changes sales, pricing, and funding needs
Open lennysnewsletter.com
📄 Article
Free Intermediate

A16z is the definitive source on marketplace and network-effect business models, having funded and studied more of them than anyone. Their writing explains take rates, liquidity, and the cold-start problem with real rigor.

All About Network Effects & Marketplaces

From a16z.com by Andreessen Horowitz (a16z) long-form article

  • Marketplace revenue is GMV multiplied by take rate, both must be healthy
  • Solve the chicken-and-egg problem by going extremely narrow first
  • Liquidity, not raw scale, is what makes a marketplace valuable early on
Open a16z.com

Terms in this answer

People also ask

Also in D2C

The same ground, over in Money, pricing & unit economics, our D2C track.

Also in How Founders Use AI

How founders actually use AI for this, over in Finance & Accounting.

Also in GTM

The same ground, over in Close deals and price right, our GTM track.

Also in Wealth

The same ground, over in Founder money foundations, our Wealth track.

eChai Partner Brands