Skill: jk-0001/revenue-model-design (version 0.1.0)

--- name: revenue-model-design description: Design a revenue model for a solopreneur business — how money flows in, from whom, and on what cadence. Use when deciding how to monetize a product or service, choosing between revenue streams, structuring recurring vs one-time income, or diversifying revenue. Covers all major revenue model types, selection criteria, revenue stream stacking, and the relationship between revenue model and product design. Trigger on "how will I make money", "revenue model", "monetization strategy", "revenue streams", "recurring revenue", "how to monetize", "business revenue model", "diversify income". --- # Revenue Model Design ## Overview A revenue model is not just "how much do I charge" — it is the complete system of how value translates into money. The wrong model can make a great product fail (people love it but won't pay the way you structured it). The right model turns a good product into a sustainable business. This playbook helps you choose, design, and validate the right model for your specific situation. --- ## Step 1: Understand the Revenue Model Landscape Know your options before choosing. Each model has different implications for cash flow, customer behavior, product design, and growth. ### Recurring Revenue Models Money comes in on a predictable schedule. The backbone of sustainable solopreneur businesses. **Subscription (monthly/annual):** Customer pays a fixed amount per period for ongoing access. - Pros: Predictable cash flow. Compounds over time. Customers amortize the cost mentally (feels cheaper than one-time). - Cons: Churn is constant. Must continuously deliver value or people cancel. - Best for: SaaS products, tools, services with ongoing value delivery. **Retainer:** Customer pays a fixed monthly fee for a defined scope of ongoing work or access. - Pros: Guaranteed income. Simplifies scoping conversations. - Cons: Can become a trap if the customer expects unlimited work within the retainer. - Best for: Consulting, managed services, ongoing advisory relationships. **Membership:** Customer pays to be part of a group that provides ongoing value (community, content, access). - Pros: Low churn if community is strong. Scales well. - Cons: Requires consistent content or community value delivery. - Best for: Courses + community, mastermind groups, niche professional networks. ### One-Time Revenue Models Single payments. Great for cash flow spikes, less predictable long-term. **Product sale:** Customer buys a product once and owns it. - Pros: No churn. Simple. High margin if digital. - Cons: Must constantly acquire new customers. No revenue compounds. - Best for: Digital products (templates, ebooks, courses without updates), software with perpetual licenses. **Service/project:** Customer pays for a defined deliverable. - Pros: High revenue per transaction. Flexible scope. - Cons: Time-capped. Must sell the next project constantly. No recurring base. - Best for: Consulting projects, freelance work, custom builds. ### Usage-Based Models Revenue scales with how much the customer actually uses the product. **Per-transaction:** Customer pays each time they complete an action (e.g., per invoice sent, per email sent). - Pros: Aligns cost with value received. Low barrier to entry. - Cons: Unpredictable revenue. Customers may cap usage to control costs. - Best for: Payment processing, marketplace platforms, API products. **Tiered usage:** Customer pays based on usage bands (e.g., up to 100 transactions = $X, up to 500 = $Y). - Pros: More predictable than pure per-transaction. Still usage-aligned. - Cons: Slightly more complex to communicate. - Best for: SaaS products where usage varies significantly between customers. ### Marketplace / Commission Models Revenue comes from facilitating a transaction between two parties. **Commission:** You take a percentage of each transaction on your platform. - Pros: Scales with the marketplace's GMV. Low upfront cost for users. - Cons: Requires two-sided network effects. Chicken-and-egg problem at launch. - Best for: Platforms connecting buyers and sellers. **Lead generation:** You send qualified leads to businesses and charge per lead or per conversion. - Pros: Scales well with content/SEO. - Cons: Dependent on advertiser budgets. Can be commoditized. - Best for: Content-heavy businesses in high-value verticals (finance, real estate, B2B services). --- ## Step 2: Match Model to Your Situation Answer these questions to narrow your options: | Question | If Yes → Lean Toward | |---|---| | Does my product deliver value continuously (not just once)? | Subscription or membership | | Is my product digital with near-zero marginal cost per user? | Subscription or one-time sale | | Do customers' usage levels vary wildly? | Usage-based or tiered usage | | Am I selling my time or expertise directly? | Retainer or project/service | | Do I need predictable monthly income? | Subscription or retainer | | Am I early and need to reduce purchase friction to get first customers? | Freemium (free tier) or usage-based | | Can I connect two groups who want to transact? | Marketplace or commission | --- ## Step 3: Design Your Revenue Stream Stack Most sustainable solopreneur businesses have 2-3 revenue streams, not one. A single stream is fragile — if it dips, everything dips. **Revenue stream stacking rules:** 1. **One primary stream (60-70% of revenue):** Your main product or service. This is where you focus growth efforts. 2. **One secondary stream (20-30%):** A complementary revenue source that serves the same customers or ecosystem. Often lower-effort or more passive. 3. **One opportunistic stream (5-10%):** Something that generates revenue when opportunity arises. Can be inconsistent. **Common solopreneur stack patterns:** | Primary | Secondary | Opportunistic | |---|---|---| | SaaS subscription | Digital course or template pack | Consulting/speaking | | Consulting retainers | Productized service (fixed scope, fixed price) | Affiliate revenue from tool recommendations | | Digital product (one-time) | Subscription upgrade (premium features or updates) | Freelance projects | | Content/newsletter | Sponsored posts or affiliate links | Workshops or cohorts | **Stack design rule:** Every stream should serve the same core customer or ecosystem. Revenue streams that pull you in different directions dilute your focus and brand. --- ## Step 4: Design the Payment Flow For each revenue stream, map the exact payment experience: ``` REVENUE STREAM: [name] MODEL: [subscription / one-time / usage / etc.] PRICE: [amount and cadence] PAYMENT TRIGGER: [what action causes the charge — signup, usage threshold, renewal] PAYMENT METHOD: [credit card, invoice, etc.] BILLING TOOL: [Stripe, Paddle, Lemon Squeezy, etc.] FREE TRIAL: [yes/no, length, requires card?] CANCELLATION FLOW: [how easy is it to cancel? — make this frictionless or you'll get chargebacks] UPGRADE PATH: [how does a customer move to a higher tier or add a stream?] ``` **Solopreneur billing tool recommendations:** - **Stripe** — most powerful, best developer experience, industry standard - **Paddle** — handles tax/VAT globally, good for digital products sold internationally - **Lemon Squeezy** — simpler than Stripe, good for digital products, handles EU VAT - **Gumroad** — simplest for one-time digital product sales --- ## Step 5: Model Your Revenue Projections For each stream, build a simple projection: ``` STREAM: [name] CUSTOMERS MONTH 1: [number] MONTHLY GROWTH RATE: [%] AVERAGE REVENUE PER CUSTOMER: [$/month] CHURN RATE: [%/month] (for recurring streams) MONTH 1 REVENUE: customers × ARPC MONTH 3 REVENUE: [calculate with growth and churn] MONTH 6 REVENUE: [calculate] MONTH 12 REVENUE: [calculate] ``` **Churn math for recurring models:** If you have 100 customers and 5% churn, you lose 5/month. To grow, your new customer acquisition must exceed your churn. This is why retention matters as much as acquisition. **Sanity check:** Sum all streams. Does total projected revenue cover your costs and provide a livable income within 12 months? If not, either the projections are wrong (re-examine growth assumptions) or the model needs rethinking. --- ## Step 6: Validate Before Building Before investing heavily in building out a revenue model, validate the core assumption: **"Will customers actually pay this way?"** Test methods: - **Pre-sales:** Offer the product at a discounted "founding member" price before it's built. If people pay, the model works. - **Fake checkout:** Build a landing page with a real checkout button. When someone clicks, show a "coming soon" page and capture their email. Measure how many click the buy button. - **Manual first version:** Deliver the product manually (by hand) at the planned price to 5-10 customers. If they pay and come back, the model is validated. --- ## Revenue Model Mistakes to Avoid - Choosing a model because it sounds impressive, not because it fits your product and customers. - Ignoring churn when projecting subscription revenue. Churn compounds painfully. - Building a marketplace model as a solopreneur. Two-sided markets require significant scale to work. Start with a one-sided model first. - Never testing alternative models. If subscription isn't working, try one-time + upgrade. Revenue models are experiments. - Stacking too many streams too early. Master one stream first, then layer in a second once the first is stable.


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