Benjamin Yoskovitz

In the same way, a business model is a combination of things. It’s what you sell, how you deliver it, how you acquire customers, and how you make money from them.

You can build business models this way, but instead of heads, torsos, and feet, you have several aspects of a business: the acquisition channel, selling tactic, revenue source, product type, and delivery model.

The acquisition channel is how people find out about you.
The selling tactic is how you convince visitors to become users or users to become customers. Generally, you either ask for money or you provide some kind of scarcity or exclusivity—such as a time limit, a capacity limit, the removal of ads, additional functionality, or the desire to keep things to themselves—to convince them to act.
The revenue source is simply how you make money. Money can come from your customers directly (through a payment) or indirectly (through advertising, referrals, analysis of their behavior, content creation, and so on). It can include transactions, subscriptions, consumption-based billing charges, ad revenue, resale of data, donations, and much more.
The product type is what value your business offers in return for the revenue.
The delivery model is how you get your product to the customer.

Backupify was good at focusing on a specific metric at a specific stage, in order to grow the company. “Initially, we focused on site visitors, because we just wanted to get people to our site,” said CEO and co-founder Robert May. “Then we focused on trials, because we needed people testing out our product.”
Once Backupify had people trialing the product in sufficient numbers, Robert focused on signups (conversions from free trial to paying customer). Now, the primary focus is monthly recurring revenue (MRR).

ou can build business models this way, but instead of heads, torsos, and feet, you have several aspects of a business: the acquisition channel, selling tactic, revenue source, product type, and delivery model.

The acquisition channel is how people find out about you.

The selling tactic is how you convince visitors to become users or users to become customers. Generally, you either ask for money or you provide some kind of scarcity or exclusivity—such as a time limit, a capacity limit, the removal of ads, additional functionality, or the desire to keep things to themselves—to convince them to act.

The revenue source is simply how you make money. Money can come from your customers directly (through a payment) or indirectly (through advertising, referrals, analysis of their behavior, content creation, and so on). It can include transactions, subscriptions, consumption-based billing charges, ad revenue, resale of data, donations, and much more.

The product type is what value your business offers in return for the revenue.

The delivery model is how you get your product to the customer.

Kevin Hillstrom of Mine That Data

means tracking additional metrics for the rate of payment expiration, the effectiveness of renewal campaigns, and the factors that help (or hinder) renewal rates. These metrics matter later on as you’re working to reduce churn, but as the total number of loyal users grows, renewal revenue represents a significant portion of total revenue.

offer a tiered model of their service, where the monthly fee varies depending on some dimension of the application.

Many SaaS providers offer a tiered model of their service, where the monthly fee varies depending on some dimension of the application

can jump back to Chapter 9 to learn more about SaaS metrics, or you can skip to Chapter 14 to find out how the stage of your business drives the metrics that matter to you.