We've talked about the different kinds of revenue models that there are, and like I said, we've barely scratched the surface of that. There's a lot to be learned about revenue models obviously and hopefully your CFO can teach you about it once you get a CFO. But the question is, what's the right one? What's the right revenue model for your business model? I'm sure that you know the beginning of the answer right now is, get out of the building and find out. The main determination of a revenue model is the one that's easiest for customers. Now, easiest can mean a lot of different things, so you got to be a little careful with this. But, in the first place, easiest means most familiar. If it's, if they're already accustomed to pay for something one way, they're not probably going to switch paying for it for a newcomer like you. So all other things being equal, you might want to stick with a revenue model that they're familiar with. You see this a lot in in the advertising business. People who buy advertisements are used to buying impressions. So they will buy the right to serve an ad to so many people. And a lot of online ad properties approach them with a different value proposition. They say, we'd like you to pay not for impressions, but for actions. We'd like you to pay for the people who actually click on your ad, or the people who actually, buy a product from you, or the people who actually give you a call. And those are fine, the, it's an interesting argument, and it may even be better for buyers of advertising, but they're not used to paying that way. And it's taken a long time to persuade them that they should try these new models. It's an education sale in effect, and, and that's something you can ill afford when you're starting up a startup. But that said, most familiar is not the only way in which a revenue model can be easy for customers. Another could be the easiest interface with their policies and procedures. If they have a way of doing business right now, and you have an easy interface to that, so that you don't disrupt the way they do business, then that's good too. That may even be better than having something with which they're familiar. So if you can go into them and say, look, here's how you're accustomed to buying stuff and the way you buy the stuff violates your own procurement policies. You should have something that's in line with your procurement policies and here's what we're offering you. When when you get a proposition like that, that's interesting to people because you're saying the most familiar might look easy, but this is even easier, and then a last option for easy is easiest to get approval. If you have somebody who's going to make a buying decision and that person has a certain buying authority, and you're pricing your product over that buying authority, you're just setting yourself up for trouble. They're, they're going to have to get approval for every time they want to purchase it. And it's going to lengthen your sales cycle, and it's going to kill you. So, easiest to get approval is another, kind of, easy to, to think about. I guess the rule is, if these criteria are contradictory, go with whatever seems easy to them. One sort of example of this is the one time sale versus subscription. A lot of businesses in the tech field are trying to become SaaS businesses, software as a service, which is a fancy way of saying that the software is sold on a subscription basis, as opposed to selling it for a one-time only perpetual license. When I started out in the software business, it was all shrink-wrapped software, it was all sold once, and, and, that was that. The cost of acquiring the customer may be the same. And in fact, when you sell shrink-wrapped software, you get all the money up front. So, you, you, so, your cash flow looks better. But, with SaaS, your lifetime value can be better because people will keep paying the subscription, month after month, year after year. And, that is why SaaS businesses on on Wall Street today are, are valued higher than traditional software businesses. That's also why a lot of entrepreneurs want to make their business a SaaS business it, rather than a perpetual business. Because that's better for them. Unfortunately there are areas where customers are used to buying the software in the old way. They buy it as a universal as perpetual license and that's that. And if you try to persuade these people to buy SaaS you're going to be arguing with the tide. It's, the tide's always going to win the quarrel that you have with it and, better not to go there. On the other hand, there is a phenomenon with, SaaS, called sticker shock where people are beginning to say, oh, oh, we have to pay this money month after month? And that might be a case where people are churning, and you might be able to win them away with a perpetual model, because of their costs are recurring, and as their usage expands, their costs are increasing. We've been talking a lot about how it's easy, you want to do the thing that's easiest for your customers. But there's one famous example of a company that violates all that and got away with it, SolarWinds. SolarWinds sells software for diagnosing the behavior of your data center. And prior to SolarWinds, there was a lot of data center software sold, and it was sold as big packages that were sold for a perpetual license, plus a maintenance stream. It's an old classic software model. It was a big decision. It was a long sale. It took a direct sales force, all the things we've talked about in other aspects of the business model. But that was the way people bought. That was how you bought data center software. And after all, with something that affects all the stakeholders in a data center, you would want the thing to be bought into at length. SolarWinds came along and said, okay, we're going to disrupt that model. We're going to sell software. We're going to sell it on a trial basis, so you can just download it and try it. We're going to sell it on a sort of per user basis where you just use your credit card and then you can, almost expense it. And use it in your own little area for your own little diagnosis problems, and then it scales upward by virality. You say, you know I'm using this thing called SolarWinds and it does really great network diagnosis. You should try it, where you are. And they made a roaring success at this. They completely controverted the, the existing idea of how you should sell data center software. And they're a publicly traded company today. They're, they're doing quite well. So you can break all these rules as long as you're breaking them in a higher cause. Interesting food for thought. So in order of importance, the revenue model is, the right revenue model is what your customers expect. That's number one, always. If you violate it, you got to violate it for a good reason. The right revenue model next is what meshes with the rest of your business model. If you have a way of reaching customers like SolarWinds did that uses the web as a channel that attracts people's attention through search, and then allows them to download. Then, a revenue model that's more scaled to that is, use your credit card and sign up for a subscription for a single user, and then expand the number of seats. And then finally, the right revenue model if all the other things work out, is the one that most exceeds your costs. Thanks.
