What is the SaaS business model?

SaaS (Software as a Service) sells software access as a recurring subscription, giving companies predictable, recurring revenue.

What is the difference between CAC and LTV?

CAC is the cost to acquire a customer, while LTV is the total revenue that customer generates over time; healthy businesses keep LTV well above CAC.

Intermediate🖼️ 20 slides⏱ 4 minStartup & Tech Business

💼 Tech Business Models

A business model is how a company creates and captures value. This visual guide covers common tech business models — SaaS, subscriptions, freemium, marketplaces, advertising, and platforms — and how to choose the right one.

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What Is a Business Model?

How a company creates and captures value.

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Why It Matters

A great product still needs a way to make money.

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SaaS

Sell software as a recurring subscription.

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Subscriptions

Recurring revenue for ongoing value.

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Freemium

Free tier hooks users; paid unlocks more.

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Marketplaces

Connect buyers and sellers, take a cut.

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Advertising

Free product funded by ads.

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Transaction Fees

Earn a percentage of each sale.

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Licensing

Charge to use your technology.

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Usage-Based Pricing

Pay for what you use (like cloud).

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Platform Model

Others build on top of your platform.

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Network Effects

More users make the product more valuable.

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Unit Economics

Profit per customer must work.

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CAC and LTV

Cost to acquire vs lifetime value.

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Churn

Losing customers kills subscription growth.

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Pricing Strategy

Price for value, not just cost.

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Recurring vs One-Time

Recurring revenue is more predictable.

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Choosing a Model

Match the model to your product and market.

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Combining Models

Many companies mix several.

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Getting Started

Map how you create and capture value.

Frequently Asked Questions

A business model is how a company creates value for customers and captures revenue in return, such as through subscriptions, ads, or transaction fees.