Skin in the Game

Chapter Preview Of The Soon-To-Be Published 30-Day Startup Manual

Author

Sanju G Prakash
August 25, 2025

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Here is a preview of our upcoming book. We will deliver chapter previews and more every Monday. Stay tuned.

Day 6

Skin in the Game

Your business model is only as good as the reaction it gets. Today, you’re going to launch a small but deliberate test—something that gets people to commit with money, time, or energy. Feedback is no longer enough. You’re looking for proof.

Most business model advice ignores the constraint side. We won’t. Many founders assume their preferred business model will work because it worked for someone else. For example, Netflix has subscription revenue, so subscription must be right for your startup. Amazon built a marketplace, so the marketplace must be a scalable choice.

Step 1: Capital Requirement Reality Check

Each model has different cash flow patterns and infrastructure needs:

Capital Intensity

Business Model

Characteristics

Low Capital (0–6 months)

Service-Based

Can start immediately, quick revenue, but time-intensive

 

One-Time Purchase

Simple setup, immediate customer payments

Medium Capital (6–18 months)

Subscription

Needs consistent value delivery before reaching break-even

 

Freemium

Requires user scale before meaningful revenue appears

High Capital (18+ months)

Marketplace

Must build both sides of the market; high upfront customer acquisition cost

 

Usage-Based

Needs strong infrastructure before earning revenue

Elimination Question: How many months can you survive without revenue?

0-3 months: Service-based only. Everything else takes too long.
3-9 months: Service-based, one-time purchase, or simple subscription.
9+ months: Any model, but prioritize fastest to revenue.

Elimination rule: If you can't afford to execute a model, it doesn't matter how perfect it is theoretically.

Preview Note: This is just the opening of chapter 6. The full chapter helps you filter, test, and validate demand of your product in the market.

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