Most founders pitch their revenue strategy like this: "We'll make money through: - Subscriptions - Enterprise deals - Consulting - Data licensing - API access" Here's what Peter sees: A founder who hasn't done the work. The strongest pitches I've seen nail one revenue stream. They can explain exactly why it'll work, who'll pay, and how they'll scale it. Multiple options often mask confusion, not opportunity. When a founder tells me "This is THE way we'll make money," I lean in. It shows conviction born from deep customer understanding. Your startup isn't a buffet. Pick your dish and make it exceptional. What do you think? Source: Startup Archive -- Check out my Newsletter - TheFoundersCorner via the Link on my profile page or the Link at the top of the page ☝️ Jam Packed with Actionable Insights Every Week 💙
I love this. I told 3 founders this exact thing after review their pitch decks this week. But it is not just the revenue stream - it’s everything. Simplify the entire story: product, revenue, ICP, etc. go macro, not micro.
Yes to focus and a clear idea of how'll you make money. But Thiel, Palantir and 8VC know that for the best SaaS companies this often means some PS to unlock greater ARR. https://www.8vc.com/resources/the-case-for-professional-services-in-enterprise-saas
I think… SalesForce started out as a services business to get their software into enterprise then flipped their services to 3rd party partners to change their revenue model from Managed Servies to SaaS and achieve a higher valuation. But still the same business. Most VC’s get obsessed on ‘focus focus focus’ yet miss the essential point. Focus should be on the vision, not on the model. The model won’t get you out of bed…but the model makes investors feel warm and fuzzy. What gets you out of bed is the vision. The model will evolve.
Depends, many fund raising efforts are project specific or should be. In a Waste to Energy business you’d miss the mark pitching one revenue stream. For example most depend on both tipping/gate fees (from feedstock) and offtake revenue from green fuel or electricity sales. There are many projects which have two or more core revenue contributors and if your funder cant get their head around that then you are dealing with the wrong funder. Having said that each revenue stream adds risks to be mitigated and the simplier the revenue model USUALLY the better.
When LinkedIn started it didnt charge for many things and after collecting a lot of data they realized how the tool was being used and then devised a business model around the usage. This is what I experienced first hand as a user and also read about. While what is mentioned in the post is ok in some cases, in nascent markets, it may be the case that one needs to figure out the mousetrap after some data collection and analysis. So, there are no decrees in the startup world. "It depends".
“Conviction born from deep customer understanding.” Love that at the end of the day, knowing why people will pay is the foundation and backbone.
In gaming and entertainment, when you serve billions, you need to cater to billions of needs. That’s why having multiple revenue streams isn’t a lack of focus, it’s a necessity. Look at how Elon Musk approaches business models. He’s not running a “buffet” because he’s confused; he’s doing it because complexity scales. Tesla doesn’t just sell cars; they’ve got energy, software, and insurance revenue streams, all designed to meet different aspects of customer demand. Gaming and entertainment are no different. Subscriptions might work for core users, but enterprise licensing, microtransactions, and ads could capture entirely different audiences. Why limit yourself to one “dish” when your audience spans millions of diverse tastes? Sure, founders need clarity. But clarity shouldn’t mean oversimplifying the reality of massive, multi-faceted markets. Sometimes, the bold move isn’t picking one path, it’s building the infrastructure to monetize all of them.
Some say there is no correct way of doing business others say otherwise. So if we took this statement where do we go from here? Nowhere. Let people explore and rise/fail/continue. It would be saying the big companies having multiple investments or departments in different sectors like Finance, Logistics, Defense, Energy, IT, Environment, Construction, HR, R&D has not thought through these investments. Let us just question; who are we to even comment on others business and strategies? Focus on your own business and to yourself and be an honest businessman. Do not make things complicated. Have a win win situation both for yourself and for your customer whether they be B2G, B2B, B2C. Grow together.
Note to self: It’s a better option to burn a ton of cash in a model that isn’t working bc I thought about it a lot before I had revenue
Great reverse engineering, but in reality, most early-stage start-ups need a buffet to survive. Testing multiple revenue streams isn’t always confusion - it’s how founders discover what customers will actually pay for. Just don’t pretend it’s all Michelin-starred.