Types of business models

A reader question about business model types prompts this issue, which the author notes was hard to find summarized anywhere. It lays out eight core ways businesses make money, such as selling a thing, renting, taking a cut, subscriptions, usage-based pricing, services, advertising, and percentage of assets. It then covers how to innovate by combining or replacing models, with a short bonus list of creator-economy models.

01Key takeaways

• Most businesses earn revenue through one of eight core models, each tied to a distinct optimization lever.
• Each model suits different product types, so match the model to how customers actually use and value the product.
• Combining two models, such as a product sale plus a subscription, can unlock new revenue streams.
• Replacing a model, like moving from one-time sales to subscriptions or take rates, can significantly improve unit economics.
• Creators can monetize through subscriptions, tips, advertising, sponsorships, goods, access, and courses.

02Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.