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How do or will you make money? How much could you make?

How 30 YC companies answered the "How do or will you make money? How much could you make?" question from the YCombinator Application.

30 answers / 101 words on average
It's a combination of business model and market size questions. Focus on how big your company can be, but don't forget to tell YC partners how you will make money in the near future.

"How do or will you make money? How much could you make?" — 30 answers


Full application

We’ll make money with a SaaS subscription by charging $20-50/user/month and then charging for notebooks deployed as APIs on a usage-basis. We think we could be every DS’ daily driver tool so we could make a lot of money. For rough market sizing, we’ll assume that we can charge $25/user/month. According to LinkedIn there are 2.6M Data Engineers, 350K ML Engineers and 400K Data Scientists in the US alone, all of whom use Jupyter Notebooks everyday. For our notebooks product alone, we could make 25*12*3.35M = $1.05B/Yr. But more importantly, after we are successful in becoming the daily driver for DS, DE and MLEs, we can sell an E2E Data platform to our customers later which is a *much* larger market.


Full application

We charge a subscription fee for MagicBell's APIs and UI components. The pricing depends on a combination of the number of channels, active user count, notifications volume, and data retention period. Given the business model and deep integration into our customers’ code-base, we expect low churn and healthy expansion revenue (150-200% YoY). At an average revenue per account of $4k/mo and net revenue retention of 150%, we expect to make $30million/yr in the next five years or so, given the right growth capital. The first-mover advantage, combined with the growing market opportunity and our team's expertise in SaaS, makes this a realistic target.


Full application

We plan on making money in three phases: - 1st phase: pro account (custom badge, priority support, once a month zoom chat, etc) - 2nd phase: server side features (eg. private hosting, cloud sync, online editor) - 3rd phase: team features (small teams to enterprise) We also have a completely orthogonal revenue plan that involves creating a marketplace for notes. This involves making it easy for people to publish and monetize their knowledge - think substack/medium but for notes. This would vastly increase our addressable marketplace (to anyone that needs to consume information) but also a departure from our current plans of making revenue. This is something that we would likely explore either in conjunction of after phase 3.


Full application

It’s free to accept the first ten students. From there, we charge $25 / month for every additional cohort of ten students. There are about 5.3 million active online educators, creators, and organizations that we think could leverage this technology to create virtual classrooms. If we, specifically, target online mid-career education, our total addressable market is $6.36 billion with room to grow if we expand to enterprise or government training opportunities.


Full application

We currently charge a 30% commission to individual customers for the core service of finding and screening research participants. Going forward, new products and services (e.g., representative samples, external API) will add additional revenue streams and enable upsell. And we're currently working on a SAAS hybrid model (subscription + participant rewards) for institutions and enterprises. The market opportunity is huge. The "people research" space alone (we which we define as behavioral science + user research + market research) is a $100B+ global opportunity, but this is just the beginning as this market is nascent and growing. Fundamentally, we're developing a broad solution to a worldwide problem (learning about people).


Full application

By charging our customers. Our largest competitor, cvent, makes 260 million dollars per quarter. We believe we can hit one billion dollars in ARR in 12 years.


Full application

We'll sell Slite on a pay-per-user model, starting at 10$/user/month. The potential here is really similar to Slack's, as we intend to be the obvious choice for SMBs up to 500 people 5 years from now.


Full application

We are a subscription-based product with plans starting at $10/month. As the product grows, we will introduce higher-tier plans. We believe our product at its maturity can be priced anywhere from $50-$200 per month. There are 33 million small businesses in North America alone and at an average of $100/month per user we have a total addressable market of $40B annually.


Full application

Starting with a bottom up approach, our initial target market will be startups with 1 to 500 employees. Our immediate source of revenue will be a SaaS-based pricing model of $6/month for each employee that participates with no setup costs or annual fees. 44 million Americans have student debt, charging $6/month x 12 months would produce $3.16 billion in ARR. The total U.S. student loan market is $1.5 trillion (larger than all consumer credit cards and auto loans) and growing by $2,726 per second. Bipartisan legislation in Congress would make up to $5,250 a year in employer contributions for student loan repayment tax-free. The bill has 118 co-sponsors as of April 17, 2018.

Simple Habit(W17)

Full application

In the US alone, 18M people are meditating (reported by Forbes), and this number keeps increasing every year. Capturing [redacted] of these users is a [redacted] business at our current subscription pricing. However, we consider this just the start of what we can do. According to research by IBISWorld, the meditation and mindfulness industry ranked in nearly $1 billion in 2015. The space is growing very rapidly. More than 22% of employers currently offer mindfulness training for their workforce. However, meditation and mindfulness is just the tip of an iceberg. We believe there are a LOT of ways to monetize a large audience of people who trust our company to guide their activities around their health. We'd like to take on larger market of mental health, stress relief and health & wellness which is a trillion dollar industry.


Full application

We get a 6 to 10% commission on every loan generated by our platform. There are 11 million public servants and 30+ million retired in Brazil, which represents 90% of the payroll-deductible loan market. Let’s say we focus only in the Federal Government servants. There are around 1.1 million of them. If we get around 2k users helping them get their 5 next payroll-deductible loans (from the ˜30 they take in their life) we could be making around USD 1 million. If we help them re-take more loans we can go up to USD 5 million. We can always expand to other markets like Mexico, Colombia and Caribe, and also to the closest market which is to go to other Government branches like the regional Government, local Government, Army to reach the total of 11 million people. And, we could also go the other 30% of the market: retired people (+30 million people in Brazil). - SAM (Brazil): 11 million public servants, 30+ million retired = 41 million people. - Federal Governmt SAM (beach head): 1.1 million public servants - Initial goal: 10,000 Federal Government servants, 1 loan each = US$ 1 million revenue With recurring loans (already an offline trend), we project US$ 15 million.

The Flex Company(S16)

Full application

We’ll sell monthly subscriptions of FLEX through our own e-commerce website; subscriptions will include free shipping for subscribers. The global feminine hygiene market is over $15B and growing; the U.S. tampon market is $4B and growing. We aim to capture $3M in revenue during our first two years and see ourselves as a $100 million company in 5 years (similar to Dollar Shave Club).


Full application

Transaction fees. 1.9% + 50cents


Full application

We charge 10 cents per order. The average crowd-funded customer has 2000-3000 orders in the first month so we will make $200 – 300/month per customer. The successful companies increase to average 5000 orders/month by the end of the year, providing $500/month in revenue. There are 500 successfully crowd-funded hardware projects on KickStarter and Indiegogo since November 2013. This number excludes other product companies such as apparel, non-hardware physical goods, and food-related projects. The number of orders/customer and number of new products are expected to increase every year.


Full application

Mostly by selling subscriptions that entitle our customers to support and our proprietary GitLab Enterprise Edition. Our most sold subscription by revenue costs $49 per user per year. Most or our revenue comes from organizations with more than 100 paying users. Every company with a substantial number of developers needs software like ours. We already declined an acquisition offer from a competitor for $10M because we want to grow this into a large company.


Full application

We make money through recurring enterprise sales. There are around 80K High Schools in America that don’t offer any Computer Science courses. We estimate our average deal size will 35k (half the average cost of running Computer Science courses through conventional means). This gives us a total market size of close to $3 Billion in America alone.


Full application

Card processing costs US businesses $50 billion each year. Like card processors, we’ll charge a transaction fee. Card processors make a lot of money, but their margins are thin. They can’t reduce fees to compete. Their high fees are caused by the structure of their network. We can charge 1% where they have to charge 2-5%. Assuming our existing engagement rate, we will make $22 million a year once we reach 20,000 retailers. US has 1.1 million retailers. At our existing engagement rate, our total addressable market would be $1.2 billion a year.


Full application

Revenue stream: For low volume clients we charge on a per slide basis. For higher volume clients we have per user subscriptions. Company size: £100m revenue in five years. We are testing a price point of £5 per slide or £100 per user per month. If we look just at the management consultancy segment, there are estimated to be more than 0.5m consultants worldwide. There are many adjacencies to expand to from here.


Full application

We will make money by selling and installing our equipment on existing vehicles. Over time, more of our revenue will come from subscriptions fees. J.D. Power surveyed 17,000 drivers in 2012 and found that 20% would"probably" or "definitely" buy self‑driving technology in their next vehicle at an estimated market price of $3k. If that survey is even remotely representative of the rest of the country, those drivers who are ready to buy today will create at least a $100 billion market in the US alone.


Full application

The plan is a monthly subscription. We’ll offer customers help with experiment design. If we charge premium customers $1K per month and get 200 customers (less than 2 sales a week) over 2 years we’d make ~$2.4MM per year 2 years in. Artisan (launched this month) claims to charge $1K-$10K per month, so that’s possibly a better price. Ultimately we want to be the default way people change their apps. Everyone would use Apptimize to test each idea, and then use Apptimize to deliver the change to users. 100% of apps would use our library to reduce time to propagate changes and tighten the app development cycle. We’d help erase the line between apps and the web.

Standard Treasury(S13)

Full application

We make money on transactions. For a (very, very) rough guide, profits at ten biggest banks last year were $120b. Let's call 50% of that transactional/FICC/pure commercial banking as we define it. As for TAM, SAM, SOM, using big-O: Total addressable market: O(100s of billions) Serviceable available market through APIs: O(10s of billions) Share of market: O(10s of billions)


Full application

We charge a 7% commission on each sale. To start, Lollipuff will represent just 3 brands. Extrapolating Ebay’s completed listings for these three brands, there is more $77 Million in annual transactions ($5 Million revenue based on our commission). Ebay is undeserving of this niche. Many users refuse to use Ebay or other online sites for high-end items (ie. relying on consignment stores instead). In fact, we have several Ebay “power sellers” asking to use our services! We plan to introduce additional designers / brands as we grow. Additional revenue will be generated by affiliates (eg. for brands not currently represented.)

One Month(S13)

Full application

In less than 5 months of existence, One Month Rails has made over $80,000 in revenue by selling our product across platforms like Skillshare, Udemy, and General Assembly. For-profit trade institutions like University of Phoenix (which is shifting its focus online) have been able to generate hundreds of millions of dollars in revenue per year from their programming departments alone. Now consider this: 16% of sites on the web are built on Wordpress, a blog publishing platform people use because it's probably the easiest way to get a good looking site live relatively quickly. Yet even something as simple as getting your own Wordpress site up is way too complicated for most people. People who use One Month Rails are able to have their own application live on Heroku in less than half an hour. If One Month Rails can provide people a better and more flexible alternative for helping individuals deploy their web applications, the potential impact reaches far beyond just education. Imagine a world in which everyone has the understanding and tools necessary to build not just a content site but an entire web application. As One Month Rails evolves to better serve the needs of non-technical people building web applications by including web app hosting, plugins, and other services, the potential market grows well into the billions of dollars per year (if cloud solutions like Salesforce or Windows Azure are any indication).

The Muse(W12)

Full application

We have a clear step-­by-­step sense of how we could make $40M/year and market data that suggests a much larger opportunity if we can figure out how to monetize it. Currently, we're interested in: Recruiting: - Email newsletters targeted by industry containing a mixture of content, paid job postings and sponsorships; - A dynamic job board organized by industry and location, with additional predictive abilities telling candidates who possess certain skills or are looking in certain niche areas to consider [ X ] job in an unrelated field which fits a similar profile; - A large resume database which recruiters and hiring managers can access and search for a fee, again with predictive and skills-­based abilities to suggest that a certain professional in finance might be a very good fit for a lead dev role at a burgeoning start­up (To go bottom up, we believe email newsletters can get a $250 CPM for targeted job listings and a $2500 finders' fee for successful hires; job boards for our demographic can charge roughly $350/post, and resume database access runs roughly $1000 per recruiter per month ­ more if predictive functions are added. Top down, there are 7.5M women in our demographic changing jobs every year. If the top 10% are worth $20,000 each time that happens, the overall addressable market for recruiting alone is $15B.) Training & Professional Development: - Direct to customer or business / white labeled training program (a natural extension of our core content which we've already been approached about by several companies) (To go bottom up, we believe individuals will pay $15 per course or, as LearnVest & Lynda have demonstrated, $120-­$250 for a year of access to courses. Businesses, on the other hand, spend over $55B every year on training and development in the US alone, and this market has a 9.8% CAGR). Advertising & Branded Content: -Examples here include content branded by Dove's self esteem campaign; sponsorship of our "Finance" vertical by CitiCards, or an AmEx and Dell sponsored Women's Symposium

Make School(W12)

Full application

We will make money by taking a portion of the revenue from the games we publish. Every addition to our game catalog is created at no incremental cost to us. We use live metrics and machine learning algorithms to estimate the lifetime expected value of each game and adjust our promotional spending and crosspromotions accordingly. Additionally, app sales are top heavy, so by not being selective and simply providing tools to facilitate high quality app development, we will sooner or later have a blockbuster on our hands. In our first two years we are targeting 450k in revenue with a 30% revenue share on 300 apps that average $5000 in sales each. From there as we continue to grow our catalog the average sales of each app will increase as well.


Full application

We will use a freemium model and make money by charging coaches/organizers $10/mo or $60/yr for premium team sites, charging players/parents $10/mo or $60/yr for premium features/storage on profiles, and charging recruiters $100 for unlimited queries to our database. We can make about $2.3B/yr ($300MM/yr from team sites, $2B/yr for player profiles, and $2MM from recruiters).


Full application

Taazr will charge clients monthly. We see a market opportunity in the tens of millions.


Full application

We are already making money. Our current product grosses several thousand dollars per month in revenue. Our most immediate source of revenue is direct from newspapers. Each newspaper pays us between several hundred and several thousand dollars for services. In the future, we will also present products directly to small businesses through newspaper ad reps in a tiered pricing scheme. For example, the local directory product that we are currently developing will sell directly to businesses for between $20 and $200 per month and we get a cut. The customers who are buying these services are accustomed to paying $40 just to place business-card sized ads in the paper once a week, so if they are interested in marketing via the internet, this purchase should be a no-brainer. Really though, it doesn't matter what we charge: $n 6,000,000 small-business is a number we can live with.


Full application

Mixpanel’s business model is a subscription based freemium model. Based on the data logged and analyzed we can scale prices based solely on usage similar to that of Amazon S3. Our idea is to target small under-served startups before they build out an internal system. During that period, we aim to help, consult, build case studies, and provide a free trial to augment our brand and reputation before targeting larger potential clients.


Full application

The current plan is a freemium approach, where we give away free 1GB accounts and charge for additional storage (maybe ~$5/mo or less for 10GB for individuals and team plans that start at maybe $20/mo.). It's hard to get consumers to pay for things, but fortunately small/medium businesses already pay for solutions that are subsets of what Dropbox does and are harder to use. There will be tiered pricing for business accounts (upper tiers will retain more older versions of documents, have branded extranets for secure file sharing with clients/partners, etc., and an 'enterprise' plan that features, well, a really high price.) I've already been approached by potential partners/customers asking for a web services API to programmatically create Dropboxes (e.g. to handle file sharing for, a web site for managing global dev teams). There's a natural synergy between project mgmt/groupware web apps (which do to-do lists, calendaring, etc. well but not files) and Dropbox for file sharing. I've also had requests for an enterprise version that would sit on a company's network (as opposed to my S3 store) for which I could probably charge a lot.

"How do or will you make money? How much could you make?" — advice from YC partners

Zain Shah (Data Scientist at Opendoor, YC alum)


You could potentially make a ton of money, but be reasonable in making your estimates. Make bottom-up estimates, not top-down ones (e.g. don’t say “if we capture 10% of this 100 billion dollar market, we’ll be making 10 billion dollars!” because those estimates are often wildly inaccurate and don’t represent thoughtful estimation) We will charge customers the ordinary cost of a repair plus a 15% convenience fee. Ralph’s currently operates over 50 repair shops in each state for a grand total of 290 stores. Each one operates on only 10 customers per day, because others call in and are turned off by the 2 week wait time.When new repairmen were hired last year, the average cost of a repair went up 50%, but the volume of repairs also went up 100%, tripling revenue. Operating profits went from $1.2 billion/year to $3 billion/year. From this, based on the volume of repairs in San Francisco alone being over 150 per day, and the average cost being about $400, we could be operating at about $70k per day in just SF.

Sam Altman (CEO at OpenAI, Former president of YCombinator)

The best answer is something like “we have a path to be doing enough revenue to cover our expenses in a year, but if things really work, here is how we could make $1B a year in 10 years.”

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