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Business Models

Business Models

The recurring patterns for how companies actually make money — each explained with how it works, where you see it, and when it wins or fails. New patterns publish regularly.

12 models
Platform
Advertising-Supported

Give the product away to users; sell their attention to advertisers.

Retail
Direct-to-Consumer

Skip the middlemen — sell straight to customers and own the relationship.

Scaling
Franchising

Let others fund and run your outlets while you sell them the brand and system.

Recurring revenue
Freemium

Give the core away free to millions; charge the few who want more.

Scaling
Licensing

Own the intellectual property; let others pay to use it.

Retail
Loss Leader

Sell one thing at a loss to pull customers in and profit on everything else.

Platform
Marketplace

Don't sell the product — connect the buyers and sellers, and take a cut.

Recurring revenue
Membership

Sell the right to belong; earn from the fee, not the transaction.

Platform
Platform Ecosystem

Build the stage others perform on, and take a share of everything they create.

Lock-in
Razor and Blades

Sell the durable device cheap; make your money on the consumables it needs.

Recurring revenue
Subscription

Charge a recurring fee for ongoing access instead of a one-time price for ownership.

Recurring revenue
Usage-Based

Charge for exactly what customers consume — pay as you go.