How to Make Money from Your Product

By the end of this Gate, learners will be able to:

• Understand the role of a business model in capturing value and explain how it differs from pricing strategy.

• Identify and compare different business model types (e.g., subscription, one-time charge, freemium, usage-based) using customer, value, competitive, and internal fit criteria.

• Select a business model that best aligns with their product, customer segment, and market dynamics.

• Develop an initial pricing framework based on perceived customer value, pricing psychology, and competitive benchmarks.

• Estimate their Cost of Customer Acquisition (CoCA) by identifying and calculating relevant marketing and sales costs.

• Calculate the Lifetime Value (LTV) of an acquired customer using projected revenue, margin, retention rates, and discounting.

• Evaluate the relationship between LTV and CoCA to assess the financial viability of their venture, aiming for an LTV/CoCA ratio of 3:1 or greater.

• Recognise key levers to improve profitability, such as increasing retention, reducing acquisition costs, or enhancing gross margins.

• Formulate data-informed hypotheses and validation plans to test their business model and pricing in the real world

By completing the first five gates of the Entreprenerds 10-Gate Program, you have laid a robust foundation for transforming your idea into a structured, scalable, and customer-driven business. Here’s the progress your venture has made so far:

You Have a Clear Business Idea & Strong Team (Gate 1)

• Identified a real problem worth solving and developed an idea with strong market potential.

• Built a committed founding team with complementary skills to execute the vision.

• Defined the raison d’être of your business—why it exists and the value it aims to create.

You Know Your Target Customer (Gate 2)

• Defined your customer segments, ensuring you focus on those with the strongest need and willingness to pay.

• Selected your Beachhead Market, giving your startup a focused, high-potential entry point.

• Created a detailed end-user persona, ensuring your product or service aligns with real customer needs.

You Have Defined How to Serve Your Customers (Gate 3)

• Outlined how your product or service delivers value, ensuring a strong product-market fit.

• Identified the best channels and methods for delivering your product or service effectively.

• Developed your customer journey map, from discovering your product to becoming a loyal user.

You Have a Customer Acquisition Strategy (Gate 4)

• Mapped out the Decision-Making Unit (DMU) to understand who influences and approves the purchase.

• Defined the step-by-step process for converting leads into paying customers.

• Created a sales strategy with clear triggers and processes to maximize conversion.

You Know How to Make Money from Your Product (Gate 5)

• Designed a business model that captures value efficiently and fits your customers, competitive landscape, and internal capabilities.

• Developed a pricing framework aligned with perceived value and market dynamics.

• Estimate your Cost of Customer Acquisition (CoCA) to understand the investment required to acquire each paying customer.

• Calculated your Lifetime Value (LTV) to assess how much revenue a customer is worth over time, and ensured that LTV significantly exceeds CoCA.

• Evaluated your revenue model’s sustainability using the LTV/CoCA ratio to inform decisions on growth, pricing, and marketing.

Where Your Business Stands Now

At this stage, your business has progressed from a promising concept to a viable, revenue-driven venture with the potential to scale. You now have:

✔ A clear business idea and mission

✔ A well-defined customer base and focused market strategy

✔ A validated sales and customer acquisition process

✔ A business model and pricing structure ready to generate sustainable revenue

✔ Financial insights into what it costs to gain and retain customers—and what each is worth to your venture

You're no longer just building a product. You’re building a business.