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Money, pricing & model

Business models explained

How the money actually flows.

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How do I make money from a free product or freemium model? Freemium only works if free users become a growth engine and a clear slice of them hit a wall they'll pay to remove. Give away what's cheap to serv... Intermediate 3 resources → How does a marketplace actually make money and solve the chicken-and-egg problem? Marketplaces earn a take rate (a % of each transaction), so your revenue is GMV times take rate, get both wrong and you have nothing. Solve the col... Intermediate 3 resources → What's the difference between gross margin and contribution margin, and which one should I obsess over? Gross margin is revenue minus the direct cost of making the thing; contribution margin subtracts the variable cost of each additional sale, which f... Intermediate 3 resources → How do I model a business that sells to enterprises with long sales cycles and few big deals? Enterprise models trade volume for deal size, so your math is driven by average contract value, win rate, and how many months a deal takes to close... Advanced 3 resources → How do I decide whether to add a services layer to my product business, and will investors hate it? Services can be smart early: they fund you, teach you what customers really need, and open doors that pure product can't. The catch is margin and s... Advanced 3 resources → What does 'take rate' mean and how do I set the right one without scaring off my users? Take rate is the cut you keep from each transaction flowing through your platform, and it's the single biggest lever in a marketplace or payments m... Advanced 3 resources →
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