This document provides teaching notes for mentors on revenue streams and models. It instructs mentors to ensure student teams are making progress on their hypotheses and discovery work. Mentors should focus critiques on student understanding of customer relationships. Common student mistakes include not understanding differences between customer acquisition and activation, as well as the importance of online marketing even for physical products. Mentors should emphasize the key components of revenue streams like types, models, pricing tactics, and differences between physical and digital models.

1. Revenue Streams
Teaching Notes

2. Teaching Objectives
• Teams should be showing real progress by now
• Do not give up on the lost souls; most will surprise you in the
end
• Don’t let them slow down the pace of discovery and customer
calls
• Make sure teams continue to:
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Annotate the business model canvas
Update their Discovery Narratives on LaunchPad Central
Include diagrams of each part of the hypothesis
Acknowledge you’ve been reading their posts (and comment
whenever you can)
• Focus your main critique on their understand of customer
relationships

3. How?
• Ask: “What earned media activities do you plan to do
for your startup? What do you hope to achieve?”
• Even though they won’t have time to do real demand
creation, they need to grasp the concepts of
Get/Keep/Grow, CAC, and LTV
• Ensure that their diagrams show funnel and real $s for
costs
• Ask: “Do you know what your customers read, what
trade shows they attend, gurus they follow, and where
they turn for new product information?

4. Common Student Errors
• To most, marketing is an even bigger mystery
than sales
• Let them know that the funnel is their “magic
decoder ring” to marketing
• Students often to not understand the difference
between customer “acquisition” and customer
“activation” for web/mobile startups
• Online marketing is important, even if the
product and sales channels are physical

5. Take Away from Udacity Lecture
• Students (and their mentors) should understand:
– Revenue model = the strategy the company uses to
generate cash from each customer segment
• Direct Sales, Licensing, Subscription
– Within the revenue model, how do I price the
product?
• Pricing is a TACTIC
• Revenue Model is the STRATEGY
– This is not about the income statement, balance sheet
and cash flow. Those are operating details that are
derived AFTER a proven revenue Model and pricing.

6. Mentors should emphasize:
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Types of revenue streams
Revenue Models
Pricing Tactics
When appropriate, also:
– Physical vs. Web-Mobile Revenue Models
– Multi-sided Market Revenue Models