When software becomes commoditized, traditional subscription models fail. These six business models represent the viable paths for companies operating at the commoditization floor—where software is free, disposable, and undifferentiated.
Software cannot be the primary value capture mechanism. Value must flow from adjacent layers.
All floor business models share a common structural insight: when production costs approach zero and differentiation compresses, attempting to monetize the software directly is fighting economic gravity.
Model 1: Freemium at Massive Scale
The Loss Leader Business Model
The product itself becomes a loss leader. The software exists to aggregate users, capture data, and create distribution—not to generate direct revenue. Monetization shifts to adjacent services where willingness-to-pay remains intact.
You give away a fully functional projectmanagement tool. You monetize when teams connect payments, want integrated payroll, purchase templates from a marketplace, or enterprises want your aggregated benchmarking data.
Examples: Canva, Figma, Notion
Model 2: Usage-Based Micro-Pricing
The Utility Business Model
When differentiation collapses, granularity becomes the lever. Instead of bundled feature tiers, you charge for exactly what’s consumed: per API call, per compute second, per record processed, per action taken.
The Math That Matters: 10,000,000,000 calls × $0.001 = $10,000,000/mo
Release the core product as open source. Monetize through hosting, support, enterprise add-ons, and professional services. The software has no moat, so you compete on operational excellence instead.
Charge for outcomes within compressed windows. Not “subscribe to our projectmanagement tool” but “pay $20 to launch this campaign workflow.” Disposable software for disposable needs.
Transform your software into a financial services distributionchannel. Every workflow that touches money—invoicing, payments, payroll, lending, insurance—becomes a revenueopportunity. Financial services have regulated moats that can’t be vibe-coded away.
Stacked together: 3-15% of every dollar flowing through your software.
Your software becomes the platform upon which others transact. You capture value not through direct monetization but through taxation of economic activity you facilitate.
Don’t build the product. Become the exchange where products trade. Tax every transaction. Network effects can’t be vibe-coded.
Examples: Gumroad, Envato, Substack, Etsy, App Store
The Floor Business Model Synthesis
The question isn’t “what features should we build?”
It’s “what economic activities can we position ourselves to capture?”
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
