Business Model Guide : YC Startup Library | Y Combinator : Business Model Guide by Aaron Epstein BUSINESS MODELS Here are the nine most common business models we see in startups: SaaS (Software as a Service) Cloud-based subscription software PRIMARY METRICS: Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR) Growth Rate: Measured weekly or monthly Net Revenue Retention: % of recurring revenue retained from a prior period CAC: Costs to acquire a new customer TAKEAWAYS: All the benefits of recurring revenue Can have non-recurring revenue, but don’t include in ARR/MRR Usually sold to businesses, ideally on annual contracts Growth can be driven by direct sales, self-serve acquisition channels, or both Transactional Facilitate transactions and take a cut PRIMARY METRICS: Gross Transaction Value (GTV): Total payment volume transacted Net Revenue: Fees charged for transactions (often a %) User Retention: % of month 1 cus...