And they were male and female 18 30 and they were casual fans.

Another type of revenue model is licensing.

How is it that you make money?

And the first thing we need to figure out is, what is our revenue model.

The first thing you have to figure out is what's the revenue stream

They need to understand the external environment and they need to come in.

Profitable.

Is it a license or subscription model?

What we re really trying to understand first is what value is the customer paying for.

Again the only way to figure this out is being able to interact with tens or hundreds or thousands of customers so you finally understand what the right revenue streams and revenue model is.

So a plus b have to be equal to 50.

It just simply says, Hey, this isn't our customer segment.

Tonight I am pleased to announce that ENCOM's last fiscal year was our most profitable ever.

So let's look at them over the course of one year.

So notice.

Invest financial assistance, but also management assistance.

Maybe Abby made 50 and Ben earned 0.

And we can eyeball it right here.

Because when someone says earnings, are those the earnings last year?

In a future exercise we'll actually use this type of spreadsheet as an input into other models.

The reason why you are willing to pay a higher Price to

And what's left over for the equity?

So let me switch colors just to ease the monotony.

The earnings I just said, this is actually what happened to the company.

Everything on this line would be a valid combination of

So now we add an interesting line.

What you've already put together is a business model canvas with your hypothesis that says, Look, we're really passionate about this product or service, and we think there's a set of customers out there, and we've put together a revenue model, our first hypotheses and saying we're going to make a lot of money, and that's great, but there's really kind of a method to this madness, and there's not only one way to do this, but this is the way we kind of think of it.

You want to watch infinite number of movies you pay just a flat subscription fee.

We are assuming a very simple world, were the is no taxes, we have no debt, we have no intrest or things

A pivot would be a change of Gee, our pricing is going from freemium to subscription.

Abby earned 10 more than Ben.

And that's because they have the same exact asset.

Let's compare EBlT to operating profit.

And why don't you like them as much?

So the price would be 100.

It's time to monetise the thing.

And how they were going to create demand was through search ads, social media, stadium promotions.

Are you with me?

And the first one is that this whole idea about revenue stream, Steve, I get it.

And we add back the interest, at least in this example, we get to an operating profit number.

What does that tell us?

At the end of the month we count your clicks

This is Earnings Per Share, not total earnings.

It's just 10 because one, this is a nice round number.

It's the same plot.