If you’re a founder, a builder, or even just someone trying to turn an idea into something real, there’s one question that quietly sits behind every product decision, every marketing attempt, and every fundraising conversation:
What is your business model?
Not your product.
Not your technology.
Not your pitch deck.
Your business model.
And if that sounds abstract, vague, or “MBA-ish,” let’s make it practical fast: your business model is the system that determines whether you can create value for customers, deliver that value reliably, and survive long enough to matter.
In this guide, we’ll unpack a customer-centric approach to business models using a simple framework, real examples, and practical tools you can apply immediately—even if your product isn’t built yet.
Why Business Models Matter (Even If Your Product Is “Breakthrough”)
Many founders assume the “breakthrough” comes from one place:
- a disruptive product
- a novel technology
- a new market category
- an unfair advantage in distribution
But here’s the counterintuitive truth:
A business model can be as disruptive as your technology
Sometimes, it’s more disruptive.
You can have a product that’s average—and still win—if the model is radically better than how the market currently works.
That’s not theory. It’s happened repeatedly.
The Business Model in One Sentence
A business model is how you:
- Create value
- Deliver value
- Make money
- Do it sustainably (so you can operate for the long haul)
If you’re familiar with business school frameworks (like Tom Eisenmann’s “diamond”), that maps neatly to:
- customer value proposition
- go-to-market model
- technology & operations model
- cash flow formula
But you don’t need a textbook to use this.
You just need the right questions.
The RSVP(D) Framework: A Sticky Way to Remember a Strong Model
A strong business model should eventually be:
- Repeatable: customers keep buying in a predictable way
- Scalable: you can grow without breaking operations
- Valuable: for customers and for you
- Profitable: you can sustain it financially
- Defensible: it builds a moat over time
That’s the RSVP(D) idea. The point isn’t memorizing letters—it’s remembering that a business model isn’t “how I sell” or “how I price.” It’s the full system that keeps you alive and growing.
And there’s a reason it matters so much: if you get it wrong, it can nearly kill the company.
The “Write the Game, Write the Rules” Idea
Think of business like a game.
If I hand you Monopoly, you already know what happens:
- buy properties
- collect rent
- win by accumulating assets and cash
But what if someone rewrote Monopoly so it was about how much money you lose?
That would be a new game.
And the person who writes the game—and the rules—has the best chance of winning.
That’s what business models allow you to do.
You can change the rules of how value is created, delivered, bought, priced, adopted, retained, and expanded.
That’s also why Clayton Christensen’s idea of the innovator’s dilemma matters here: disruption often isn’t just a better product. It’s a different model that incumbents can’t adopt without harming themselves.
Case Study: Symantec/Norton Antivirus — Winning With a Better Model (Not a Better Product)
Here’s a perfect example of business model disruption in action.
Back in the early days of antivirus software:
- antivirus was sold as boxed software in retail
- customers paid a lot, bought once, and hoped it stayed useful
- the product quality varied—and sometimes was not great
In fact, competitors had better virus detection at one point.
So what do you do if your product isn’t the best?
You change the game.
Instead of selling “software,” the model shifted to selling protection as a service:
- customers don’t actually want antivirus software
- they want to not worry about viruses
- they want the protection to keep updating over time
So the disruptive move was:
- create a subscription
- fund a team to stay ahead of virus signatures
- deliver ongoing updates and proactive protection
- prove value continuously
The results were massive:
- competitors got wiped out quickly
- customer experience improved
- pricing increased (because value was clearer)
- the model expanded into broader “data security” services
- revenue and profit grew dramatically
Same market. Same underlying problem. Better model.
And a key lesson:
You can have a worse product and still win if your business model is superior in how it serves customers.
Step 1: Start With the Customer — One Need, One Word
A customer-centric business model starts with a deceptively simple activity:
Write down ONE thing your customer needs.
Not ten things.
Not a feature list.
Not a mission statement.
Just one.
Examples from real teams:
- Personalization (health is a personal journey)
- Representation (students need teachers who look like them and understand them)
- Turnaround time (faster evaluation from data request to usable output)
- Access (affordable, convenient coffee for low-income consumers)
Notice what these are:
- not products
- not technologies
- not “AI”
- not “marketplaces”
They’re needs.
And needs are where business models start.
Step 2: Find Your Core — The “CALL”
Next comes the most powerful concept in the entire framework:
The core capability of really exceptional value
This is the “CALL.”
It’s the thing customers associate with you instinctively.
Ideally, it’s one word.
Examples:
- Spotify → discovery
- Reddit → community
- Patagonia → mission / culture / style (depends on the customer)
People won’t always agree on the “one word” for a big brand. That’s normal.
But for a startup, focus is survival.
So the goal isn’t “make everyone describe us the same way.”
The goal is:
Identify a Minimum Viable Segment (MVS)
A small, focused segment where:
- customers share the same need
- the need is urgent enough to matter
- your solution maps clearly to it
Because if you try to serve everyone, your energy gets diluted and pulled in too many directions.
A Quick Reality Check: Disrupting Too Much at Once
There’s a smart warning that often applies, especially in regulated industries like energy, climate, or healthcare:
If your technology is disruptive, don’t also disrupt how people buy it—unless you’re sure customers can adopt it.
Sometimes the right move is:
- new tech, familiar buying process
- familiar delivery, new value
- new model, familiar product experience
The judge of this is not your gut.
The judge is your customer.
Always.
Case Study: TetraScience — Almost Died, Then Found the Real Model
This story is a masterclass in why business model choices matter.
TetraScience started with an obvious pain:
Scientific instruments worldwide lacked connectivity.
Data was being:
- handwritten
- manually logged
- trapped inside machines
- impossible to use at scale
So their first move was:
- build a hardware IoT device to connect instruments
Sounds logical.
But it nearly killed the company.
Hardware created:
- inventory complexity
- cost burden
- operational drag
- competition with instrument manufacturers
- slow adoption and high friction
Then came the insight:
Customers don’t care how the data gets there.
They care about using the data.
So the winning model wasn’t hardware.
And it wasn’t “software” in a generic sense either.
It was:
A normalized data pipeline platform (an ecosystem)
A system that:
- connects instrument manufacturers (partners, not competitors)
- connects biopharma users (the minimum viable segment)
- normalizes and structures data over time
- makes the platform “Switzerland” in the middle
That shift unlocked growth.
Lesson:
The best business model is the one customers actually want—often different than what founders first assume.
Step 3: Delivering Value — The Multiplier and the Lever
Once you know the core need and the CALL, the next question is:
How do you deliver that value in a way that becomes powerful?
That’s where two forces matter:
Multipliers (increase value / revenue / reach / coverage)
- increase reach (more customers)
- increase coverage (more usage per customer)
- increase LTV (longer relationship, more value over time)
- drive viral spread (customer tells others)
Levers (reduce cost / time / effort)
- reduce time-to-value
- reduce implementation friction
- reduce operational burden
- reduce customer effort
If you only sell $1 of value for $1 of cost, you don’t have a business.
You need multipliers and levers around the core.
The 4 Startup Secrets That Make Your Model Stronger
These “startup secrets” are practical design levers you can build into your product and business from the beginning.
Startup Secret #1: SLIP (Product-Led Growth by Design)
A “slippery” product is friction-free to adopt and love.
SLIP means:
- Simple to use and install
- Low to no initial cost or friction
- Instant value (fast time-to-value)
- Plays well in the ecosystem (fits existing workflows)
If people download an app and delete it five minutes later, it failed SLIP.
A key idea here:
The best value props are highly disruptive… but non-disruptive to use.
Modern example:
- enterprise products that deploy via containers to cloud (AWS etc.)
- avoid disruptive infrastructure changes
- integrate into existing stacks
Quick Rule:
If adoption requires customers to change everything, adoption will be slow—or dead.
Startup Secret #2: Price & Package for Pull (Not Push)
Pricing and packaging aren’t just “how you make money.”
They are part of your adoption engine.
If every app cost $1,000 upfront, almost no one would try new things.
That’s why so many products use:
- free trials
- freemium tiers
- usage-based pricing
- starter plans that expand into enterprise plans
Example: Wistia (video hosting)
- easy entry to start
- pricing scales based on how much you store/use
- fits marketing teams who need video without a full production crew
Bundling can also work, but bundling is a full strategy of its own:
- cross-sell
- upsell
- convenience packaging
- integrated experiences
The key is: pricing should match how customers experience value.
Startup Secret #3: Co-Create With Community (Win-Win)
Open source is the cleanest example:
- code lives in public repositories
- anyone can contribute, adapt, improve
- communities can create enormous leverage
Case: Drupal
- started from solving a founder’s own problem
- grew into an enterprise-grade CMS used at massive scale
- open-source code was free
- money came from services, reliability, security, scalability, cloud deployment
The win-win is everything:
- contributors solve problems they care about
- the ecosystem expands
- the product improves faster than a closed team could build
This can apply beyond open source:
- user communities
- partner ecosystems
- survey-driven co-creation (like athletes shaping a pre-workout product)
- product design councils
- creators building modules/templates
If you want a community:
- it can’t be “help me build my thing”
- it must be “we share a problem, let’s solve it together”
Startup Secret #4: Partnerships and the “Whole Product”
Most startups are not a whole product. They’re a piece.
A whole product includes everything the customer needs end-to-end.
Example: data + AI workflows
A customer may need:
- cloud storage
- your data pipeline
- models (from someone else)
- deployment tooling
- integration into an application workflow
If you only sell your “piece,” customers still can’t succeed.
Strategic partnerships:
- help you complete the solution
- reduce your cost
- improve adoption
- accelerate distribution
A great partner doesn’t just help you build.
They help you sell—and help customers succeed.
The 3 UPS: Update, Upgrade, Upsell
This is the lifecycle engine of sustainable models.
Update
Keep it current:
- security fixes
- data refresh
- reliability improvements
- ongoing maintenance
If your data becomes outdated, you’re dead.
Upgrade
Add capability:
- recommendations
- smarter automation
- new features
- new interfaces (mobile, integrations)
Upsell
Increase value per customer:
- more usage
- more teams
- enterprise tier
- expanded solution scope
This is how businesses build moats.
It keeps the customer the same while expanding what you deliver.
And yes: update + upgrade helps retention.
Upsell increases value per user.
Customer Journey: Where Your Business Model Actually Lives
A customer doesn’t wake up and buy your product instantly.
They move through a journey:
- they have a problem
- they explore solutions
- they choose one
- they implement it
- they get trained
- they test it
- they roll it out
- they measure value
- they optimize
- only then do they renew and expand
A customer-centric model asks:
- where do we reduce friction?
- where do we shorten time-to-value?
- where do we increase confidence?
- where do we help customers succeed?
Because the most sustainable businesses are built on a simple truth:
Your success depends on your customer’s success.
Quick Links: What Is a Customer Journey Map? Examples & Process by Harvard Business School
Practical Tools You Can Use Immediately
A. Business Model Snapshot Table (Fill This Out)
| Category | Your Answer |
|---|---|
| Customer segment (MVS) | |
| Customer’s one core need | |
| Your CALL (1 word) | |
| How you create value | |
| How you deliver value | |
| Your multiplier (increase reach/value) | |
| Your lever (reduce cost/time) | |
| SLIP: what makes adoption frictionless | |
| Pricing/packaging entry point | |
| Partnership(s) for whole product | |
| Update plan | |
| Upgrade path | |
| Upsell path | |
| What makes it defensible |
B. SLIP Checklist
Use this before you ship anything.
Simple
- Can a new user understand it without training?
Low to no initial cost
- Can they try it with low risk?
Instant value
- Do they get a result quickly?
Plays well
- Does it integrate into existing tools/workflows?
C. The “Core Need” Test
If your product pitch cannot answer this in one sentence, you’re not ready:
“My customer needs ________ because ________.”
Examples:
- personalization because health is a personal journey
- representation because students need role models they relate to
- turnaround time because faster data access changes decisions
- access because affordability and convenience matter
D. Partnership Map (Whole Product Map)
Draw this as a simple ecosystem diagram:
- What does the customer need end-to-end?
- What do you provide?
- What do partners provide?
- What must be integrated?
If your solution isn’t whole, customers won’t succeed.
The End Goal: A Sustainable, Defensible, Disruptive Model
A great business model becomes:
- repeatable
- scalable
- valuable
- profitable
- defensible
- disruptive
That disruption can be so powerful it changes industries:
- open source disrupted proprietary stacks
- ad models disrupted paid software
- cloud disrupted on-premise enterprise
- subscription models reshaped consumer and B2B markets
And it’s not just strategic.
It impacts your founder outcome directly.
A smarter business model can mean:
- spending less
- being more cash efficient
- higher valuations
- lower dilution
- higher ownership
- better long-term outcomes
In simple terms:
Business models affect your bottom line as a founder.
Summary: What You Should Do Next
If you want to build a customer-centric business model, start here:
1) Define your Minimum Viable Segment (MVS)
One segment. One shared need.
Quick Links: Working on Product-Market Fit? Start with Minimum Viable Segment
2) Choose the customer’s “one word need”
Personalization, turnaround time, access, representation—whatever is true.
3) Define your CALL
What are you exceptionally good at that maps to that need?
4) Add multipliers and levers around the core
Increase value and reach. Reduce cost and friction.
5) Design for SLIP
Make adoption easy and value immediate.
6) Price and package for pull
Start simple. Expand. Don’t block adoption.
7) Build partnerships for the whole product
Don’t force customers to stitch your solution together.
8) Build your 3 UPS roadmap
Update, upgrade, upsell—keep customers and expand value.
Quick Resources: True customer-centricity: An operating model for competitive advantage by McKinsey & Company
40 FAQs: Customer-Centric Business Models
1. What is a business model in simple terms?
A business model is the system that explains how a company creates value, delivers value, makes money, and sustains itself over time. It’s not just pricing or marketing—it’s the full engine that keeps the company alive and growing.
2. Why is a business model more important than a product?
Because even a great product can fail under a weak model. A strong business model determines how customers adopt, pay for, and continue using your solution. Sometimes a better model beats a better product.
3. Can you win with an average product but a great business model?
Yes. The Norton antivirus example shows this clearly. Even without the best product, shifting to a subscription “protection as a service” model created stronger customer value and wiped out competitors.
4. What makes a business model disruptive?
A business model is disruptive when it changes how value is created, delivered, priced, or adopted in a market. It rewrites the “rules of the game,” often in a way incumbents can’t easily copy.
5. What does customer-centric business model mean?
It means the model is designed around what benefits the customer most—not just how the company makes money. Customer success drives company success.
6. What is the RSVP framework in business?
RSVP stands for Repeatable, Scalable, Valuable, Profitable, and Defensible. It describes the qualities of a strong, sustainable business model.
7. What does “Repeatable” mean in a business model?
It means customers buy in predictable ways, and the company can consistently deliver the same value across customers.
8. What does “Scalable” mean in business?
Scalable means the company can grow revenue without costs increasing at the same rate. Growth doesn’t break operations.
9. What makes a business model defensible?
Defensibility comes from moats like network effects, partnerships, brand, switching costs, or ecosystem advantages that make it hard for competitors to replicate your success.
10. What is the “write the game, write the rules” idea?
It means designing a business model that changes how the market operates. If you define the new structure of value creation, you give yourself the best chance of winning.
11. How do I start building a customer-centric business model?
Start by identifying one core need your customer has. Not ten. Just one. Then build everything around solving that need better than anyone else.
12. Why should I focus on one core customer need?
Focus creates clarity. When startups try to serve multiple needs, they dilute their messaging and execution. One core need builds alignment and momentum.
13. What is the CALL in a business model?
CALL stands for the Core capability of really exceptional value. It’s the one-word strength customers associate with your company.
14. What is a Minimum Viable Segment (MVS)?
An MVS is a small, focused group of customers who share the same urgent need. It’s the best starting point for building traction.
15. Why is focusing on a Minimum Viable Segment important?
Because startups don’t have unlimited resources. Serving a tight segment increases clarity, reduces marketing waste, and improves product-market fit.
16. Should I disrupt everything at once?
No. If your technology is disruptive, keep adoption familiar. If your model is disruptive, keep usage simple. Customers decide what they can realistically adopt.
17. What can founders learn from the TetraScience example?
That customers don’t care about your architecture—they care about usable value. TetraScience shifted from hardware to a data ecosystem platform, which unlocked growth.
18. What are multipliers in a business model?
Multipliers increase revenue or value, such as expanding reach, increasing usage per customer, improving lifetime value, or driving viral growth.
19. What are levers in a business model?
Levers reduce cost, time, friction, or operational burden—either for the company or the customer.
20. Why do I need multipliers and levers?
Without them, you’re trading equal value for equal cost. Multipliers grow value; levers reduce friction and cost. Both are necessary for sustainability.
21. What is SLIP in product-led growth?
SLIP stands for Simple, Low cost, Instant value, and Plays well in the ecosystem. It describes frictionless adoption.
22. Why is instant value so important?
Time-to-value determines retention. If users don’t see quick results, they abandon the product.
23. What does “plays well in the ecosystem” mean?
It means your product integrates with existing workflows and tools without forcing customers to change everything.
24. How does pricing influence business model success?
Pricing affects adoption. Freemium, trials, and usage-based models lower entry barriers and encourage expansion.
25. What is “price and package for pull”?
It means structuring pricing so customers want to adopt, rather than forcing them into large upfront commitments.
26. When does bundling make sense?
Bundling works when combined products increase convenience or perceived value, but it must align with customer buying behavior.
27. What is co-creation in a business model?
Co-creation involves building alongside users or communities, creating a win-win dynamic that increases engagement and growth.
28. How does open source create a strong business model?
Open source builds community contribution and ecosystem growth, while monetization happens through services, reliability, or hosted infrastructure.
29. What is a whole product?
A whole product includes everything the customer needs to achieve success—not just your specific feature.
30. Why are partnerships critical in startups?
Partnerships help complete the whole product, reduce costs, improve distribution, and accelerate customer success.
31. What are the 3 UPS in business models?
Update, Upgrade, and Upsell. These represent retention, feature growth, and revenue expansion over time.
32. Why is updating important?
Updates keep the product current, secure, and reliable. Without updates, trust erodes.
33. How do upgrades grow a business?
Upgrades introduce new capabilities that deepen customer reliance and increase value delivered.
34. What is upselling in a customer-centric way?
Upselling means offering more value to customers who are already succeeding—not forcing unnecessary add-ons.
35. How does the customer journey impact business models?
Business models succeed when they reduce friction at every stage: awareness, evaluation, implementation, measurement, and expansion.
36. Why is customer success tied to business sustainability?
Because renewals and expansions happen only when customers achieve measurable results.
37. How do I test my business model before building a product?
Use the “Core Need Test”:
“My customer needs ____ because ____.”
If you can’t complete that clearly, you’re not ready.
38. What makes subscription models powerful?
Subscriptions align ongoing customer value with recurring revenue, increasing lifetime value and stability.
39. How do business models impact founder outcomes?
Better models increase cash efficiency, improve valuations, reduce dilution, and increase founder ownership over time.
40. What is the first step I should take today?
Define your Minimum Viable Segment and write down the one core need you’re solving. Everything else builds from that foundation.
