Few entrepreneurs launch a startup without hoping to earn a little revenue — or a lot, let’s be honest — from the venture. But there are dozens of ways to earn money, and the best method is different for every business. Startups in particular have it tough. Because they’re trying to blaze a new trail or disrupt an older model, they don’t have a blueprint to follow already. And often, just one revenue model won’t do the trick: You may need to diversify.
Here’s a look at the three design principles that entrepreneurs can rely on in order to figure out their own unique revenue model.
Image: The Human Centered Design Toolkit
The Principles
Your business model must be desirable, viable, and feasible. To find out if it is, ask yourself three questions: Do people want it? Can it make money? Can I build it?
Applied to your revenue model, these three principles will help you start with a service, product or even just an area of expertise, and then layer a source of revenue on top of it. The principles, and the above chart explaining them, come from IDEO.org, a nonprofit design organization with a mission to “improve the lives of poor and vulnerable communities through design.” You can check out a free PDF of their Design Toolkit in order to learn more.
The Revenue Models
But chances are strong that you’ll need a little more guidance in order to figure out how to accurately determine how these principles apply to your business. For that, I’d suggest starting with a master list of different revenue models that could supplement those who simply sell a single product or service. Here’s the short list:
- Advertising
- Events
- Merchandise
- Memberships
- Premium Content
- Consulting
- E-Books
- Paywalls
- Philanthropy
And here’s a Medium post that breaks this list down into a total of 52 different revenue models while providing a successful example for each. While this article explores the industry of journalism, it can easily be applied to any startup that has a wealth of knowledge about a specific industry or has garnered a highly engaged niche audience of users. In 2017, more revenue streams are available: Don’t stop at one.