Member-only story
How To Build a Revenue Model
Unlike boiling water or tying your shoes, building a revenue model isn’t an everyday life skill. Yet even if you’re not a financial analyst, constructing a model framework is a useful way to learn about a business.
Below is a blueprint for modeling revenue for Hopin, a virtual events platform founded in 2019. The company turned heads last week when The Information reported that it was discussing raising a Series B at a $2 billion valuation. While this post focuses on Hopin, the process could be applied to other businesses.
Deconstructing a Conversion Funnel
A revenue model is like a Matryoshka doll, unpacking a business layer by layer. Hopin sells monthly subscriptions and annual subscriptions, so its revenue model should distill these two streams into their building blocks.
A useful aspect of many internet and software as a service (SaaS) companies is that you can touch and feel their products. Signing up for a service highlights the key steps needed to build a model. Hopin’s self-serve flow looks like this:
The first step to generating a sale is getting a customer in the door. For Hopin, this means someone visiting their website. A user then needs to create an account, create an organization profile, create an event, and potentially pay for it. Every step would become…
