Before discussing specific strategies, it is important to differentiate between a [[revenue model]] and [[pricing]]. The [[revenue model]] is the overall strategy for generating income from each [[customer segment]]. It addresses the question of what [[value proposition]] the customer is paying for and how that value will be captured as revenue. [[pricing|Pricing]], in contrast, refers to the tactics used within that strategy—the specific monetary amount charged for a product or service. Many startups mistakenly equate revenue solely with the price tag. Another common pitfall is basing [[pricing]] solely on the cost of producing the product plus a desired [[markup]] ([[cost-plus pricing]]). While simple, this often leaves significant money on the table because it ignores the value the customer perceives in your offering. Similarly, simply undercutting a competitor's price without understanding your unique [[value proposition]] or the [[customer segment]]'s willingness to pay can be a disastrous strategy. The insights you've gained from [[customer discovery]] – understanding what customers truly value, how they currently pay for similar solutions, and how much they pay – are paramount in defining both your [[revenue model]] strategy and your [[pricing]] tactics. Your goal is to align how you make money with the value you deliver to each specific [[customer segment]]. Next: [[Types of Revenue Streams]] Back to: [[How Will You Generate Revenue?]]]