How to Create Your Business Model

Design a sustainable business model for your startup. Learn about revenue streams, pricing strategies, and unit economics.

Intermediate Level
3 minutes read
6 steps
1

Define Your Value Proposition

Clearly articulate what value you create for customers. This is the foundation of your business model. Why will customers pay for your solution?

Pro Tip
Strong value propositions solve painful problems or create significant gains.
Related AI Agent: Business Model
2

Choose Your Revenue Model

Decide how you'll make money: subscriptions, transactions, advertising, licensing, etc. Consider what model aligns best with your value delivery.

Pro Tip
The best revenue models align your incentives with customer success.
Related AI Agent: Monetization Strategy
3

Set Your Pricing Strategy

Determine how to price your product. Consider cost-plus, value-based, or competitive pricing. Test different price points.

Pro Tip
Most startups underprice. If no one complains, your price is probably too low.
Related AI Agent: Monetization Strategy
4

Calculate Unit Economics

Understand your Customer Acquisition Cost (CAC) and Lifetime Value (LTV). Aim for LTV:CAC of 3:1 or higher for a sustainable business.

Pro Tip
Unit economics matter more than growth rate for long-term success.
Related AI Agent: Business Model
5

Map Your Cost Structure

Identify all costs: fixed costs, variable costs, and how they scale with growth. Understand your path to profitability.

Pro Tip
Keep fixed costs low until you've validated product-market fit.
Related AI Agent: Business Model
6

Plan for Scale

Consider how your business model will work at 10x and 100x your current size. Identify potential bottlenecks and economies of scale.

Pro Tip
The best business models get more profitable as they scale.
Related AI Agent: Funding Advisor

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