Eight ways to make money:
1. Sell a thing
2. Rent a thing
3. Take a cut
4. Charge a subscription
5. Charge based on usage
6. Sell a service
7. Advertising
8. Charge on % of assets

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1/ Sell a thing: Sell someone your physical or digital product

• Examples: iPhone, lemonade, land, stocks
• Ideal for: Physical products you manufacture or acquire
• Optimize: Unit economics
• Business strategy: Make or acquire a thing —> Sell it for more than it cost you

2/ Rent a thing: Allow someone to borrow a product that you continue to own

• Examples: Apartments, rental car
• Ideal for: Physical products you manufacture or acquire that people don’t want (or can’t afford to) to own

• Optimize: Consumption
• Business strategy: Make or acquire a thing —> Rent it out over and over

3/ Take a cut: Charge a % for each transaction you facilitate

• Examples: Stripe, Airbnb, bookies
• Ideal for: Platforms and marketplaces
• Optimize: GMV
• Business strategy: Build a valuable platform or marketplace —> Charge a fee for the convenience of using it each time

4/ Charge a subscription: Charge a monthly/yearly fee for access to your product or service

• Examples: Figma, Netflix, gyms
• Ideal for: Products/services that people need regularly
• Business strategy: Build a valuable product —> Get people to try —> Get them to subscribe

• Optimize: Engagement
• Types of subscription models: Flat fee (e.g. Superhuman), Tiered plans (e.g. Notion), Per seat (e.g. Figma), Per host (e.g. Datadog, New Relic), Annual contracts (e.g. Oracle, gyms)

5/ Charge based on usage: Charge a fee only when people use the product

• Examples: Twilio, AWS, Metromile
• Ideal for: Infrastructure products
• Business strategy: Build a valuable product —> Get people to try it out at a small scale —> Get them hooked and scale with them

• Optimize: Consumption
• Types of usage-based models: One-off cost (e.g. Twilio), Per second usage cost (e.g. AWS EC2, S3), Per mile (e.g. Metromile)

6/ Sell a service: Provide a service leveraging your skills and experience

• Examples: Plumbers, engineers, health providers, tour guides
• Ideal for: Hands-on human help
• Optimize: Skillset
• Business strategy: Develop a skill —> Charge for leveraging that skill

7/ Advertising: Charge for sharing something with your audience based on views, clicks, or actions

• Examples: Facebook, TV
• Ideal for: Content
• Optimize: Traffic
• Business strategy: Build an audience —> Charge for access to your audience

8/ Percentage of assets: Charge a % of the assets you are managing or loaning
• Examples: Wealth advisors, loans, credit card companies
• Ideal for: Managing money
• Business strategy: Convince people to let you manage their money —> Make them money
• Optimize: AUM

9/ For much more, including examples of business model innovations, and inspiration for innovating on your own business model, check out the full post https://www.lennysnewsletter.com/p/types-of-business-models