Business model · Explore

Revenue model design

Changes how you charge rather than what you sell. Frequently the higher-leverage move, and almost always the less considered one.

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Stage
02 Explore
Works at
Business
Maturity
An idea → Scaling
Time
Half a day to design options, longer to test

What it is

The design of how a business converts value into revenue, as distinct from what it offers. Two firms with the same product and different revenue models often have entirely different economics, growth profiles and customer relationships.

Value accrual
When and how the customer gets value — at purchase, continuously, per use, or on an outcome. The revenue model should track this, and friction appears wherever it does not.
Model options
Transaction, subscription, usage-based, licence, outcome-based, freemium, platform fee, service attach, or hybrids. Most sectors default to one out of habit.
Behavioural effect
What each model does to how customers use, value and evaluate you. Frequently larger and longer-lasting than the revenue effect.
Cash flow shape
When money arrives relative to when cost is incurred. Transitions between models create troughs that need funding.
Reversibility
How hard it would be to change back. Pricing can be adjusted quietly; revenue models cannot.
The mistake people makeThis is a tool for businesses with a proven offer. Redesigning how you charge for something nobody has yet bought is rearranging the terms of a transaction that is not happening.
What it’s forWhat you sell is right but how you charge for it may not be.
What it’s not forThe offer itself is unproven. Fix that first.

How you run it

  1. Map how value accrues to the customerIs it at purchase, over time, at a moment of use, or on an outcome? Charging on a different rhythm to value creation causes friction everywhere.
  2. Generate several modelsTransaction, subscription, licence, usage, outcome, freemium, platform fee, service attach. Most businesses only consider the one their sector uses.
  3. Work out what each does to behaviourA subscription changes what a customer expects and what they measure. Revenue models are behaviour models, and that effect usually exceeds the revenue effect.
  4. Model the cash flow transitionMoving from upfront to recurring creates a cash trough that has killed otherwise sound businesses. Size it before committing.
  5. Test on a segment before switchingRevenue model changes are hard to reverse — customers remember what they used to pay and how.

The prompt

Two ways to run it

Run this tool in your own Claude

The short prompt starts your partner against the library on your disk. The long one carries everything with it and needs nothing installed.

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