Understanding Business and Revenue Models: Creating Value and Driving Profitability:
The business model describes the functioning and important factors of a company. The business model helps you to identify, analyse and improve the key factors of your company. It answers the question of how your company generates value, what you deliver to customers and how you set yourself apart from the competition.
Revenue models show you how you can generate profits. Revenue models come in different forms, and the internet in particular has created many new revenue models. We provide you with an overview of the most common and important revenue models and show you which model is right for your company.
Video 1: Business Model Navigator
Video 2: Innovative revenue models
The revenue model describes from which sources and in which way income is generated. There are different ways in which a company can earn money. Here we show you the most important content and key questions that you can use to develop your revenue model.
Additional content: Business Model Canvas
The Business Model Canvas (BMC) is a strategic framework that helps businesses design, visualize, and refine their business models. Developed by Alexander Osterwalder, it is widely used by startups, entrepreneurs, and established companies to understand how they create, deliver, and capture value.
Unlike traditional business plans that can be long and rigid, the BMC provides a clear, one-page overview of the key components of a business. It allows for agile adjustments, ensuring that business owners can quickly test ideas, identify gaps, and make improvements without spending too much time writing long documents.
The BMC is divided into nine key building blocks, which are categorized into four main areas:
📌Offering (What value is being provided to customers?)
📌Customers (Who are the customers and how do they interact with the business?)
📌Infrastructure (What is needed to run the business?)
📌Finances (How does the business generate and manage money?)
1. Value Proposition – What makes your business unique?
The value proposition is the core of the Business Model Canvas. It defines why customers should choose your product or service over competitors.
- Innovation: Offering something entirely new.
- Performance: Improving existing products/services.
- Customization: Tailoring solutions to specific customer needs.
- Convenience: Making life easier for the customer.
- Price: Offering a better deal than competitors.
2. Customer Segments – Who are your customers?
A customer segment is a specific group of people or businesses that a company targets with its products or services.
- Mass Market: Broad appeal (e.g., Coca-Cola).
- Niche Market: Specialized audience (e.g., luxury watches).
- Segmented Market: Different versions for different audiences.
- Multi-sided Market: Serving two or more groups (e.g., Uber connects drivers and passengers).
3. Customer Relationships – How do you interact with your customers?
- Personal Assistance: Direct customer support.
- Self-Service: Customers help themselves (e.g., FAQs).
- Automated Services: AI chatbots and recommendation engines.
- Communities: Engaging customers in a shared space (e.g., Apple forums).
4. Channels – How do you deliver value to customers?
- Own physical stores or online platforms?
- Partner stores or marketplaces?
- Direct sales vs. indirect sales through intermediaries?
5. Key Partners – Who supports your business?
Key partners are external companies, suppliers, or stakeholders that support the business by providing essential resources, services, or capabilities.
- Strategic alliances: Non-competitors working together for mutual benefit.
- Joint ventures: Businesses creating a new entity together.
- Supplier relationships: To secure raw materials or essential services.
- Outsourcing: Delegating certain business functions to external providers.
6. Key Activities – What do you need to do to succeed?
Key activities refer to the most important tasks and processes a business must perform to operate successfully and deliver its value proposition.
- Production: Manufacturing or creating a product.
- Problem-solving: Consulting, customer support, or service-based businesses.
- Platform management: Running an app, website, or software.
7. Key Resources – What assets are essential for your business?
Key resources are the assets required to operate and deliver value to customers. They can be tangible (physical) or intangible (intellectual).
- Physical: Offices, machinery, warehouses.
- Intellectual: Patents, trademarks, brand reputation.
- Human: Skilled employees, expert knowledge.
- Financial: Investment capital, credit lines.
8. Revenue Streams – How does the business make money?
- Product sales (one-time purchases).
- Subscription models (Netflix, Spotify).
- Freemium models (basic service for free, premium features paid).
- Licensing and franchising.
9. Cost Structure – What are the main costs?
- Fixed costs: Rent, salaries, long-term contracts.
- Variable costs: Manufacturing, raw materials, marketing.
- Economies of scale: Reducing costs as production increases.
Final Thoughts: Why Use the Business Model Canvas?
The Business Model Canvas is a powerful tool for startups and established businesses alike. Its clear and structured format enables:
- ✅ Quick business planning.
- ✅ Efficient strategy testing.
- ✅ Easy collaboration among teams.
- ✅ A customer-centric approach.
Examples of revenue models
💰 1. Direct Sale (One-Time Payment)
In direct sales, a company sells a product or service to a customer for a one-time payment. This model is classic, easy to understand, and widely used.
Example: AVM (Fritz!Box) sells routers and devices directly to end customers.
✅ Advantages: Immediate revenue, Easy to calculate
❌ Disadvantages: No recurring revenue, Continuous need for customer acquisition
🔁 2. Subscription Model
The customer pays regularly (monthly or yearly) for access to a product or service.
Example: Deutsche Telekom – Mobile and internet contracts with monthly fees. Or SaaS models for using specific software.
✅ Advantages: Predictable, recurring revenue, Long-term customer retention
❌ Disadvantages: Higher service workload, Risk of cancellations if unsatisfied
🎁 3. Freemium Model
Description: Basic service is free, additional features are paid.
Example: NetSpot or WiFi Analyzer Apps offer free basic features and paid pro versions.
✅ Advantages: Low entry barrier, Fast growth possible
❌ Disadvantages: Low conversion rate from free to paid users, High infrastructure costs possible
🧠 4. Licensing
Use of a product (e.g., technology or software) is permitted to other companies in return for license fees.
Example: A startup develops an innovative 6G antenna design and licenses it to large manufacturers.
✅ Advantages: High margin, Low production costs, Potentially scalable
❌ Disadvantages: Dependency on licensees, Protection via IP rights required – often expensive, especially internationally
👥 5. Brokerage Model
Description: Revenue is generated by brokering transactions between third parties.
Example: Check24 for telecom tariffs – earning commissions for mediation.
✅ Advantages: No own product needed, Low risk
❌ Disadvantages: Dependency on partners, Margins can be low
🏷 6. Advertising Model
Description: Products or content are free – revenue comes from advertising.
Example: YouTube channels about tech products or Telekom blogs with sponsored content.
✅ Advantages: Free offering for users, Reach becomes a currency
❌ Disadvantages: Dependency on advertisers, Data privacy concerns
🛠 7. Pay-per-Use
Description: Billing only occurs based on actual usage.
Example: Cloud services for network analysis that charge based on data volume.
✅ Advantages: Low entry costs for customers, Fair and flexible
❌ Disadvantages: Fluctuating revenues, Difficult to plan
📦 8. Bundling
Description: Combining multiple services into one overall price.
Example: Telekom MagentaEINS – landline, mobile, and streaming in one package.
✅ Advantages: Higher perceived value, Customer loyalty through convenience
❌ Disadvantages: Complex pricing, Risk of cannibalizing individual products
🏗 9. Platform Model
Description: The platform operator connects providers and consumers – revenue through transactions or access fees.
Example: Open RAN platforms in telecom infrastructure
✅ Advantages: Scalability, Network effects
❌ Disadvantages: Requires critical mass, High development effort
➡️You can find more information on the topic of platform business models in the dedicated course.
💳 10. Leasing / Rental Model
Description: Temporary use of a product for a fee.
Example: Telecom hardware rented to businesses
✅ Advantages: Regular income, Lower entry barrier for customers
❌ Disadvantages: Maintenance costs, Leased hardware remains property of the provider
🧑🔧 11. Service and Maintenance Contracts
Description: Customers pay for regular support, updates, or maintenance.
Example: Maintenance contracts for data centers or router solutions with ISPs
✅ Advantages: Additional revenue post-sale, Long-term customer relationships
❌ Disadvantages: High personnel effort, Challenging SLA compliance
High-Tech Gründerfond #Foundersclass
What is the High-Tech Gründerfonds (HTGF)?
High-Tech Gründerfonds (HTGF) is Germany’s leading seed investor for early-stage tech and high-tech startups. It offers initial funding of up to €1 million, with potential follow-on investments of up to €3 million.
More than just capital, HTGF provides access to an extensive network of industry partners, experienced co-investors, and startup-savvy experts. Founders benefit from hands-on support, strategic guidance, and real connections to scale their ideas.
HTGF focuses on digital tech, industrial tech, life sciences, and new materials – making it a strong partner for ambitious, science-driven startups ready to make an impact.
What is the High-Tech Gründerfonds #Foundersclass?
The #Foundersclass of High-Tech Gründerfonds (HTGF) is an initiative aimed at connecting founders and encouraging exchange within the startup community. Through regular events and formats, the #Foundersclass offers a platform for founders to share their experiences, learn from each other, and grow together.
This network helps overcome challenges and paves the way to success. Some of these events were recorded on video – we’re sharing them here with you. These videos are produced and published by HTGF on YouTube. We’re simply linking to them here.
Downloads, Links and Templates
Understanding Business Models with over 100+ examples: https://businessmodelnavigator.com/
Busienss-Model-Navigator: Magic Triangle fra St. Gallen: https://dbd.au.dk/c/tools/magic-triangle
Business Model Canvas: https://seafile.rlp.net/d/c34afa92d64f46a6b830/
Lean Canvas Template by gründerplattform: https://tinyurl.com/leancanvasgruenderplattform